When investing in emerging technologies like artificial intelligence (AI), historical patterns suggest that the real wealth is often captured not by the pioneering builders but by the companies that effectively leverage that technology. Eric Fry, a macro investing expert, highlights this trend, noting that while big tech companies such as Amazon, Alphabet, Microsoft, and Meta are investing billions to build AI infrastructure, smaller “AI Appliers” may stand to gain the most by utilizing it to boost efficiency and cut costs.
A notable example of these AI Appliers is PayPal Holdings Inc. (PYPL), which has integrated AI into its operations, resulting in over a 50% increase in revenue per employee since 2022. Fry argues that as autonomous AI technology continues to evolve, these Appliers will likely dominate the market, echoing historical cycles where those who use technology outpace those who create it.
Investors are cautioned to focus on these Appliers rather than solely the builders, as the latter may face challenges similar to past technological booms, where many early pioneers ultimately failed.
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