Is big tech finally facing the same existential pressure it once applied to others? The so-called magnificent seven, once seen as bold innovators, are now showing signs of hesitation, slow execution, and internal confusion. Where did it all go wrong?
Apple, Google, Microsoft, Meta, Amazon, Tesla, and Nvidia dominated the last two decades by creating new markets. But many are now grappling with how to adapt to one they did not fully see coming. Artificial intelligence was meant to be their next act. For now, it is becoming their biggest challenge.
According to Tim Higgins at WSJ, the tech giants in Silicon Valley are having a midlife crisis over AI, and he could be right. Sure, these firms still have enormous influence, but the nature of that influence is changing. Their growth stories are interrupted by delayed products, missed expectations, and rising frustration from users and investors alike.
In my column this week, I explore the challenges the old disruptors of Silicon Valley have when they face the disruption. It's a weird time for the likes of Apple, Google, Facebook and Tesla as they try to navigate an uncertain future around AI. (link below) pic.twitter.com/Ezv57aQDHb
undefined Tim Higgins (@timkhiggins) May 10, 2025
Apple's delay, Google's gamble
Despite big promises in Apple's keynotes, Siri has not improved in a decade. Further delays with the overhyped AI-powered Siri upgrades frustrated customers and investors as it once again overpromised and under-delivered.
We have seen a lengthy rollout of Apple Intelligence that users rushed to disable. This was followed by rumors that Google is close to striking a deal with Apple to integrate Gemini into the iPhone. All of which would have been unthinkable a few years ago.
While Apple focuses on perfecting its offering, others release messy, unpredictable, and rapidly evolving tools. The contrast is striking.
There is no other way to put it. Apple Intelligence isn’t.
undefined Robert Scoble (@Scobleizer) March 8, 2025
Its leadership has been abysmal. Despite all the advantages a company could have.
It looks like Microsoft from the outside lately. As a former Microsoft employee that is not a good thing.
Speaking of which. Microsoft… https://t.co/GztojeJHSq
Google has taken the opposite route, pushing Gemini across its entire ecosystem and beyond. Assistant is being phased out, and Gemini is now the default on Android devices. But Gemini has had issues from the start. High-profile errors in image generation and factual inconsistencies have drawn criticism, even from Google's leadership.
Former engineers have openly said the rollout was mishandled, and users report that Gemini still struggles with basic tasks. It is capable but unreliable, a serious flaw for a product meant to be a daily assistant.
Microsoft, Amazon, and the midfield fog
Microsoft has positioned itself as the infrastructure layer for enterprise AI, but its consumer ambitions have lost momentum. After the misadventures with Zune, Nokia, and Skype, it's worth remembering that not everything Microsoft touches turns to gold.
Copilot was supposed to be a game changer. Instead, it has plateaued, with many users complaining about the poor performance experience compared with ChatGPT.
After multiple delays, privacy concerns, and an underwhelming Windows Recall launch, Copilot is seen as promising but incomplete. Microsoft's partnership with OpenAI remains strong, but the company appears less confident about its roadmap for AI products outside Azure. Is history repeating itself?
Amazon's Alexa is also behind schedule. A complete redesign was promised to modernize the assistant using generative AI. But testing revealed latency problems and inconsistent behavior, pushing the launch into 2025. In the meantime, Alexa has lost ground to competitors. Its capabilities remain primarily static, and user expectations have moved on. The race to redefine voice interaction is being led elsewhere.
Meta and Tesla: high risk, uneven reward
Meta continues to spend heavily on AI while simultaneously restructuring teams and cutting headcount in its VR and metaverse divisions. Its models, including LLaMA, have improved, but no breakthrough product has captured the public imagination.
Once again, the gap between concept and execution is still vast. Meta's AI vision is expansive, but its commercial impact remains unclear. Things got even worse when Zuckerberg revealed his vision for a future that suggests 80% of our friends will soon be AI bots, owned by Meta, selling us things we want but don't necessarily need.
