Business & strategy laws · law 016
Moore's Law
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
what it means
The number of transistors on a chip doubles about every two years — shorthand for computing getting exponentially cheaper and more powerful.
How Moore's Law works
Moore's law is why a phone today out-computes a 1990s supercomputer. For businesses, it means tasks that are expensive to automate today may be cheap in a few years.
The strategic lesson is to plan for falling technology costs: build business models that assume compute, storage, and bandwidth keep getting cheaper.
where it comes from
Intel co-founder Gordon Moore predicted in 1965 that component counts would double every year, revising it in 1975 to every two years. The trend held for decades, though it has slowed.
Moore's Law examples in business
Storage
Cloud storage that once cost a fortune now costs pennies, making photo- and video-heavy apps viable.
Automation
Inventory tracking that needed expensive hardware is now possible with a cheap phone and a barcode app.
Product planning
A hardware startup designs for the chip price it expects at launch, not today's price.
How to apply it
- 1List tasks in your business that are expensive mainly because of technology cost.
- 2Re-check their automation cost every year.
- 3Avoid long, locked-in tech contracts priced at today's costs.
- 4Design products assuming better, cheaper tech in two to three years.
common misreading
It is an observation about one industry's progress, not a law of nature, and the classic doubling has slowed.
ask yourself
Which expensive manual task in your business would be cheap to automate if tech cost halved?
Frequently asked questions
What is Moore's Law?
The number of transistors on a chip doubles about every two years — shorthand for computing getting exponentially cheaper and more powerful. Moore's law is why a phone today out-computes a 1990s supercomputer. For businesses, it means tasks that are expensive to automate today may be cheap in a few years.
Who came up with Moore's Law?
Intel co-founder Gordon Moore predicted in 1965 that component counts would double every year, revising it in 1975 to every two years. The trend held for decades, though it has slowed.
How do you apply Moore's Law in business?
1. List tasks in your business that are expensive mainly because of technology cost. 2. Re-check their automation cost every year. 3. Avoid long, locked-in tech contracts priced at today's costs. 4. Design products assuming better, cheaper tech in two to three years.
What is a common misunderstanding of Moore's Law?
It is an observation about one industry's progress, not a law of nature, and the classic doubling has slowed.