Rephrase and rearrange the whole content into a news article. I want you to respond only in language English. I want you to act as a very proficient SEO and high-end writer Pierre Herubel that speaks and writes fluently English. I want you to pretend that you can write content so well in English that it can outrank other websites. Make sure there is zero plagiarism.: Even though it’s taking way longer than expected, Apple won’t give up on building an EV. Mark Zuckerberg is still spending massively on AI and the metaverse. Two things in tech shocked me this month. First: Apple has been trying to build an electric vehicle to compete with Tesla for at least a decade, and it’s still years away, according to Mark Gurman, the world’s leading Apple reporter. Second: After splurging tens of billions on the metaverse, Meta CEO Mark Zuckerberg is now spending an estimated $18 billion on GPUs to chase the generative AI craze.Transform talent with learning that worksCapability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know MoreI asked my hedge fund manager friend about these hyper-expensive long-term projects. They are risky, given the huge costs. Why pursue them so aggressively?My friend helps run one of the best performing and most secretive hedge funds. I can’t reveal their name. However, this person has been investing for more than 2 decades and sold a startup to a big tech company in the first dot-com boom. They know their stuff and I regularly tap into this well of experience for advice. Without pausing, this investor said “I think Zuckerberg’s metaverse bet could actually work out. It could take another 10 or 20 years, but it could work.” He shares similar views on Apple’s Vision Pro goggles, which I’ve questioned in the past. “The lesson of Microsoft Windows”Then this hedge funder schooled me on the “lesson of Microsoft Windows.”This operating system was arguably the first major digital platform for the masses. It took many years to develop and massive upfront spending. The result was an ecosystem of hardware providers, developers, and users that generated so much lock-in and profit that Microsoft was accused of antitrust violations. From that point on, any serious technologist wanted to build the next big platform. Others that came after include Google’s Chrome/Search/Web empire, its Android mobile operating system, and Apple’s supreme iOS. Meta’s social media platforms and Amazon’s AWS cloud business probably qualify. And Tesla’s business might be a platform, too. (More not that later).”Dreamy” businessesPlatforms share similar attributes that make them massively expensive and time-consuming to build, but way more profitable and long-lasting than any other businesses on earth.Billions of people and businesses rely on platforms. As they are used more, they become more useful and more valuable. They are almost impossible to compete with once they are up and running. And as Apple shows, there are endless ways to squeeze more money from platforms, even if antitrust regulators shut down bits of them.Matthew Ball, a venture capitalist and former Amazon executive, called platforms “dreamy” businesses in an insightful blog last year.He also pointed out that if you don’t own a big platform, your life kinda sucks. Zuckerberg has the scars to prove it. One flick of Apple’s privacy wrist and about $10 billion of Meta revenue disappeared. This scared the crap out of other tech companies. Google pays Apple about $20 billion a year to keep the iOS giant distributing its search engine. Not fun. The biggest betsThis is why big tech companies are investing 100s of billions of dollars to find the next big platforms. They might fail, and that will be an epic waste of money, like the world has never seen before. But, if they succeed, the profit gusher will be so much bigger, and competitors will bow down — as most companies do today to the iOS god. “Though the accumulated losses are terrifying, they’re nevertheless dwarfed the potential profits, as well as the security that comes from owning your own end-to-end platform versus relying on another,” Ball wrote.To give you a taste of the size of this phenomenon, here are recent research and development budgets of some Big Tech companies. This is just for one year:Google: $40 billionMeta: $35 billionApple: $30 billionMicrosoft: $27 billionA new AI platformGoogle will continue investing huge amounts to become the leading AI provider in the western world. Foundation models are the bedrock of this emerging platform. There are layers of tooling and other software on top, followed new applications, such as chatbots, copilots and who knows what else. All users and developers will pay to access what Google hopes will be the new AI platform. Microsoft will continue to pile money into its own AI platform ambitions. too. And it will ensure OpenAI gets all the cash and cloud support it needs to beat Google. Zuckerberg wants to win this too, and is willing to spend billions on GPUs and anything else required.What are other big platforms of the future? The metaverse, no matter how ridiculed it has been so far, could be a contender. Computers used to be huge, expensive and only accessible in a locked room inside a big university. You fed special pieces of paper into them to make them work. Then they were on your desk and you typed information into them. Then they were in your pocket and on your wrist, and we’re speaking to them now. Is it such a stretch to put them on your face and see the world through them? This is why Apple will continue to spend billions of dollars over decades to ensure that its Vision Pro, and endless future versions, will be the dominant ecosystem in an augmented-reality future. And it’s why Zuckerberg will continue to spend heavily on Meta’s Oculus devices and platform. They may both be spectacularly wrong. But if one of them is right, untold riches await. The EV platform raceThis is also why Apple will continue to spend billions of dollars developing an EV, even if it comes out 15 years or 20 years after Tesla started selling these vehicles. I recently test drove Tesla Model 3 EVs with Business Insider’s auto reporter Nora Naughton. She was irked how her iPhone didn’t connect seamlessly to Tesla’s operating system in the car. This is a classic tech platform battle, now playing out inside EVs. When billions of people drive many hours a week, Apple wants to own the device that they interact with. That’s the car interface. Big Tech is all about winning our attention and being the first “funnel” that sends us out into the world. That is incredibly lucrative. Inside Tesla cars, it’s Tesla that provides this funnel. There is no way Elon Musk will ever let Apple Carplay work inside his vehicles. Not a chance. That’s giving valuable digital real estate to Apple.Again, this is partly why Apple still toils to build its own EV. Just like with its installed base of more than 1 billion iPhones, Macs, Watches and other gadgets, the company wants to add EVs to this device roster. Giving up is expensive, tooThis brings an interesting lens to what Musk has been doing at Tesla. He started a price war. That is cutting into profits, but it also supports sales at a time when EV demand is wavering. Meanwhile, most US automakers can’t keep up. Even at higher prices, they lost money making EVs. Now, they are slashing EV investments and cutting production. If EVs are one of the next big platforms, this cautious approach just plays into Musk’s hands. He wants as many Tesla cars on the road as possible — an installed base, just like Apple has built. Notably, even though EV demand weakened in the fourth quarter, Tesla’s US EV market share rose slightly. Now, building cars is not as profitable as making iPhones, or churning out new versions of Windows or Android operating systems. Software is especially profitable. However, Tesla has worked out a way to make EVs more efficiently than many rivals, and it has built an EV supply chain that Apple probably envies. GM and Ford, in contrast, seem to be giving up right now. If you’re not in the platform-chasing game, many investors will discount you as a…
