Here are a couple of interesting stats about American high tech companies. Market concentration has never been greater than in past decades, as the one created by Artificial Intelligence (A.I.). According to senior index analysts for S&P Dow Jones Indices, Nvidia alone, which makes A.I. chips, makes up more than 8 percent of the S&P 500. Nvidia is now worth $5 trillion as it continues to consolidate power in A.I. boom. Apple and Microsoft now top $4 trillion. Those companies combined with Meta, Amazon, Alphabet and Tesla make up more than a third of the entire index. According to Harvard’s economic faculty, spending on data centers, which are filled with the Nvidia chips, accounted for 92 percent of the country’s gross domestic product (G.D.P.) growth in the first half of 2025. Chip technology is a powerful technology that can be used to develop advanced weaponry and drive economic opportunity. Companies like Microsoft and the software company Oracle are pouring hundreds of billions of dollars into building data centers for A.I.
Now the question becomes: “What is the high tech impact on main street versus wall street?” Most analysts are concerned particularly about the impact of current and future A.I. investments on the labour market for example. While the current situation continues to produce more millionaires and billionaires, there is already evidence that companies are looking at ways of reducing labour costs through A.I. and A.I. assisted robotics. For example, it concerns me that Amazon has been aggressively looking to do more with less. It also concerns me that Amazon recently announced that it was laying off 14,000 corporate employees partly due to its use of A.I. It is further reported that Amazon spent more than $34 billion on capital expenditures in the third quarter of this year, in large part to set up data centers that power cloud computing and A.I. It should be noted that the company’s sales totalled $180.2 billion from July through September of 2025, up 13 percent from the same time in 2024. Profit was $21.2 billion, up a whopping 38 percent. Furthermore, as an obvious future cost cutting initiative, the New York Times reported that Amazon’s automation team has ambitious goals to use robotics to avoid hiring more than half a million workers by 2033.
Apple’s iPhones are fuelling record sales and profit so far this year, despite raising prices on its latest iPhone and having largely avoided the A.I. arms race. However, the company still accounts for about 6 percent of the S&P 500 index. While Apple is not pouring billions of dollars into data centers, developing expensive A.I. systems or building its own chatbot, the company continues to collect payments from Google. Apple also charges A.I. companies to reach iPhone customers. Most importantly, instead of bringing its manufacturing home to the U.S., Apple shifted some production from China to India, Vietnam and Thailand. Almost nothing is made in America, and an estimated 80 percent of iPhones are still made in China.
All said and done, some investors have questioned whether A.I. will actually increase productivity and sales. This is the trillion dollar question given that the short-term returns have not been all that great in light of the billions of dollars of current investment capital. Nevertheless, it’s clear that the stock markets are apparently very optimistic. Only time will tell.
In addition, there is still the expected negative impact on the labour market as evidenced by recently announced employee cutbacks by several high tech firms using A.I. A.I., complemented by enhanced robotics, is seen as a tool that could replace people in many jobs, including those in white collar occupations. The jury is still out on this one. Today, youth unemployment in North American is at its highest rate and recent college graduates in several fields, including in the computer sciences, are experiencing a great deal of difficulty in obtaining employment in their field of study. Higher unemployment may be one of those areas on main street that would be the result of the potential direct impact of what’s happening on wall street. Of course, the billionaires would argue otherwise.
FROLITICKS 