It seems ridiculous now, but when I was a cub reporter covering the tech industry, our publication had an entire beat focused on word processing – and it was one of the most sought after assignments in the newsroom. We had another reporter who focused on spreadsheets. Because I was the new kid, I covered databases – databases! – and other reporters covered desktop publishing software and utilities. At just one publication, that’s a half a dozen full-time reporters tracking and analyzing applications that have mostly faded into the background noise of today’s tech industry. At the time (late 1980s), there were at least a dozen outlets doing the same thing.
Think about that – nearly one hundred journalists covering workplace software!
But if you put that era in context, it certainly rhymes with today’s obsession with AI. Think of “word processing” as “ChatGPT” and “spreadsheets” as “Claude Code,” and you have a pretty good sense of what it felt like to be covering tech during its initial rise. An entirely new class of products were revolutionizing the workplace, and it seemed like everything was at stake.
Software was the story of the PC age. Operating systems had consolidated into two players: Windows and Macintosh, with the Mac very much David to Microsoft’s Goliath. But on top of those two platforms, hundreds of software companies competed in what felt like a heady free for all. Sure, there was Microsoft Word, but there was also WordPerfect, MacWrite, WordStar, MultiMate, and dozens of tiny competitors like Perfect Writer (I worked there for a hot minute). In spreadsheets, there was Lotus123, Excel, VisiCalc, Borland Quattro, SuperCalc, and again, another few dozen smaller competitors. The same was true for databases, desktop publishing, and utilities, where the competitors numbered in the thousands.
By the mid 1990s, Apple had lost both the hardware and the software races, and faced financial disaster as a result. Just as the web platform shift was building, Microsoft came to Apple’s rescue with a $150 million investment that guaranteed Apple users would have access to Microsoft applications for at least five years.
Why am I going on about all this history? Because so many in our industry seem to have forgotten it. Steve Jobs’ deal with Bill Gates was all anyone could talk about in 1997 – and yet a few years later, the world wide web obviated the software industry as we knew it. My point? Platform shifts are rarely understood in the moment, even by those with the most at stake.
Last week I wrote about Palantir CEO Alex Karp and Microsoft CEO Satya Nadella, both of whom are pushing a narrative about how OpenAI and Anthropic are bad faith actors hell-bent on “stealing your alpha.” Thinking about their complaints in the framework of tech history, they both end up sounding an awful lot like the leaders of legacy software companies protesting the ascendance of upstarts like …. Microsoft and Apple. Bill Gates famously “borrowed” his DOS operating system from a legacy company called Digital Research, which was the fourth largest software firm in the world at the time. And Steve Jobs famously “borrowed” the tech behind the Mac from Xerox’s PARC lab. Xerox was one of the largest corporations in the world at the time.
The tech industry maintains a tangle of contradictory maxims and mythologies, but principal among them is the idea that at any given time, an upstart will break through and “change everything.” It’s that conviction that fueled Andy Grove’s famous statement claiming “only the paranoid survive.” And it’s the foundation of the Valley’s venture investing community, which made its fortune betting on “disruptors” like Netscape, Google, Tesla, Salesforce, Uber, and now Anthropic and OpenAI.
The last few platforms shifts – mobile, social, web, PC – were built over decades as infrastructure, hardware, software and consumer habits crystallized into somewhat predictable industry sectors. But the AI shift is happening over a few years, with every major tech player running headlong at the opportunity without a clear sense of how things are going to shake out. They must both protect their flanks while embracing a mentality of disruption – a contradiction that’s beginning to bite.
Despite the tech industry’s idolatry of disruption, Palantir and Microsoft are warning their customers to avoid frontier models altogether, and Apple is closing the app store to AI startups and suing OpenAI. But if these two giants are going to thrive in a post-AI world, they’ll have to find a way to embrace the chaos and build platforms that are true to their roots as original tech disruptors. While they fight rearguard actions, thousands of startups are trying to build the next application layer for AI – the equivalent of spreadsheets and word processors back in the PC era. Will it be coding or consumer agents? Or will it be an entirely new class of products and services from a company or companies we’ve not yet heard of?
If the past is any prelude, the latter will certainly be the case. But this time around, the incumbents aren’t just industry leaders. They’re the most powerful organizations in the history of humanity. How they respond to this moment will define more than the course of an industry – it will shape civilization itself.
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