Gilder’s Guideposts Newsletters
Cost Cuts No Longer Drive Returns for Infrastructure Providers
A recent Wall Street Journal article highlighted a familiar pattern: companies announce layoffs and their stocks often move higher. The conclusion is straightforward—cut costs, improve margins, and investors reward discipline. That conclusion is increasingly wrong, especially for companies in the business of providing the infrastructure of artificial intelligence. Here’s the reason. In prior cycles, layoffs […]
AI Wants a New Theory of the Firm
In 1937, economist Ronald Coase asked a great question: why do firms exist? His answer—for which he won a Nobel Prize 54 years later—was that coordinating efforts is expensive. Markets require constant negotiation—finding suppliers, agreeing on terms, and enforcing contracts. Firms arise when it becomes cheaper to organize activity internally than to rely on the […]
The AI Productivity Boom Hiding in Plain Sight
I keep hearing that artificial intelligence (AI) is not delivering on promises of booming productivity. Economists look at national statistics and see only modest gains. Skeptics conclude that AI is overhyped—another technology long on promise and short on measurable gains. I heard the same thing back in the early 1990s when a plethora of distinguished […]
The Companies Getting Smarter on Your Dime
Buy the Companies That Own the Problems The biggest winners in AI and advanced manufacturing are not just building better products. They are learning faster than everyone else—and, more importantly, learning from work their customers do for them. For most of the industrial era, competitive advantage lived inside the company. The company owned the factory, […]
The CPU Is Dead. Long Live the CPU
The more graphics processing units (GPUs) Nvidia (NASDAQ: NVDA) sells, the more central processing units (CPUs) the datacenter needs. That was not the original storyline. Starting circa 2024, with the AI boom, the story was that GPUs won, CPUs lost. Parallel math beat general-purpose compute, and the old king of the datacenter, CPUs made mostly by […]
The System Xi Cannot Afford to Break
Everybody knows Communist countries can’t get rich. So, we tend to tell ourselves a story about how China got rich, a story people may find comforting at first but over time becomes enraging. The story is that China got rich by stealing. It sounds right. It preserves our assumptions. If Communist China is succeeding, it must […]
What Becomes Scarce When Intelligence Abounds?
I have been working with and learning from George Gilder for more than 40 years, and I still remember the first thing he taught me about economics. It was “wires and switches.” In “Microcosm,” which I edited, he described the economics of the old Bell System. Almost since the invention of the telephone, the most expensive […]
Let’s Get Vertical
Have you noticed that vertical integration is making a comeback? Suddenly, nearly every leading technology company is vertically integrated. Nvidia (NASDAQ: NVDA), the world’s most valuable company, is still often described as a chip maker because its GPUs (graphical processing units) are the all-but-indispensable tools for artificial intelligence. As we have noted in this space before, […]
Wolfspeed: From Bankrupt to Innovator?
Artificial intelligence (AI) is transforming yet another semiconductor sector investors rarely discuss: advanced semiconductor packaging. As AI models grow larger and demand greater memory bandwidth, the packaging technologies that connect processors and memory are becoming a critical component. Modern AI processors depend on stacks of high-bandwidth memory (HBM) placed directly beside the GPU (graphics processing […]
Israel’s Missile Technology Supply Chain Is a Global Innovation Hub
Israel has developed one of the world’s most advanced missile technology industries for both missile defense and precision strikes. A nation under attack for almost 80 years has yielded an ecosystem in which missile systems are designed, tested, and refined under real operational conditions. Supplying Israel’s needs is a highly concentrated and technologically sophisticated supply […]