Power in the Age of Intelligence

The essay argues that the Age of Intelligence rewards companies that own a scarce, defensible position in an industry and use new technology to expand from it. The key frame is not software moats, but who can identify the bottleneck, break it, and capture the High Ground.

Reading notes

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• The author says the more useful question is which companies stand to benefit most from newly abundant inputs.
• The idea is summarized as winner takes more.
• Economic concentration has risen over time, with gains flowing mostly to the top of the distribution.
• The largest VC dollars and valuations are concentrating in a small number of companies.
• SaaS was a historical anomaly, not a permanent rule for every business.
• What matters is owning the scarce, defensible asset in an industry and using it as a base for expansion.
• The framework is drawn from military strategy, with Schwerpunkt as the key constraint to attack and High Ground as the position won after breaking it.
• Innovation alone is not enough; firms also need complementary assets such as distribution, manufacturing, and customer relationships.
• Rockefeller, Carnegie, Swift, and Ford are presented as examples of the same pattern across the Industrial Revolution.
• Each one identified a constraint in an existing industry, broke it, and then integrated outward.
• SpaceX is used as a modern example of vertical integration and of a company using its own infrastructure to reinforce its position.
• Base Power is used to show how a company can start from a grid bottleneck, place batteries near demand, and then expand into adjacent layers.
• Astro Mechanica and Somos Internet are described as other examples where the business model follows the constraint being attacked.
• The author argues that investors should stop defaulting to SaaS and ask whether a company should compete directly instead.
• Ramp is presented as an example of a company moving from a card product into a broader platform by owning the transaction layer.
• The conclusion is that power in the Age of Intelligence will flow to the companies that win the scarce position in their industry and then use abundant technology to keep expanding.