Comment by sailingparrot | Hacker News Reader

Comment by sailingparrot | Hacker News Reader

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The three companies you have listed have radically different businesses. They just happen to all be in what we call "tech".

Alphabet revenue are 98% based on ads. How do you see the future of ads in the current landscape? If you are bullish then invest away. If not, then does Alphabet has a viable alternative they are investing in for the long term?

Microsoft revenue is a mix of a ton of different things, the biggest of which are cloud, productivity (Office and such), and direct consumer products (Xbox, Windows etc). They are basically selling shovels in the tech-age gold rush. They have just so many different billion dollar revenue streams that they could lose any one of their 3 big businesses and still be ok. But by far their biggest growth driver is Azure for now, how do you feel about that versus the competition?

Apple is all about consumer hardware, as long as they continue delivering best in class product they will be making tons of cash. They are also looking to enter the electric car industry one way or the other, which is potentially a gold mine, do you think they can succeed?

I am not very bullish about the future of ads but I don't see Google being limited to ads. Search is not valuable enough for users at the moment to pay for it. But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it.

Apart from that, they build phones, run datacenters, develop self driving cars, business software ...

As for Azure, I think Googles cloud business is in the same order of magnitude. I don't see one of them having a long term competitive advantage here.

As for Apple, I think consumer demand in tech will grow just like business demand in tech will grow. And I don't see anyone disrupting Apple either. They will just continue to iterate and grow.

IF some new development appears on the horizon, then it will be interesting how the 3 CEOs will position themselfes. But at the moment, I don't see anything that will disrupt any of these companies.

The parent mentioned not what alphabet does, but where it gets (most) of its revenue from. Google is making phones, but not really making a lot of money from them. So the question is, what is the future of alphabet?

> Apart from that, they build phones, run datacenters, develop self driving cars, business software ...

But none of those have significant impact on their revenues. If ads business tanks for a reason or another (new legislation around privacy, or remake of 2020 Covid-related ad bust), then they tank as well. Cloud revenue is probably one of their biggest non-ad revenue stream, but it's less than ~5% of total revenue.

And Waymo, DeepMind etc, are all moonshots, they currently make 0$, but that's also where the disruption potential could come from. So if you believe in them, that could be a good reason to invest.

> As for Azure, I think Googles cloud business is in the same order of magnitude.

Azure is ~4x bigger than GCP.

> If ads business tanks

Sure. If disruption appears on the horizon in one of the sectors these tech companies are in, then it will get interesting how the CEOs position themselves.

But at the moment I don't see that in any of the sectors. So I don't have an hypothesis to rank Goole/Apple/Microsoft. All three hum away in a similar fashion at the moment.

I'm not sure what you are getting at.

My point is that they are very different companies, with different ways of making money and different risk profiles. But all with massive growth currently.

So to your question about which one to invest into, then you would make that decision based on which vertical you prefer (ads? service? consumer hardware?) or which one is more risk tolerant.

Or since they don't overlap that much (when just looking at tech), you could invest in all threes. Unlike say, FB and GOOG, which are both suffering from the same risks (but are making different bets for the long term).

I did not ask "which one to invest into" as in getting a suggestion.

I asked about which one you would invest into and your reasoning behind it.

> But with the advent of AI, your "AI companion" will become so valuable that users will probably pay hundreds of dollars per month for it.

If that's true—of which, respectfully, I am highly skeptical—that doesn't mean they'll be making vast amounts of money.

Most people—like, at least 70% of Americans—can in no way, shape, or form afford hundreds of dollars per month on something like that.

Maybe they can. Most americans go to school, right? What if an AI companion makes that obsolete? University too. Those are very expensive years that can be saved. Maybe you cannot get a high paying job anymore without a $500/month AI companion because without it you are considered stupid.

How about doctors? How much visits to a doctor can be made obsolete with an AI companion?

How about entertainment. Americans spend something like $200 per month on entertainment. Maybe your AI companion can entertain you better.

> Maybe you cannot get a high paying job anymore without a $500/month AI companion because without it you are considered stupid.

This is very much saying "maybe if you're not already rich, you shouldn't be allowed to get a good job."

Is it currently different? A college degree in the US costs tens of thousands of dollars.

And years of your time. With an AI companion, you might have to pay $500/month but maybe you can start working right away. Skipping all those "learning" years.

A college degree also signals something: that you stuck with something for years, and finished it, and that your college believes you learned something along the way.

With an AI companion, all you signal is that you have several hundred a month to spend on an AI companion.

It's possible for someone born into poverty to get scholarships and college loans to get a higher education. (Sometimes it's not the best deal in the world, but that's not the point here.) It's a large expenditure, but it's a one-time expenditure; once you have the education, no matter how poor you are for the rest of your life, you still have it.

No one's going to give you a loan to get a $500/month "AI companion" for the rest of your life—in part, precisely because it's for the rest of your life.

What you are proposing can not be seen as anything other than a way to ensure that society is permanently stratified by socioeconomic class.

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