TLDR Tech / Founders
The Collapse Of Terminal Value - What Happens If AI Makes Every Moat Temporary?
\$58 trillion in S&P 500 market cap repriced at 5x free cash flow instead of today\'s 20x means a 75% drawdown - roughly \$44 trillion evaporating. That\'s the math if AI makes every competitive moat temporary instead of durable. Newspapers went from 12-15x EBITDA to 2-4x in a decade, retail followed, and taxi medallions went to zero. The \$300-500B/year in AI capex only pencils out if returns are durable, but AI itself is the thing making returns short-lived.
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