AI is already changing our world. But that doesn’t mean the companies building it will make you money. I’ve been thinking a lot about how big tech’s spending on AI is changing their business models, and what the implications could be. The Mag 7 were wonderful businessesMany of the businesses in the Magnificent 7 have been historically wonderful businesses. They’ve steadily grown revenue at very attractive rates:
They’ve grown their profits just as fast.
Nearly all of that profit has historically been turned into cash.
They’ve been capital light businesses.
That management has been able to reinvest in at high rates of return. |