BY JASON PRINT, CFP® CO-CEO 2
As noted in the first part of this article, we are in the infancy of the technology called artificial
intelligence (AI), and it’s extremely difficult to predict what it will look like several years down the
line. It’s equally difficult to predict what companies will be the biggest beneficiaries and what
platform will turn out to be the dominant player.
Over the last couple years, Nvidia has certainly been at the center of the AI investment boom.
The company’s revenues and profits have skyrocketed in that time, and its industry-leading
Blackwell chip has been in high demand. ChatGPT and other companies have been spending
billions to build large language models. Recently, some of the top AI players took a hit when
news broke that DeepSeek might be able to do many of the things Chat GPT can, but much
more costefficiently. After the initial knee-jerk reaction, these stocks started to recover.
My intention is not to make the case that DeepSeek will replace ChatGPT or one is better than
the other. The point I want to make is that we are still in the early stages, and we will likely see
many twists and turns (and some downturns) as this new technology gets adapted and
integrated into society.
I recently finished reading The Founders – a book telling the story of PayPal and the
entrepreneurs who shaped Silicon Valley. The early leadership of PayPal had a number of
brilliant twentysomething computer geeks who are industry thought leaders today. Elon Musk
was one of the top individual investors and an early CEO. Peter Thiel (the first outside investor
in Facebook and founder of Palantir) was CEO when the company went public. Reid Hoffman
(founder of LinkedIn) was a key contributor to the relationship of eBay and PayPal.
One of the amazing stories in the book relates to how different the early vision and first-
generation products of PayPal were from today. The initial product was technology to send
money between two Palm Pilots. When the early eBay sellers and buyers started using PayPal,
the company thought of it as annoying and wasn’t really a fan of its product being used on some
goofy auction site. Of course, this became the key to PayPal’s success over time, and as eBay
grew, so did PayPal, increasing its revenue and eventually becoming the profitable money
movement company it is today. Credit goes to the early leaders for recognizing before they
burned through too much cash that perhaps moving money between Palm Pilots is not the
future of online money transfers.
As I was reading the story, it struck me how much has changed in 2530 years – not only in the
world of technology but also of handheld devices. When the initial Palm Pilot 1000 was released
in the late 1990s, it quickly became the dominant handheld computing device. It was
revolutionary at the time, and many companies raced to develop software that would run the
Palm Pilots. A few short years later, Blackberry released a better product and quickly came to
dominate the market, particularly in the business segment. At its height, it had a well over 50%
market share. Today, Apple’s iPhone is the dominant force in the world of handheld devices.
The first iPhone had surprisingly limited capabilities, and it was far from a forgone conclusion
that it would become the powerhouse it is today. I look at investing in AI from a similar
perspective. It’s a technology that will inevitably impact society. However, the leaders of today
may be the Palm Pilots and Blackberrys of tomorrow. One of the central tenets of our
investment philosophy at Summit is diversification. Therefore, while we will certainly have
exposure to the current top AI and technology names, we will also be well diversified so that
if/when another company overtakes today’s leaders, our clients will benefit overall. The
downside to this approach is that you may not be able to go to a cocktail party 20 years from
now and say, “I put all my money in the top AI product back in its infancy.”
