Vulcan Materials Company has produced some of the strongest and most resilient economic gains for investors at around 25% gross margins for 50 years.
Vulcan’s business is crushing rocks, and then driving those rocks to where people need crushed rocks.
I mention it because Vulcan isn’t a sophisticated business at its core, but its economic returns are exceptional, because they do their unsophisticated work exceptionally well, and exceptionally efficiently.
Across the economy, most economic gains are created by companies like Vulcan, who do boring repetitive work exceptionally well and efficiently.
I expect this to hold true into the era of AI. Most stuff probably doesn’t need an exceptional model, and paying for an exceptional model to do unsophisticated work will leave your business vulnerable to competitors who take time to find the most efficient model for the task, and undercut you.