Analysts are questioning whether the massive capital influx into artificial intelligence marks the beginning of a new technological era or the final stage of the digital revolution that began in the 1970s.
Writing for The Next Wave, technology analyst Perez suggests that the current surge in AI development could be the closing chapter of the Information and Communications Technology (ICT) era.
This perspective aligns with 'late-cycle investment theory,' a concept explored by strategy blogger Nicolas Colin. The theory posits that technological surges follow an S-curve, moving from infrastructure installation to a period of deployment before hitting market limits.
The limits of the digital surge
According to the Perez model, the first half of a technological surge involves building out infrastructure, often below the radar. The second half involves 'deployment' companies that drive accelerated growth through established business models.
Colin argues that current market indicators suggest the computing and networks revolution has entered its maturity phase. He points to the 2022 startup funding collapse as a potential structural shift rather than a simple market correction.
Data shows that the most significant AI breakthroughs are no longer coming from garage startups. Instead, giants like OpenAI, backed by Microsoft, alongside Google, Meta, and Amazon, are deploying massive capital to solve well-understood problems.
This pattern of large-scale deployment by incumbents is a hallmark of a late-cycle phase. As the digital transformation reaches sectors like healthcare, education, and government services, the technology may be reaching its natural limits.
As these platforms reach saturation, investors often begin looking for the next technological surge to replace the maturing system.
