Big Oil Faded. Will Big Tech?

Published: Sun, 30 Aug 2020 by Rad

Less than a decade ago, Exxon Mobil was the most valuable company in the world. Now, it's being kicked out of the Dow Jones industrial average after nearly a century of inclusion in the stock index.

First, as wild as it feels to have a handful of American technology superpowers rule the economy and the stock market and influence world events, oil superpowers like Exxon were in a similar position not very long ago.

While it's hard to imagine Big Tech losing relevance, most people didn't predict that demand for fossil fuels would start to wane, until it did. That's part of the sweeping changes that ushered out the era of Big Oil and started the Big Tech age. Today all of Exxon is worth less than Jeff Bezos.

Exxon's star faded because the world changed, and it didn't. The question is whether what happened to Exxon is a warning about the potential vulnerability of today's tech superpowers.

"The company at its peak helped steer U.S. foreign policy, supported sometimes authoritarian leaders in oil-rich countries and shaped people's views on important issues like climate change to suit its interests."

Private Empire: Exxon Mobil and American Power, book

Apple wouldn't be the company it is today without its savvy diplomatic skills in the United States and China to advance its own business interests. Facebook is so influential that it's a tool used both against and by authoritarian governments. Google shapes how government regulators and the public think about antitrust laws. It's an imperfect comparison, but big tech companies are private empires in some of the same ways as the old Exxon.

One fundamental difference is that Big Oil's fate relies on demand for a product that the companies can't control. The tech industry doesn't seem to have this essential vulnerability.

It was said before that many tech executives live in fear of their companies dying or becoming irrelevant. They're not thinking about Exxon but about a history of technology in which evolutionary changes have ruined seemingly invincible industry leaders. But while it's possible to imagine some of the individual tech powers losing relevance — maybe — it's much harder to imagine the tech industry overall growing less potent or essential.

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