We’ve been writing about the Data Supercycle, a prolonged period of technology-driven growth centered on data and AI. Family offices, as stewards of long-term capital, need to understand why this Data Supercycle is poised to redefine markets – and why it presents both outsized opportunity and urgent risk for investors.
What is the Data Supercycle? In simple terms, it’s the economic tsunami being driven by the explosion of data and artificial intelligence. Our research shows that 2014 was the inflection point when data science and machine learning took off exponentially. After a decade of laying groundwork in “big data” (2010–2014), the pace accelerated: machine learning techniques surged around 2016-2017, AI breakthroughs around 2019, and the trend hit the mainstream with 2022’s release of ChatGPT. This convergence of innovation has only grown since. We are now in the early stages of a decades-long wave that won’t peak for many years.
Supercycles aren’t your typical boom-bust; they persist for a generation. The Data Supercycle is expected to extend well over 30 years. It’s powered by three reinforcing drivers:
These forces combined mean faster market change and bigger opportunities than previous cycles. For example, in just the last decade, data-centric companies have dominated stock market gains. The tech-heavy NASDAQ index has dramatically outperformed the old-industrial DOW Jones index, largely thanks to value created by data-focused innovators. Many of today’s giants – think of cloud and AI leaders – didn’t exist or were small at the last cycle’s start, but they now dwarf legacy firms. Tellingly, 9 of the 10 largest companies on the NASDAQ today were venture capital-backed startups in their early days. This illustrates a core point of the Data Supercycle: tomorrow’s market leaders will emerge from today’s innovation hubs (startups, research labs, and venture-backed ventures), not from the ranks of yesterday’s blue chips.
For family offices, the Data Supercycle presents a double-edged sword of opportunity and risk. On one side, it’s a chance to capture outsized returns and even improve the human condition by backing technologies that solve big problems. Data and AI are not just creating companies with tremendous return potential; they are tackling urgent issues in health, climate, education, and beyond. Investors who fund this wave can achieve strong returns while making an impact – a combination very attractive to the family’s next generation of stewards.
On the other side, the Supercycle threatens old ways of doing business. Entire industries will be upended by data-driven disruptors. Established companies that fail to adapt could decline rapidly, eroding long-held wealth. This creates a legitimate capital preservation concern: if a family’s portfolio remains too tied to legacy assets, it risks being left behind by a historic shift. As one market analysis put it, “the illusion of corporate permanence is fading” – in plain terms, even the biggest companies aren’t safe if they don’t ride the new wave.
In the posts that follow, we will explore how responsible allocators (like family offices and funds of funds) can act decisively as this Supercycle gains momentum. From adjusting portfolio strategy to selecting the right investment partners, the key is to position capital ahead of the curve – where innovation is happening – rather than clinging to incumbency. History shows that when a supercycle hits, new winners emerge and old leaders often falter. By recognizing this early and increasing exposure to the engines of change (venture capital, accelerators, or direct startup investments for those with an investment team) family offices can harness the upside of the Data Supercycle while mitigating the downside of disruption.
Stay tuned as we delve into actionable steps: why increasing your venture allocations is prudent now, why early-stage bets offer unique advantages, and how partnering with nimble, specialized funds can maximize your odds of success in this once-in-a-generation tech upheaval. The Data Supercycle is here – the question is, are you prepared to ride it?