I made this comment half a year ago as well, but i believe AI is going to bring down the profitability of the big tech companies by a lot. Instead of massive scaling advantages which has given software its extreme valuation, it now hit on something that is almost a perfect commodity. Energy and depreciation are easy to calculate and its subject to global competition. Great for consumers, less so for people looking fo…
It used to be hard to be "web scale" and available, now that's either k8s or a few checkboxes in AWS.
Yahoo used to be able to "coast" on the compellingness of their services because 80% attractive with 100% available and 100% global reach crushes 90% attractive with 95% available and 25% global reach.
I was often confused by the hyperfocus of analysts asking "Is Y! a tech company or a content company?"
What they were really asking was if we should be valuing Yahoo! as 30%+ margin on putting ads next to Yahoo! News articles, or 10x multiplier on originating GMail/Search?
I think "data is the only moat", and in a way that goes back to the "first to market / eBay" POV, and the difference between first to market and fast follower is super interesting!