Loneliness now kills more people than smoking.
undefined Vinay (@vinayp10) May 8, 2025
Zuckerberg says AI can fix that.
Your next best friend? Won’t be human.
But it will know your secrets, simulate empathy, and never leave.
The truth behind it all? Way more terrifying than you think: 🧵 pic.twitter.com/wa6Hqf45hg
Tesla, too, is facing pressure. The company delayed its low-cost EV model, pushed back its plans for robotaxis, and reported its first year-over-year decline in vehicle deliveries. Its current lineup is aging, and regulators are scrutinizing its driver-assist features following a string of safety concerns.
Musk's promise of autonomous vehicles feels no closer to reality than it did two years ago, despite continued investment in AI and robotics. The narrative has shifted from market dominance to damage control.
Even Nvidia has limits. Despite remaining a critical player in the AI infrastructure market. Its chips power most of the world's leading AI models. But it is not immune to outside forces.
New US export restrictions forced the company to redesign hardware for China, leading to a multi-billion-dollar write-down. Supply chain concerns and market saturation are beginning to cloud investor sentiment. Nvidia's future remains strong, but the days of unlimited growth may be numbered. The demand it helped create is now evolving in ways it cannot fully control.
The rise of the AI-native startup
As the giants slow down, a new generation is accelerating. OpenAI, already a household name, secured a $40 billion investment round in early 2025, with a valuation exceeding $300 billion. Anthropic, maker of the Claude models, raised another $3.5 billion. These companies are not supplementing existing portfolios. They are building AI as a foundation, not an add-on.
Cohere, Runway, Mistral, and dozens of others are attracting top talent and significant capital. Many were founded by former engineers from big tech firms who became frustrated by red tape. They left to build without legacy constraints. Their products are not always polished, but they are shipping quickly, improving through feedback, and generating user momentum.
The advantage for these companies is speed. They do not need to retrofit AI into existing architectures. They can build for AI-first experiences from the beginning. This includes AI agents that can interact with other services, create workflows, and operate autonomously in ways that threaten the dominance of app ecosystems and search engines. Who needs a homepage if an AI assistant can find, book, and buy on your behalf?
A familiar pattern, a new context
This is not the first time the mighty have faltered. Blockbuster laughed off Netflix, and Kodak shelved its digital camera technology to protect film sales. Toys "R" Us failed to adapt to online retail. Once bogged down by antitrust action, internal divisions, and failure to spot the rise of the smartphone, Microsoft was seen as a stagnant giant until its recent resurgence. The cycle of disruption punishes complacency, no matter how dominant the incumbent.
What makes this moment different is the pace. AI is moving faster than most technologies that came before it. The companies that defined the mobile era were given time to adapt. Even a six-month delay can mean missing the window to define a category.
Apple's decision to wait on AI is a bet that customers prefer stability. Google's rush with Gemini is a bet that iteration wins. But neither strategy has yet produced a clear victory.
Investors are watching closely
For venture capitalists, this environment looks familiar. Periods of uncertainty often signal opportunity. With public confidence in big tech wavering, capital flows to startups that look like future incumbents. Investors are not abandoning Apple or Microsoft, but many are diversifying into firms that move quickly, own their technology stack, and have no legacy code to support.
This is creating a different type of competition. It is no longer about who can scale the fastest. It is about who can deliver usable, trustworthy AI experiences when people need them. Some investors now speak about a "third wave" of digital disruption, one that begins not in the boardrooms of Silicon Valley but in smaller labs and research collectives fueled by curiosity and speed.
The window is narrow, but real
The next few years will determine whether the Magnificent Seven can reinvent themselves and ride again or if a new group will rise in their place. Their scale gives them advantages, but size can be a burden in fast-moving markets. They know how to dominate, but not all have shown they can pivot.
If the past is any guide, a few will adjust. Others may slowly fade into irrelevance, while the new generation captures the attention and loyalty of users who care less about brand heritage and more about what works.
Some of the most valuable companies in the world were founded in the shadow of decline. The same could be true now. History is not repeating itself exactly. But it is starting to rhyme.
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