The performance of the Magnificent Seven US technology companies could be challenged by intensifying competition, according to one of London\u2019s largest tech investors.<\/p>\n
As more cash floods into artificial intelligence and large language models become more sophisticated, the dominance of the elite group, which includes Microsoft, Nvidia and Alphabet, the owner of Google, could be disrupted, Ben Rogoff of Polar Capital Technology Trust, which manages about \u00a35.8 billion in assets, said.<\/p>\n
\u201cIf there was ever going to be a risk posed to the natural monopoly statuses of these businesses, it would be when AI became more disruptive,\u201d he said. \u201cAnd I think that that\u2019s what we\u2019re looking at in the years ahead.\u201d<\/p>\n
The value of the largest US tech companies has been turbocharged by an expectation that they will be able to capitalise on a boom in demand for AI<\/a>. The so-called hyperscalers \u2014 Alphabet, Meta, Microsoft, Amazon \u2014 are spending hundreds of billions of dollars a year in aggregate on building AI infrastructure, including data centres<\/a>, electricity generators and the chips to power AI workloads.<\/p>\n \u201cThe cost of remaining in the AI race continues to move up meaningfully,\u201d Rogoff said.<\/p>\n The performance of the Magnificent Seven could also diverge further, he said, as some companies gain a greater lead in AI and others fall behind. \u201cIt feels to us like the AI story is going to become more complicated,\u201d he added.<\/p>\n \u201cA lot of people in the market think the AI story is synonymous with Mag Seven and we don\u2019t see it that way at all. We see the AI story as moving into a more disruptive phase where ever-more capable models disrupt companies at the periphery of tech and start to present more tangible risks to the value of incumbency also within tech.\u201d<\/p>\n Polar Capital Technology Trust entered the FTSE 100 in February. Its largest position is in Nvidia, the chipmaker that accounts for 10 per cent of its net asset value, followed by 8.8 per cent in Alphabet. However, relative to its benchmark, the trust is underweight the Magnificent Seven.<\/p>\n \u2022 Is it worth buying the world\u2019s most valuable public company?<\/a><\/p>\n