BigTech’s $5 Trillion Valuation Shows the Beginning of AI-Capitalism
Apple is approaching the market valuation of the entire Australian Stock Market. It’s time to sound the alarm bells on free-market capitalism which is resulting in a few monopolies taking all the power.
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If this keeps up, Capitalism as we know it will be severely distorted in the 2020s by the so called “FANG” stocks. The GAFMA giants are rising on the back of technology where Cloud, Ad, mobile and AI companies are driving the majority of growth.
American BigTech is worth over $5 Trillion, centralized in just five companies — the same companies that show deficits in ethics in the leadership of the Western internet. How is that health market capitalism in technology?
- Microsoft is getting more into AI and diversification of its business model
- Google is getting more into the Cloud & healthcare
- Amazon is getting more into advertising (among other things)
- Facebook, in spite of harming society, the media and democracy, is highly profitable.
These AI-Ad-Cloud companies are morphing into companies that others can no longer compete with. China is building firms with the same capability, with Alibaba getting in the Cloud, ByteDance getting into advertising and Baidu getting into AI.
By 2030 how powerful will these global tech monopolies be? How will they siphon their power in artificial intelligence to grow even bigger?
This version of capitalism is one where the big fish keep getting bigger. The five most valuable U.S. tech companies now account for over 17% of the S&P 500, up from 11% in 2015. As these companies continue to reach $2 Trillion each, more wealth inequality will occur in society!
Even in the face of heightened regulatory pressure, the dominant companies continue to grow and attract investor dollars. The U.S. cannot afford to regulate its own tech companies due to a cold tech war with China. This means American capitalism is locked into a paradox, a dangerous catch 22 that the executives at these companies are doing everything to distract us from. Microsoft claims it wants to be carbon negative by 2030.
The GAFMA companies are worth a staggering $5.2 trillion in January, 2020. How much will they be worth in 2025?
China’s own technological dynasty is taking shape. Alibaba, Huawei, ByteDance, Tencent and Baidu are more formidable than they appear. As they get more sophisticated in the Cloud, their AI prowess will increase.
For every Starbucks there is a Luckin, for every Tesla there is a NIO, for every AWS an Alibaba Cloud will rise.
In this manner, Technology and AI companies will create such a pyramid of wealth inequality in society, their “good deeds” will just be PR moves. Amazon can create jobs and it will show its capability of destroying jobs.
Business as usual does not always lead to a benevolent society. AI and technology regulation and ethics are beyond the products and tactics the GAFMA companies are using. Capitalism is not transparent, as surveillance capitalism trends are taking over.
Whether at home or in the workplace, the same companies are surrounding us like never before, capturing our attention and increasing amounts of spending from businesses, consumers and advertisers. Young graduates no longer want to work at these companies that exploit to get ahead. Capitalism is becoming more distorted and it’s only going to get worse as these ten companies I mentioned continue to evolve and take market share from all other competitors.
What happens when Cloud-Ad-AI companies become too big? There’s no mechanism to prevent it.
The AI Firms that Can End Capitalism As We Know It
- Apple $1.4 Trillion
- Microsoft $1.3 Trillion
- Google $1 Trillion
Politics and geopolitical events are temporary, but these firms could last for decades! Gaining more power and diversifying unbeatable revenue streams in advertising, the Cloud, consumer products, wearables, E-commerce and chat, among others.
The Chinese state will boost its most powerful companies to become even stronger global players, as America will let California decide its fate. What could possibly go wrong? This is not an idealistic world. In the U.S. money always wins.
Promises of a Better World – BigTech Has Free Reign
With all that momentum, investors are mostly shrugging off news of probes by the Department of Justice, Federal Trade Commission and state law enforcement into the potential anti-competitive practices of Big Tech as well as declarations by presidential candidates like Warren or Sanders that the companies should be split apart. How does the U.S. compete with a rising China? By not hurting its own Titans.
The U.S. is dependent upon monopoly capitalism. The Cloud and AI are such nascent fields that these few companies will piggyback quickly to $3 Trillion market valuations in the decade ahead. What kind of reality will that be for consumers and citizens? A reality where corporations have more power than the state, where they become the state, banks and healthcare data holders. What kind of a world will technological capitalism become for our children with even higher student loans and costs of living?
No, Capitalism won’t become more equal or fair. AI based companies will win, and they’ll win so big there won’t be much room for the little guys, the startups, for real innovation to take place. The American bottle-neck on innovation won’t just be a skills gap, it will be a monopoly bottleneck. This is ironically what enables China to out-compete the West in the 2020s.
Google’s Cultural Decline is Typical of Financial Success
Google has continued to thrive despite billions of dollars in past fines from the European Union, while privacy-related regulations like Europe’s General Data Protection Regulation have generally worked in Google’s favor and hurt smaller businesses that have fewer ways to adapt and gather data.
Google is now a 1 $Trillion dollar company too, without any regulation as to the ethics involved in how it leverages AI and its considerable machine intelligence engineering talent.
Google’s internal turmoil won’t save it. It won’t suddenly wake up and become a “good guy” again. Neither will Mark Zuckerberg as he witnesses threats to his own empire. Has becoming the most wealthy citizen made Jeff Bezos a better human being? Is Elon Musk evolving as an ethical human being? Silicon Valley titans aren’t all as self-effacing as Satya Nadella.
The top companies are growing so much faster and this points to the acceleration of wealth inequality we at the Last Futurist often write about. Think about it, Apple, the most valuable U.S. company, has been the top performer in the group, jumping 103%, with Microsoft and Facebook each up over 50%.
The 2020s Are About the Cloud and AI Growing Up
The 2020s will be about power, the power of artificial intelligence. These companies will be talking about all the “good it will do”. As they squeeze the top of the pyramid of capitalism, enabling the rich to get richer faster.
The 2020s is the decade where AI merges with the Cloud. In this decade Alibaba and Google will catch up with AWS and Azure.
Ads still account for almost all of Alphabet’s revenue, but the company is investing heavily in cloud infrastructure, where it’s generating over $8 billion in annualized revenue and is third to Amazon and Microsoft. In the 2020s, ByteDance and Amazon also catch up considerably to Google and Facebook in Ads.
The AI-Ad-Cloud (AAC) monopolies are coming. They are not backing down, and the future of society will feel the impact of this trend as pyramid capitalism continues to evolve and a rising China utilizes its superior investment in AI to dominate the decades to come.
When five companies are worth $5 Trillion, we are getting past the point of no return. Read us at the Last Futurist for more content like this and subscribe at the top right.