There is a common sentiment that no amount of money spent on chips, servers and human capital is too much. Why? Because the prize is unimaginably large.

The race is certainly on and the thinking is that developing artificial general intelligence (AGI) could offer insurmountable competitive advantages. The first mover in AGI could dominate various markets, from technology and finance to healthcare and education, due to the transformative capabilities of AGI.

I can certainly see the argument. In pharma alone, AGI could unlock dozens of life-changing medicines like a cure for cancer that would generate untold billions in profits. In finance, it could be a money-printing machine. AGI could optimize supply chains, predict market trends, personalize customer experiences, and automate customer service, thus revolutionizing the retail and e-commerce sectors.

Here is where the thinking starts to get muddled.

The expectation is that the winner(s) of the race will be able fully exploit the advantage, cornering markets and utterly dominating.

I can see that.

But I can also see many scenarios where the game is changed. The idea of patent technology was to foster innovation and reward inventors. If a server farm is inventing everything and all the rewards go to it, can we really tolerate that.

What if an AGI identifies all the undiscovered deposits of oil, gas and minerals worldwide and stakes every claim? Is that fair play? Will governments tolerate that? I’d wager they don’t and so it will go with pharma and any other invention with a government-backed moat.

The global patent system is far more fragile than investors realize and that’s my bet for the major black swan of the 2030s.