There are currently three major trends in technology driven by technological, as well as sociological and political currents: AI, crypto and carbon removal. These groundbreaking developments, like any major innovation, are received with skepticism, a pattern that has been evident for decades.
PC: "too expensive and useless"
In the 1980s, when the personal computer emerged, personal computers were mostly seen as too expensive for a device without many relevant applications. That quickly changed thanks to price reductions and standardization of software, after MS-DOS became the world standard thanks to a sophisticated licensing model by Microsoft. The word processor and spreadsheet quickly made the PC indispensable in the office.
Internet: "too difficult and dangerous"
In the 1990s, this pattern repeated itself with the Internet. The personal computer was seen as a work tool, not a potential mass medium. Bill Gates even declared that the Internet suffered from lack of standards, it was insecure and far too complicated, which is why he did not use the word Internet even ten times in his book The Road Ahead.
Bill preferred to talk about the information super highway, which he was going to build himself with the closed MSN, which we never heard anything more about. Yet within a few years, email, the Web browser and applications such as eBay, Amazon and Google made the Internet accessible to consumers.
In the Netherlands, it took until late 1996 for the NOS Journaal to understand that the Internet was about to become a serious mass medium, although Joop van Zijl still compared computer penetration to that of the microwave oven.
Smartphones: "only for representatives"
When the iPhone hit the market in 2007, the Blackberry reigned supreme in the business market. Although most of the population in developed countries already had a cell phone, often a Nokia, criticism of the iPhone was not muted. "Too expensive, only useful for sales representatives," was the verdict of a friend from the world of IT. Incidentally, the same chap who ten years earlier judged the cell phone as "only useful for drug dealers," a common sentiment.
Microsoft CEO Steve Ballmer laughed off the iPhone in a video in which, as he was taught by PR people, he quickly switched to promoting the company's own Windows Mobile which we also never heard anything more about. It makes CEO Satya Nadella's feat of completely revitalizing Microsoft after Ballmer all the more galling, but about that another time.
AI, crypto and carbon removal on the turn
Right now we are seeing the exact same patterns as before, but now about AI, crypto and carbon removal:
- AI is often dismissed as useful for work, but without useful applications for consumers.
- Crypto is criticized with comments like, "Name an application." Meanwhile, the first application lies in something as basic as redesigning the banking system, with each user managing their own account and making banks obsolete. Apparently, the significance of this is missed by many. Tip: Never get into an argument with people who were too lazy to read the Bitcoin white paper but have an opinion.
- Carbon removal is often characterized as a fraud, referring to familiar examples such as inefficient cooking ovens, without knowing or understanding the complexity and potential of projects that do actually remove carbon from the atmosphere, such as ocean fertilization. This kind of removal of carbon from the atmosphere is the biggest task facing the world in the coming decades. Tip: Never engage in climate change discussions with people who were too lazy to read the summary of recent IPCC reports.
Admittedly, I have a personal fascination with how innovations break through or fail. That's why both my 1993 graduate thesis and my 2001 book were both called "In Search of the Holy Grail," although some weirdo photoshopped the cover of my book which, by the way, is still on sale in large numbers. And not because of its great success.
I learned more from Megamistakes than Megatrends. Everyone knows Rodgers' adoption curve, but it remains mysterious why one innovation catches on and another flops mercilessly. For carbon removal, crypto and AI, there are several key success factors, some of which I want to highlight.
CO2 success was not during COP29
Breakthroughs in carbon removal require political will. All media were focused on the COP29 climate summit in Baku, but in the meantime, successes were being made in Brussels and Washington in the fight against climate change.
In Brussels, the European Council approved the creation of the first EU-wide certification framework for permanent carbon removal, carbon farming and carbon storage in products. This voluntary framework is intended to create a certification system that can quantify, monitor and verify carbon removals and counteract greenwashing; carbon farming. The EU's adoption of the new rules marks the last major legislative step to give the green light to the creation of the new certification framework for carbon removal.
Now in Dutch: standards are being introduced that will allow companies and citizens to actually offset their carbon emissions, and not by planting or preserving flimsy forests, but by measurably reducing CO2 emissions or even better, removing CO2 from the atmosphere.
Democrats and Republicans together for carbon removal
In the United States, a bill was introduced by Senators Lisa Murkowski (Republican, Alaska) and Michael Bennet (Democrat, Colorado) seeking to expand carbon removal subsidies for a wide range of technologies intended to permanently remove carbon dioxide from the air and seas.
The bill is unlikely to be passed by the current Congress yet due to time constraints, but its introduction indicates that subsidies for carbon removal will be expanded even under President Trump. The fact that the bill was introduced by senators from both parties, a rarity these days, is hopeful.
AMCs for CO2
In coming years, watch for the term Advanced Market Commitment (AMC), explained here by the Economist: no matter how the political winds blow, the pressure from society for decarbonization is so great that smarter companies are independently seeking to remove or minimally offset their own carbon footprint, by funding techniques that remove carbon for the long term; preferably forever. Salesforce, Google, Meta and Microsoft are just the first from a long list of companies that will fund AMCs.
