open_in_newOriginal article
AI’s real revolution is just beginning

AI’s real revolution is just beginning

  • 23.03.2025 20:46
  • theglobeandmail.com
  • Keywords: AI

The AI revolution is compared to the dot-com boom, highlighting how open systems disrupt infrastructure. While companies like Nvidia are secure, others face risks as AI commoditizes traditional tech. The shift from infrastructure to applications mirrors internet growth, creating new opportunities but also potential casualties as the AI era democratizes innovation and reduces costs.

Nvidia ServicesAmazon ServicesNVDAsentiment_satisfied

Estimated market influence

Nvidia

Nvidia

Positivesentiment_satisfied
Analyst rating: Strong buy

Nvidia is not facing extinction and has a strong position with proprietary technologies.

DeepSeek

Negativesentiment_dissatisfied
Analyst rating: N/A

Mentioned as an example of potential bubble or overreaction, but no specific negative impact given.

Context

Analysis: AI’s Real Revolution is Just Beginning

Key Lessons from the Dot-Com Era

  • Global Crossing: Once valued at $47 billion, it filed for bankruptcy in 2002 due to overinvestment before revenue materialized.
  • Cisco Systems: Market cap fell from $500+ billion to ~$100 billion as open networking standards commoditized its gear.
  • Sun Microsystems: Sunk from $200 billion to under $10 billion as cheaper hardware and free software (e.g., Linux, Apache) undercut its business.

The Current AI Landscape

  • AI Infrastructure Providers: Companies like Nvidia are thriving due to proprietary technologies with few commoditized alternatives.
  • Open Systems: Open-source AI tools (e.g., DeepSeek) are disrupting infrastructure by offering free, high-quality alternatives.
  • Cost of Intelligence: Declining rapidly, enabling startups to enter AI with minimal capital and fueling innovation.

Competitive Dynamics

  • Nvidia vs. Others: Unlike companies directly competing against open systems, Nvidia’s proprietary portfolio makes it resilient.
  • DeepSeek: Represents the inevitable evolution of free, open alternatives that commoditize infrastructure.

Market Opportunities

  • AI Infrastructure: Significant investment is flowing into enabling technologies like AWS for AI, with Nvidia benefiting from soaring demand.
  • Application Layer: The most valuable companies are in AI applications or full-stack models (e.g., Netflix, Google).
  • ** Democratized Innovation**: Startups are growing at unprecedented rates, leading to a explosion of new businesses.

Long-Term Effects and Market Shifts

  • AI’s Economic Impact: Similar to the internet, the cost decline is driving demand and value creation.
  • Autonomous Operations: AI extends beyond software into machines (e.g., autonomous cars, robots), transforming industries like manufacturing and energy.
  • Economic Value Shift: From infrastructure to applications, with parallels to the internet era’s shift in economic focus.

Strategic Considerations

  • Investment Focus: Opportunities lie in both early-stage ventures and established AI-native companies.
  • Timing of Disruption: While slower than expected initially, AI’s transformation will accelerate due to existing core technologies.

Conclusion

The AI revolution is just beginning, with massive opportunities for innovation and growth. However, it also poses risks for those unable to adapt to the shifting landscape. The next decade will likely see new tech giants emerge alongside inevitable casualties.