Hello Swampians. My respondent in the Swamp this week is our San Francisco bureau chief and technology guru Richard Waters, so I’ll focus on tech topics today, in part so that you all can enjoy his perspective.

Conventional market wisdom holds that whatever goes up one decade, must come down the next. Writer and investor Ruchir Sharma has been writing for some time that because the market darlings of the last decade were large technology companies in the US, the future will favour just the opposite. This would point to all things small, foreign, and non-tech related.

One could argue that the beginning of last week’s US government antitrust case against Google marked the turning of the tide here. I disagree with New York Times’ writer Steve Lohr that this case lacks the cultural impact of the Microsoft battle a quarter century ago. In fact, I’d say it’s far more important, because it will be a deep dive on the power of surveillance capitalism and the way in which default settings and the network effect can be used to nudge consumer behaviours in a certain direction. This is the business model for nearly every firm these days, not just the Big Tech behemoths.

Which gets me to my first question: what counts as technology today? Certainly, if you buy into the idea that market narratives change roughly every decade, you would be wary of buying into the Nasdaq and you might also want to sell the S&P 500, given that its value is so disproportionately weighted towards Big Tech.

But you might also argue that we are about to enter a new golden age of technological innovation and investment. The difference is that this time around, it won’t be about consumers, but industry. Three-quarters of the world’s $100tn in gross domestic product is made up of traditional legacy industries — such as manufacturing, transportation, logistics and healthcare — that have yet to be deeply transformed by technology. 

That’s now changing. The desire of most companies to increase resilience in their supply chains, coupled with the digitisation of industry, has led to a boom in areas like additive manufacturing and materials science, but also sensors, robotics, artificial intelligence and logistics software. Some of the lead companies are in Europe and Asia, but more of them are in the US.

Still, this boom is happening at a time when interest rates are higher, funding availability for new companies is tighter, and the markets in general are less forgiving (a topic that Richard tackled recently through the lens of the Instacart IPO). Meanwhile, much of the technology that’s hot right now depends on a re-industrialisation in parts of the developed world which could yet be undermined by Chinese currency devaluation, a flood of cheap imports (witness the EU’s current EV dumping investigation against China) and a return to a world in which price is all that matters.

I’m still betting that both tech and US stocks have room to run, in part because I think de-risking will actually speed up in the years ahead. But I also think that the next big tech start-up stories are likely to come from outside Silicon Valley, which became too focused on me-too consumer technology in recent years. Richard, would folks in the Bay Area agree with me on that, and are the Silicon Valley business types you speak to long or short on their own sector at the moment?

• Paul Krugman has a smart and digestible analysis of the current inflation debate, and in particular the important new paper from Mike Konczal at the Roosevelt Institute, looking at why the inflation and employment relationship appears to be shifting.

• I was fascinated and horrified by the report about Chinese AI being used to spread lies about things like, for example, the Maui wildfires: See here Axios reporting from Microsoft sources about the broader problems of AI and disinformation. And more NYT revelations of how China manipulates Facebook and Twitter (now X) here.

• I’d have to agree with my colleague Alan Beattie who writes that the term “Global South” is both limited and patronising.

• And finally, if you are thinking of reading the new Walter Isaacson book on Elon Musk, you can check out my FT review here.

That’s a lot of big questions, Rana. How long do you have? 

You suggest an investment fad can only last a decade. Well we’re already more than two decades into Wall Street’s love affair with Big Tech and it shows no signs of ending. The secular shift to digital may speed up or slow down at times — and things definitely slowed when interest rates rose and Covid-19 restrictions eased — but I’d argue it still has a long way to run.

And we’re only at the start of the artificial intelligence era. A lot changes when computers understand language — not just in terms of what they can do, but because they become so much easier to use. So no, I wouldn’t expect the next decade to be different, even if the market’s periodic tech “corrections” become more pronounced. But you didn’t really expect me to say anything else, did you? (And I assume your question about whether there are any tech people shorting tech was asked in a spirit of irony? Silicon Valley’s answer to any problem is always more tech, as you well know.)

But that doesn’t mean the same companies will dominate. You’ve always articulated the anxieties about today’s dominant tech companies really well: It’s hard to think that such big, powerful and unaccountable companies have another period of unconstrained growth ahead of them, without some greater effort to rein them in. If nothing else, you’d expect their sheer size to slow them down. Upheavals in tech, like the rise of AI, also normally bring a change in industry leadership, though in this case companies like Google have strong technical advantages.

On your main point — is our definition of tech going to change and who is going to benefit in the next cycle — I think you put your finger on the right questions. I agree that industries like manufacturing, logistics and healthcare stand to see considerable change. But I think it starts with digital technology, and some of the names we already know well: The cloud platforms of Amazon, Microsoft and Google. All those materials scientists and supply chain experts you talk about will depend on this digital infrastructure — and on the AI that runs in the cloud — to bring about the next waves of innovation.

Hopefully that doesn’t make it another “winner takes all” moment for Silicon Valley. As digital understanding spreads, you would hope that people closer to the problem will be the ones to see how this new tech infrastructure can be put to best use. This most definitely has to happen outside Silicon Valley, as you suggest. The tech industry has been far too concentrated in terms of wealth and power. For political reasons, if nothing else, the next cycle needs to spread much more widely.

Next time you’re in California I’ll buy you a kombucha and we can compare notes.

We’d love to hear from you. You can email the team on swampnotes@ft.com, contact Rana on rana.foroohar@ft.com and Richard on richard.waters@ft.com, and follow them on X at @RanaForoohar and @RichardWaters. We may feature an excerpt of your response in the next newsletter