A Technology Transition Is Like Playing Musical Chairs With Your Wealth

I think of it as playing musical chairs with your wealth. As the music changes, capital moves towards new businesses, new industries and new explanations of how the future will work. Some of those moves are justified. Some are driven by excitement. Often, it is difficult to tell the difference while the music is playing.

That is why a technology transition deserves both curiosity and discipline.

The AI Transition Is Underway

On November 30, 2022, OpenAI launched ChatGPT. What followed was an unusually rapid wave of experimentation and adoption. People who had never used an AI tool before were suddenly trying it at home and at work.

The pace matters because markets do not wait for every uncertainty to be resolved. When a technology appears capable of changing how businesses operate, capital begins moving before the long-term winners and losers are clear.

There is an old saying that, during a gold rush, it is often better to sell the shovels than to search for gold. In the current AI transition, NVIDIA has become one of the clearest examples of a company supplying the infrastructure.

The investment case is easy to understand. If more businesses and consumers use AI, they will need more computing power. More computing requires advanced chips, and NVIDIA has established a strong position in the market for the high-end chips used to power AI workloads.

But this isn't a one-stock story. South Korea's Kospi is up roughly 77% in 2026, with Samsung Electronics and SK Hynix both crossing $1 trillion in market value as AI-driven demand for memory chips took off. Taiwan's entire stock market, lifted by TSMC, has grown large enough to overtake India's and the UK's in total value. The AI theme is moving whole markets, not just one company.

Portfolios have gone global along with it. Indian investors today have three real routes into US and global markets — international mutual funds, GIFT City funds, or direct US broking — and increasingly, people are using all three at once.

That logic may well be correct. AI may continue to spread, demand for computing may continue to rise, and the companies supplying it may continue to benefit.

But an investment is never only a story about what may happen. It is also a price paid today for that possibility.

When The Music Stops

We have seen versions of this before. During the dot-com boom, Cisco supplied routers and networking equipment that were critical to the rapidly expanding internet.

The internet was real.

Cisco was a real business. Its earnings continued to grow for years after the dot-com peak. Yet investors who bought the shares at the height of the enthusiasm had to wait many years to recover their investment.

When Success Doesn't Translate Into Returns

There is a lot of excitement among AI investors today. The logic is clear: in the last major cycle, when the internet transformed the economy, the companies that emerged as its biggest winners — Google, Meta, Amazon among them — went on to become some of the best investments of a generation. But markets are never so straightforward. There are numerous possible outcomes.

Markets reveal their nature more clearly over longer periods. So let's look at a technology that enabled humans to fly — and at what it actually did for its investors.

Commercial aviation is a useful example. Few technologies have transformed the world as profoundly as the aeroplane. It made long-distance travel dramatically faster and created an enormous global industry. Yet airlines have historically been difficult businesses for investors.

Warren Buffett made this point several times, including in his 2007 letter to Berkshire Hathaway shareholders. He wrote that a far-sighted capitalist at Kitty Hawk — the small North Carolina town where Orville and Wilbur Wright made the first successful powered flight in 1903 — would have done his successors a huge favour by shooting Orville down.

Airlines changed the world forever, but their investors didn't make money.

Global AI Transition: Numerous Possibilities

The technology is real. AI is likely to change how businesses operate, how people work and how entire industries are structured. There will be genuine winners, and there will be businesses that are disrupted.

The question for an investor is not simply, “will AI grow?” It is also:

• How much growth is already reflected in today's price?
• Do these companies have a moat?
• What happens if the technology spreads quickly, but competition makes the economics less attractive?

So I think it's possible to be right about the technology and wrong about the investment.

At Accrue, we're quite obsessed with data and analysis. We track a lot: how technology influences markets, how markets influence economics, and how both influence wealth.

I Don't Know When The Music Will Stop. Neither Does Anyone Else.