As another example, it was announced last week that Planetary Technologies has removed 138 tons of CO2 through "Ocean Alkalanity Enhancement (OAE)," which, by adding minerals or substances, increases alkalinity, the ocean's capacity to absorb CO2e, with the goal of sequestering CO₂ and combating climate change. Buyers of the associated carbon removal credits were Shopify (96 tons) and Stripe (42 tons) under a "pre-purchase agreement. In Scrabble, you don't put it easily, but it really exists and will be used a lot.
Old school tech compared to AI and crypto
Stock market valuations are a reflection of market expectations, and the enthusiasm around AI and crypto shows that investors have confidence in their longer-term potential. I have created four virtual "baskets" that I have posted about before:
- 'MANAAM': the old school tech companies
- Spotlight 9: the nine I believe to be leading tech investments
- AI Spotlight 9: nine companies benefiting from AI
- Crypto Spotlight 9: the biggest nine cryptos measured by market value
Old school tech MANAAM: +36%
In the broader tech sector, established players continue to dominate. At one time investors were fans of the term FANG (for Facebook, Apple, Netflix and Google, as if Microsoft meant nothing), but let's take the "MANAAM" group consisting of Meta (formerly Facebook), Apple, Microsoft, Amazon, Alphabet (formerly Google) and Netflix. The average increase in shares of this now classic little club this year is a whopping 35.9%. That's phenomenal from an investment perspective, until you consider that the S&P 500 is also up 27.19% this year.
Spotlight 9: +63%
Microsoft(14%), Alphabet(22.28%) and Apple(27.84%) are not even outperforming the index. While investors buy tech stocks for the higher price appreciation, compensating for the higher risk.
However, those who had bought the Spotlight 9, which consists of the major tech companies and the two largest crypto currencies Bitcoin (+119%) and Ethereum (+57%), would have already seen their investment portfolio rise 63.37% this year. Compared to the MANAAM, Netflix is missing from the Spotlight 9, while Nvidia (+187%) has obviously been added as the world's most valuable technology company.
AI Spotlight 9: +76%
The valuation of AI-driven companies such as Nvidia, which play a key role in the development of AI infrastructure, has reached record highs. This shows that the market recognizes the speed at which these AI-powered companies are seeing their results soar.
Since Nvidia is already included in the Spotlight 9, I left out the market leader in my also completely arbitrary "AI Spotlight 9," consisting of nine companies that I suspect AI will allow them to grow faster than the leading large tech companies (the MANAAM group) and perhaps even faster than the Spotlight 9.
With 76.11% growth, that is certainly the case this year, with it being entirely remarkable that this increase came about despite Super Micro (which saw the auditor go the distance), AMD (-1%) and Gigabyte, hardware parties that did not keep up with the growth of the rest. Software company Palantir (+305%), which I wrote about in early November, more than makes up the difference.
Crypto Spotlight 9: +191%
Since the approval earlier this year of Bitcoin ETFs, tens of billions have already flowed from the traditional investment world toward crypto. The wait was for the moment when the "alt rotation" would begin, the moment when more money flows into other cryptocurrencies than Bitcoin, which counts as the unofficial kickoff of "altcoin season. That moment occurred yesterday, when the Ethereum Spot ETF net inflows, outpaced those to Bitcoin.
So the real daredevil is now stepping big into the craziest coins that often have no underlying value at all, but that is as risky as putting everything on red or black in a casino. A less risky strategy, insofar as that is possible in crypto, is to spread out in the biggest cryptocurrencies and take advantage of overall sentiment.
The "Crypto Spotlight 9" consists of the largest crypto currencies measured by market value, excluding stable coins, memecoins (crypto giblets) and tokens linked to crypto exchanges such as BNB.
That group, listed alphabetically as Avalanche, Bitcoin, Cardano, Ethereum, Solana, Stellar, Toncoin, TRON and XRP, achieved a 191% increase so far this year. So is this a buy recommendation? Absolutely not.
What I do recommend to anyone active in technology and innovation is to look into AI, carbon removal technology, blockchain and crypto-currencies. Just like in the 1980s with the personal computer, the Internet in the 1990s and the smartphone 15 years ago, these are developments that are unstoppable worldwide.
A practical way to stay informed is to then invest a bit in those sectors, with my advice being to do so only with money you don't need for rent, mortgage or other daily concerns. Even within technology and crypto, it certainly pays to look closely at what the intended investments actually involve; what does Palantir actually do, is Ethereum threatened by Solana and SUI; and isn't it funny to take a small gamble on memecoins after all?
Anyone who puts in some money will start to inform themselves. The alternative is to write a weekly newsletter about tech and innovations, but that also requires a huge ego.
Warm regards, thanks for your interest and see you next week!
