Nicolas Colin, a strategy and innovation blogger, has proposed the "late-cycle investment theory" which suggests that the current surge in AI technologies may be the final stage of the digital surge that started in the 1970s. He argues that this is similar to Carlota Perez's model, which describes technology and finance interactions as creating new long surges of investment that run for 50-60 years.
Colin points out three indicators from the tech sector that support this observation: the startup funding collapse of 2022 may be structural, AI breakthroughs often come from well-funded incumbents rather than startups, and platform saturation is now complete. He also notes that AI optimizes existing paradigms rather than creating a new one.
Colin's theory suggests that a new technology surge would involve significant investment in new infrastructure, visible innovation milestones, and the ability to reach previously untouchable sectors. However, he argues that AI may be a late-stage technology, with returns on investment being normal rather than increasing. This has implications for the current "business model war" between China and the US, with Colin suggesting that the Chinese model of AI is more aligned with this late-stage theory.
