In the past couple of years, AI has undoubtedly been a major topic of discussion in every aspect of our lives. Initially, everyone, including myself, thought AI was on the cusp of triggering the next Industrial Revolution. Is this new reality really on our doorstep, or is this just another drastic overreaction?
How Did We Get Here?
It has taken around 80 years of technological innovation to get where we are today in AI, but especially in recent years there has been a recent boom. Google, Meta, OpenAI, and many other tech companies seem to be coming out with new large language models every other week. The integration of AI into every crevice of every sector in the world is becoming more and more apparent.
This, seemingly, exponential growth has pumped billion and billions upon dollars into the US economy. One proposed example is a potential $600 billion U.S.–Saudi partnership focused on AI development. These billions are flowing into the U.S. economy on the hope that AI will be soon be regarded as the next Industrial Revolution.
Aside from the profound investment flowing into our economy due to AI, the Trump administration is taking on a role of anti-regulation regarding AI advancements. Laid out in America’s AI Action Plan released by The White House in July 2025, the administration plans to rapidly speed up innovation (through deregulation and massive investment), build AI infrastructure, and to lead in AI diplomacy and security. The recent advancements and steps to ensure that AI continues to grow shows that AI’s ubiquitous future may be just around the corner.
“Today, a new frontier of scientific discovery lies before us, defined by transformative technologies such as artificial intelligence… Breakthroughs in these fields have the potential to reshape the global balance of power, spark entirely new industries, and revolutionize the way we live and work.”
– Donald J. Trump
Is This What We Really Want?
Since the beginning of civilization, there has been much backlash following major technological innovation. Following the agricultural revolution, diets became less diverse, and disease began to spread more rapidly. Following writing and documentation, the centuries of rich oral traditions went extinct. And finally, following the Industrial Revolution, overcrowding and environmental damage grew a thousand-fold.
One consequence follows every single one of these: the growing elitist class. There is no doubt that each of these events brought about countless positives, but the group that benefited especially from each of these events was the one that was able to control it. With little to no regulation in the current administration, it gives the billionaires running these AI initiatives free reign. We very well may see the next generation of robber barons.
All of these innovations, that although brought about some downsides, eventually led to immense steps in human intelligence, lifespan, and opportunities. So, although the extreme critics of modernity might have been right about the many disadvantages to modern life, they always seem to leave out the incredible steps that result from it.
Is a Bubble Around the Corner?
The current wave of AI enthusiasm has driven markets to record highs, led by the so-called “Magnificent Seven”. NVIDIA, Microsoft, and others have become the new symbols of innovation, their stock prices soaring not just on profits, but on expectations. This kind of momentum, however, has eerie parallels to past speculative manias like the dot-com boom of the late 1990s when investors poured money into anything labeled “internet” without truly understanding its long-term value.
In the short term, AI has created a gold rush. Companies that can convincingly attach “AI” to their business models are seeing surges in valuation, regardless of actual profitability. Venture capital funding is flowing at unprecedented rates, and public investors are following suit. But as history has shown, hype doesn’t always equal sustainable growth. The question for investors isn’t whether AI will transform the economy, but rather which companies will survive the eventual correction.
For long-term investors, the key may lie in distinguishing AI enablers (those building the core technology and infrastructure, like semiconductor and cloud firms) from AI adopters (those merely using AI as a tool). Just as the internet’s ultimate winners weren’t the early dot-coms but companies that used the web effectively, the AI era’s true winners may emerge years from now.
Final Thoughts
The excitement around AI could very well mark the start of the next technological revolution, or the crest of an inflated bubble. Either way, its influence on the market is undeniable, and for investors, discernment may be the most valuable skill of all.
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