Not Boring by Packy McCormick

Power in the Age of Intelligence

2026-02-18 · 13:33 UTC ·Packy McCormick ·38 min read

Brief

Power in the Age of Intelligence argues that the defining business dynamic of the current Techno-Industrial Revolution is accelerating concentration: firms that seize a scarce, industry-specific asset (the 'High Ground') and use new general-purpose technologies (AI, batteries, rockets) to break the industry constraint ('Schwerpunkt') will capture outsized value. McCormick supports this with economic studies showing rising markups and asset concentration, historical case studies (Standard Oil, Carnegie Steel, Ford) and modern analogues (SpaceX, Stripe, Ramp).

He emphasizes that moats are not generic (hardware ≠ moat, SaaS ≠ guaranteed winner) — strategy must identify the constraint, execute to remove it, and then integrate complementary assets (manufacturing, distribution, customer relationships) to capture returns. Concrete examples include Base Power Company (home batteries + software + market trading in ERCOT), Earth AI’s shift from selling models to owning rigs, and SpaceX’s vertical stack and xAI acquisition (Feb 2, 2026) as a bet on space-based infrastructure enabling new AI scale.

Why it matters

Market concentration is accelerating: De Loecker & Eeckhout find aggregate markups rose from ~21% to ~61% (1980s → late 2010s); Kwon, Ma & Zimmermann show the top 1% of U.S. corporations by assets rose from ~72% (1930s) to ~97% (2010s), and the top 0.1% from ~47% to ~88%.

Key details

  • Private-public valuation gaps illustrate 'winner takes more': Stripe is pursuing a private tender at ~$140B vs. Adyen at ~$34B; Ramp was valued at ~$32B privately while Brex sold to Capital One for $5.15B.
  • Big tech is vertically expanding into capital-intensive infrastructure: the four largest former 'software' companies plan ~$600–700B in data center capex (Amazon ~$200B, Google $175–185B, Meta $115–135B, Microsoft $100–150B), while SpaceX announced (Feb 2, 2026) an xAI acquisition and ambitious plans including ~10,000 Starship launches/year and space-based data centers.
  • Packy’s strategic framework: identify the industry constraint (Schwerpunkt), break it to seize the 'High Ground' (scarce defensible asset), then vertically/horizontally integrate — illustrated by historical examples (Rockefeller, Carnegie, Ford, Swift) and modern firms (Base Power Company, Ramp, SpaceX).
Cleaned source text

title: Power in the Age of Intelligence

author: Packy McCormick

content_type: article

publication: Not Boring by Packy McCormick

published: 2026-02-18T13:33:05+00:00

source_url: https://www.notboring.co/p/power-in-the-age-of-intelligence

word_count: 8549