The Magnificent Seven will collectively spend more than $370 billion on
AI infrastructure alone this year, up
58 percent from $228 billion in 2024. The pattern of repeated increases exposes a competitive arms race where each upward revision by one company forces the others to match or exceed. Falling behind by even one quarter means surrendering billions in market positioning. The escalation reflects competitive pressure rather than planned investment based on ROI projections.
Seven companies controlling
more than one-third of the entire S&P 500 violates every diversification principle we learned from 1929. When the Four Horsemen (Cisco, EMC, Oracle and Sun Microsystems) dominated during the dot-com boom, they didn’t come close to this level of market control.
The Magnificent Seven achieved a
697.6 percent combined return from 2015 through 2024 while the broader S&P 500 gained
178.3 percent, outperforming eight out of nine years. The only year the broader market did better was in 2022, when everything crashed and the Magnificent Seven lost
41.3 percent while the S&P 500 lost
20.4 percent.
When these seven stocks fall, they fall hard, and they drag everything down with them. And this dynamic is raising serious questions about whether this massive spending will generate returns that justify current valuations.
Because the economic bubble is so astounding due to this unprecedented market concentration, when the Magnificent Seven correct from these valuation levels, we will get all the following negative outcomes simultaneously: a market collapse, legal liability for the crash and a trust crisis in the AI systems that now touch every sector of the economy.
Human and Social Harm
The Magnificent Seven aren’t just building a financial bubble; they’re also encoding systemic
bias into systems deployed at cloud scale, then hiding the damage behind private capital structures that require zero public disclosure. The evidence is alarming.
The University of Washington found AI models preferred white names in 85 percent of tests, while
Denver Public Schools’ AI consistently shows white men as doctors and Black men as janitors. Likewise,
Delta Air Lines uses AI pricing that delivers the best deals to wealthy customers and the worst deals to poor customers. AI pricing systems increasingly use personal data to determine the maximum price each customer will pay based on their browsing behavior, purchase history and demographic information.
When bias exists in one company, the market can route around it. Customers can switch, their competitors gain share and the problematic company loses value. But with such a small concentration of companies providing the foundational AI infrastructure that thousands of other companies build on top of, bias doesn’t stay contained. It propagates.
I’ve audited enough systems to know 85 percent of bias can be eliminated with proper standards and real commitment. The Magnificent Seven are choosing the opposite path. They’re making a calculated, operational choice to ship fast and settle discrimination lawsuits later rather than invest in prevention that would delay market capture.
bsky.app
