Edward Quince's Wisdom Bites: Tools

 

Every technological revolution begins with scarcity and ends with abundance.

AI is no different.

The revelation that models could be trained more efficiently challenged the idea of an eternal “compute tax.” That’s not bearish innovation—it’s how innovation works.

The Model: Capital Cycles Eat Excess Returns

• High margins attract capital
  
  

• Capital creates supply
  
  

• Supply compresses margins
  
  

Hardware is particularly vulnerable because efficiency is deflationary.

Portfolio Orientation

Differentiate toolmakers from tool users. History favors those who apply technology, not those who sell picks at peak mania prices.

XTOD

“Those who invent rarely capture the economics.”