Former Google CEO Eric Schmidt says the next wave of value creation in AI will not come from piling into already-dominant tech giants.
Speaking at the Imagination In Action AI Summit in Davos, Schmidt says the market has already priced in much of the upside for the largest AI beneficiaries, as both public and private valuations have become increasingly difficult entry points for new investors.
Schmidt says most of the obvious equity gains have already been captured by the largest technology firms, but investors can still capture potential upside gains by investing in firms that will witness AI-driven productivity growth.
“Well, one way to understand the value that’s being created in AI is that there will be businesses that will become much more successful because of AI. So I think the best investment is to invest in businesses where AI will make them transform. It’s probably pretty late to have all the gains that you have in the Magnificent Seven, although it’s not my area of expertise, simply because those are very highly valued.
And the startups are now so highly valued when they get started that it’s really hard to get into them.”
But for those who are determined to make a lot of money in the coming years, Schmidt says that the best way to rake in cash is to build a superior AI agent that solves a bottleneck for businesses
“If you really want to make money, it’s actually easy. Found an agentic AI company. And I don’t mean one designing agents, I mean build an agent to do something. This is the agentic period in AI. And for the next year or two, everyone’s going to build agents. The agents are all going to compete.
If you build a better agent than anyone else, you can probably build one incredible company and own it yourself.”
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