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Roula Khalaf, the editor of FT, selects his favorite story in this week’s newsletter.
The most influential person in today’s high -tech is the dead economist, William Stanley Javens. The paradox, which was named, became a Silicon Valley Mome because the company had stock prices.
Jevons mostly remember that the arrival of steam engines may not use the world less coal, but may be opposed. It is a convenient story for Silicon Valley boss after the Chinese artificial intelligence company Deepseek has found a way to train a cheaper and easier AI model than his own model.
As a result, the new Jebonsianism is suddenly popular. Microsoft’s Satya Nadella, NVIDIA founder Jensen Huang, and ASML’s chief christophe fouquet seem to relax about DeepSeek. The bad thing is good, they claim: cheaper AI means more demand for AI.
They are correct, in the direction. Think of chips and data centers as today’s coal. If the AI application becomes cheaper, the customer needs to expand them further by reducing computing power. As the coal did, the demand for calculations can rise. This example in the real world: air conditioner.
But even if AI proves Jevonsian’s profits, not everyone can benefit equally. The impact on major high -tech companies depends on whether they are AI, manufacturer, broker, or inconvenor taker in each case.
Taker must be a winner regardless of whether Jevons is related. Consider software companies such as Salesforce, ServiceNow, and Adobe, which can be used as a building block and can be obtained at low cost.
For AI manufacturers, roughness exceeds smooth. Meta Platform and Openai have spent billions of dollars on power, data, human efforts, and microchips to generate models such as LLAMA and O1. They may find that they have received over -investment compared to their future returns.
The broker is in a more happy place. For example, Alphabet, Microsoft, and Amazon all rent computing power. The Leaner AI model means that customers do not need it, but this is a really timing problem because we ultimately want more. However, they give pain to chip makers, such as NVIDIA, whose stocks have decreased by 13 % since Friday.
As time goes on, the lines are blurred. Microsoft is a broker. He reported a quarterly cloud revenue on Wednesday, but is also an investor of Openai, a manufacturer. Both meta are made and take. AllPhabet, the owner of Google, is all three. Use cloud computing, building AI models, and improving search and advertising sales.
In any case, financial interests may already be retrofitted. Companies that focus on artificial general information -consistent with humans are likely to break, regardless of. Mark Zuckerberg, a meta boss, said on Wednesday that he had invested a hundreds of millions in AI infrastructure.
Jevons is the taste of the moment, but he has borrowed a limited help in 2025. In addition, it was not possible to foresee the pace of changing expectations in the market. His 1866’s “coal problem” predicts that the UK coal demand will be doubled every 20 years. Silicon Valley and their investors will not wait so long.
john.foley@ft.com
