AI could be the end of the digital wave, not the next big thing

4 hours ago

AI may represent the final stage of the digital surge that began in the 1970s, not a new technology wave, according to 'late cycle investment theory' inspired by Carlota Perez's model.
The Perez model describes technology surges as following an S-curve: an initial 'installation' phase builds infrastructure, followed by a 'deployment' phase with accelerated growth after a financial crash, before market limits lead to normal returns.
Indicators of being in a late cycle include the 2022 startup funding collapse possibly being structural, AI breakthroughs driven by big tech capital rather than startups, and platform saturation in most digital sectors.
AI is seen as optimizing the existing computing and networks paradigm, similar to how lean production refined mass production, extending its reach to previously resistant sectors like healthcare and education.
Late deployment technologies like AI may face social pushback (e.g., data center opposition, dislike of AI-integrated tools) and yield normal investment returns, not increasing returns, as seen in business model struggles.
The U.S. AI model is fueled by a transhumanist ideology and heavy investment, while China focuses on practical economic applications, lean architectures, and partnerships, which may be more suited if AI is a late-stage technology.

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