In the early 1990s, a “new” technology called the internet began making inroads into businesses, universities, and homes across the world. At first dismissed as a fad or niche interest, the internet steadily gained steam until it transformed how we live, work, communicate, entertain ourselves, and conduct business. Today, we are in the midst of a similar technological sea change with the rapid development of artificial intelligence (AI). Just as the internet upended industry after industry in the 90s, AI is now poised to disrupt sector after sector. The parallels between the internet's emergence and AI's current trajectory are striking.
In the early days of the internet, many failed to grasp its immense potential. Skeptics argued that the internet was merely a repository of information without much practical use or staying power. Statements were made that look silly today – “not enough people will shop online instead of going to the mall” or “nothing will replace the daily newspaper for news”. Others doubted the internet's security and ability to be widely commercialized and monetized.
We're seeing echoes of those dismissive attitudes today toward AI. While AI has existed as a concept since the 1950s, recent breakthroughs in machine learning, neural networks, and computing power have kicked off a renaissance. However, there is still skepticism about whether AI can be usefully applied in the real world outside of niche areas. Concerns about AI's safety and ethics also mirror the internet's early doubters who worried about lack of security and fraud prevention.
In the 1990s, very few anticipated how rapidly the internet would take off and become a ubiquitous part of daily life. Its growth charted an exponential curve as new applications, websites, internet-based businesses and infrastructure rolled out. We may look back at the late 2010s as the "beginning of the beginning" for AI as it continues an exponential ascent.
Now, machine learning capabilities are doubling every six months. AI models are getting dramatically more capable and intelligent each year. Venture capital funding for AI startups has skyrocketed. We are likely in the very early stages of an AI growth explosion mirroring the one the internet underwent. AI assistants that can engage in freeform dialogue and perform open-ended tasks seem like a novelty now but may become as humdrum and ever-present as email and web browsers in a decade.
Beyond its direct impacts, the internet acted as an accelerant for other transformative technologies and societal shifts. The sharing economy enabled by the internet facilitated the rise of companies like Netflix, Uber and Airbnb that disrupted entire industries. Social media (for better or worse) connected numerous internet-enabled devices like smartphones and tablets to make our personal and professional worlds increasingly blended and difficult to separate.
AI is already serving as a similar accelerant and catalyst for change across multiple sectors. AI-enabled innovations are supercharging developments in fields like self-driving cars, synthetic biology, renewable energy, brain-computer interfaces, "digital twins" for manufacturing and climate change simulation and quantum computing. New societal and ethical questions around AI sentience, bias, and privacy are pushing conversations on online regulation and data governance.
The internet and AI revolutions cuts both ways in terms of impact. On one hand, the internet democratized access to information, gave a voice to billions, and created new economic opportunities. AI models that can engage in dialogue, answer questions, and assist with tasks have the potential to act as a great equalizer and force-multiplier for human knowledge and capabilities.
Businesses that fail to incorporate AI into their operations and workforce development could fall behind. Workers will need access to AI education and retraining to stay employable. Governments may face increasing pressure to develop AI governance frameworks and policies around data privacy, antitrust and mitigating societal risks. Families may lean on AI tutors for personalized education or AI health coaches for customized wellness advice and monitoring.
What does this mean for your investments? Primarily, it means to keep an open mind about what's next. Like companies you may remember from the 90s there will likely be companies on the forefront of A.I. that will become the dominant companies of the future, but many, many more may fail. Also like the 90s, it may pay to think about which companies stand to gain the most from the implementation of AI vs. just the creators of the components and infrastructure of AI.
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Read more articles by Lance R Hoenig