Jeremy Grantham, the co-founder of asset management firm GMO and one of the most respected market strategists alive, is sounding the alarm on what he calls a “watershed change” in Big Tech. The man who correctly identified both the dot-com bubble and the 2008 housing crash says the Magnificent 7 are heading into a “fight to the death” over artificial intelligence.
Speaking on Bloomberg’s Odd Lots podcast on June 18, Grantham laid out a thesis that should make anyone holding concentrated tech positions uncomfortable. Hyperscalers are projected to spend roughly $725 billion in capital expenditure this year, a figure equal to about 2% of US GDP, with a massive portion flowing directly into AI infrastructure.
From monopoly to “unmonopoly”
Here’s the thing about the last decade of Big Tech dominance: it was built on moats. Each of the major tech companies largely owned its lane. Google had search. Meta had social. Amazon had e-commerce and cloud. Apple had the hardware ecosystem. They were, in Grantham’s framing, comfortable monopolies with fat margins and minimal overlap.
AI is blowing that apart. Grantham described the current environment as a transition from a “monopoly world” to a “brutal competitive world.” Every major tech firm is now pouring billions into overlapping AI initiatives, building competing large language models, competing inference infrastructure, and competing AI-powered products.
