Forget Tomorrow… The AI Era Started Yesterday
As we step into the AI era, it's crucial to understand how this evolution will shape our near future on personal, economic, and societal levels. While nothing is for certain in this world and predicting the future is very tricky indeed (as Yogi Berra sagely noted), here are three key conclusions:
AI Adoption is Inevitable
Even if you're not directly using AI today, you're already using it indirectly. I am going to venture a guess that, in the next six months (maybe a year if you fight it), you will be using AI directly and not want to live without it the next day (ok, maybe not, but close enough). Think of it like when people first experienced electricity in their homes, reliable refrigeration, or online shopping— once you've had a taste, there's no going back. There is no barrier hard enough to stop adoption because we will want it. I mean, we absolutely hate our smartphones and still, we can't put them down for the length of a meal with our family. Whether it's good or bad, the same is happening with AI.
AI: The Energy Cookie Monster
AI's capabilities come with a significant energy cost. As we continue to deploy AI technologies, our electricity consumption will rise... a lot. Think of the AI machine as an insatiable Cookie Monster, devouring vast amounts of energy to function. This shift will have profound implications for our energy infrastructure and anything that resembles sustainability efforts. I recently discussed this on a podcast with AI pro Alec Crawford and sustainability pro Olivia Albrecht (Here), where we explored the broader impacts of AI on our energy consumption and what it means for the future.
It’s Back to Square One for the Internet as a Business
AI has all the attributes to disrupt the business side of internet as we know it. Traditional search engines like Google have long been the gateway to other "private" pages on the web. Those sites sell you things or are in effect small billboard companies that show you ads while you’re there. For reference, online ads are somewhere in the neighborhood of a half trillion dollar spend per year globally. With AI becoming the ultimate search engine and synthesizer of the internet, this pathways are changing. How do you think Wikipedia's traffic was affected when Google started displaying Wikipedia highlights directly in search results? Now, extend that impact across the entire internet. Websites that rely on foot traffic and revenue from advertising will need to rethink their strategies (and do it fast) in this new landscape. There are people with infinitely more specialized knowledge here, but it’s hard not to wonder how the business of the internet is going to shake out.
Now, for the avoidance of doubt (as my legally-trained friends would say), this is about AI as a thing, not AI as an investment theme. Please remember the rise of the internet. The technology changed our lives much more profoundly than we all thought back in 1999, and yet the rise of the internet created a multitude of ways to lose money along the way. They called it the Tech Bubble for a reason, and I remember it well. Start from the premise that not all of the obvious players today will be eventual winners, that prices matter, and that even for those eventual winners, the road to success may look a lot like a rollercoaster.