Lessons from the Past
I’m interested in making AI infrastructure cheaper and reliable, and I often think about how AI is similar to the Industrial Revolution. Electricity is a good comparison. It was a technology that changed everything, across every industry. Electricity improved manufacturing and daily life, but many of its benefits didn't show up in productivity measures. Some gains are hidden, and I think it's important to take note that this will be the same with AI.
Before electricity, factories relied on a centralised steam or water power. They rely on one central power source, using belt and pulleys snaking across the floor, causing breakdowns and safety risks. Factories had to be located near a water or coal-rich environment. Electrification changed this. Instead of building a whole new factory, which requires large investments, a business can just expand its existing factory. Growth shifted from large & discrete to small & incremental. Adoption of electric motors took decades. In 1900, almost no factories used electric motors. By 1910, 20% did. By 1920, half. By 1930, 80% had switched (Source: Byrne Hobart).
When Progress Looks Like Decline
Even then, some benefits weren’t obvious in the data. When factories switched from gas lamps to electric light, GDP went down because light got cheaper. GDP only counts money spent, not improvements in quality. Faster trains, fewer breakdowns, and night shifts made factories more productive, but those gains didn’t show up as “productivity growth.” Labour hours and train miles were counted as the same, despite productivity. The real benefits only became clear decades after the economy had time to reorganise around the new technology.
How Growth Changed the Market
Capital markets changed, too. Before electrification, growth required big investments, so companies issued bonds with predictable dividends. With a high dividend, you would not expect growth... Stocks were more uncertain. After electrification, growth became incremental. Companies could just reinvest profits to expand, so stocks became more lucrative.
What about AI
The narrative around AI shifts between singularity and doomsday, but I suspect the future will be in the middle. AI will probably make inequality worse — not just between countries, but within them. Globalisation narrowed the gap. AI may widen it. With falling birth rates and rising costs, that worries me. Angry young people with nothing to lose tend to start revolutions. But in the long run, I’m optimistic. AI will give individuals and small companies more leverage. It will make organisations leaner and create new kinds of work, especially creative work. Life will probably get more volatile, but also more rewarding, at least for those who can adapt.
The Broader Intellectual Question
That experience isn’t universal, though. It didn’t apply to me. But in places like Hong Kong, the pressure to compete is real—so real that one of my pregnant ex-colleagues had to sign up her unborn child for a nursery.
I’ve always had a quiet scepticism toward competition. I was pretty influenced by Rene Girard's mimetic theory, and pursuing original ideas has worked well for me. Sure, it makes you better at whatever you're competing in. But it often stifles creativity and independent thought. It works well for those on the right path—but not for those pursuing careers or relationships they are not fulfilled with. Education is not a substitute for thinking hard about what you want.