The gold rush didn’t make the richest people the miners. It made the people who sold the picks and shovels. But eventually, even the miners started asking why the shovels kept getting more expensive.
The conversation around artificial intelligence is changing.
For the last two years, the AI story has been about intelligence: bigger models, more parameters, more tokens and greater capability.
Now it’s becoming something much more familiar. It’s becoming a procurement story.
History has a funny way of repeating itself. Railways, cars, electricity, cloud computing and even mobile phones all followed a similar path.
The breakthrough technology grabbed the headlines. But eventually, customers stopped asking, “How clever is it?” and started asking, “Is it worth the money?”
That moment may have arrived for AI.
The argument is that many enterprises are paying ever-growing token bills while giving away something far more valuable: their proprietary data, their institutional knowledge, and ultimately their competitive advantage.
As they say, controlling your weights is controlling your fate.
Whether you’re running a government, a multinational or a family business, ownership matters.
Imagine hiring a consultant who solves your biggest business problem but quietly retains copies of all your customer information, operating manuals and future strategy. Most businesses wouldn’t tolerate that for a second.
Yet that is precisely the question many companies are now asking themselves about AI.
Who owns the data? Who owns the models? Who owns the future improvements built from our knowledge?
The industry has become obsessed with tokens.
If AI genuinely creates enormous business value, why is everyone charging for words processed rather than value created?
Some argue that, once you take into account the number of tokens required, hiring people can actually be cheaper than using AI. Cost is becoming an increasingly important issue.
Ultimately, AI needs to disrupt the labour market, a sector worth trillions, rather than simply the IT industry, which is significantly smaller.
It’s a bit like paying your accountant by the number of calculator button presses rather than the amount of tax they save you.
The pricing model itself may be encouraging the wrong behaviour.
Even more interesting is what is happening beneath the surface.
Several major Western companies are already experimenting with cheaper open-weight Chinese models. Not necessarily because they’re better, but because they’re often good enough at a fraction of the cost.
This could shift the economic landscape as Chinese large language models (LLMs) gain traction in the West, leading companies such as Coinbase and Microsoft to consider them for their agentic tools.
We’ve seen this story before. The companies that survived weren’t always those with the best technology. They were the ones that built ecosystems, software and services that customers couldn’t easily replace.
Companies are no longer just selling a language model.
They’re selling trust, control and sovereignty.
That may prove to be the more valuable product.
As investors, it’s a useful reminder that technological revolutions rarely end where they begin.
Early winners often dominate the headlines. Later winners quietly build the infrastructure, the workflows and the business models that everyone else depends upon.
Benjamin Graham famously said that, in the short run, the market is a voting machine, but in the long run, it’s a weighing machine.
The same may prove true for AI.
Today we’re voting for the smartest models. Tomorrow we may be weighing something entirely different: who controls the data, who owns the economics, and who captures the value.
Sometimes the most important question isn’t who has the best AI.
The real winners won’t necessarily have the smartest AI.
They’ll be the businesses that become impossible to remove because they are:
Protected by infrastructure that’s incredibly hard to copy.
Deeply embedded in customers’ operations.
Connected to every important system.
Enriched by proprietary data that compounds over time.
Trusted in high-stakes and regulated industries.
Awet Ghirmay, Head of Investment Research
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Risk warnings
The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
