Neo, Kodak, & NVIDIA Walk into a bar...

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THEWHITEBOX

TLDR;

Welcome back! This week, we have news across a wide spectrum of topics, including NVIDIA’s record-setting milestone, GSI Technology’s historical stock surge, and the first-ever Western commercially available humanoid, Neo.

We’ll also take a look at a recipe that might solve continual learning, a giant step by two very hot AI startups, and consulting’s “Kodak moment”.

Enjoy!

FUNDING

Consulting’s Kodak Moment?

Public consulting companies are having one hell of a year, but not in a good way. With a severely flawed AI narrative and the US Government going berserk and canceling public contracts (particularly at Booz Allen, which is leading to layoffs), the markets are starting to price in the new reality of consulting: they are being devoured by AI.

This is something we have touched on multiple times in this newsletter: knowledge-based white-collar jobs are less valuable with AI, they just are. That is, if your job is to productionize knowledge —i.e., make knowledge reach your client faster —that’s precisely where AI delivers.

AI doesn’t shine in many enterprise areas these days, but this is certainly one (alongside software, as we discussed on Tuesday with Bain’s very impressive due diligence story).

TheWhiteBox’s takeaway:

I’m not the type of guy who will tell you ‘post-labor economics is coming’ or ‘AI will destroy all jobs’ because I don’t believe that at all. Time and time again, industrial revolutions don’t eliminate jobs; they transform them.

And one of the jobs about to be transformed is management consulting. Now, does that mean we won't need human consultants?

Of course not, but this industry has been on a steady decline in ‘provided value’ over the years. Once crucial for insights, it’s now a suit-up scam where fresh-out-of-college 20-year-olds from Ivy League schools tell Norah, a top executive with 30 years of experience in the field, what she needs to do.

Both counterparts know this is a scam, but these young management consultants can process a lot of information in a very short amount of time by being modern slaves (trust me, I was one), so you get the value from the exploitation that comes from hiring these guys, not because they have valuable things to say.

Thus, consulting has become a pay-for-hours game more than a pay-for-insights game.

And that’s the issue: AI makes the value of hours in knowledge-based tasks worth little because GPT-5 Pro will do a better job searching the Internet in ten minutes than Jamie from MIT working at McKinsey in a day.

Funnily enough, McKinsey consultants are the first to leverage AI to do the dirty work, but the client knows that, so the actual value the client perceives they are getting is much smaller because, well, “it’s all mostly ChatGPT wrapped in a Brioni suit”.

To put it another way, consultants aren’t being disrupted just because, but mainly because their value has long not been about providing industry value, but putting in endless hours for a low-paid job (low when you factor in…

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