THE AI REVOLUTION CANNOT BE STOPPED BECAUSE IT HAS HAPPENED BEFORE
By Michael and James Hall
Authors of the popular “The Sword of Damocles: Our Nuclear Age,” now on Audible, Kindle and Amazon books.
Whenever a breakthrough technology transforms society, investors become obsessed with picking the next winner. Today, that focus is artificial intelligence. Every week brings fresh debates over valuations, market bubbles, chip shortages, data center capacity, and job market impacts—along with questions about whether current spending and progress are sustainable. Yet, like past industrial revolutions, this momentum will not be stopped: history has already shown us how the story unfolds.
Art and poetry by James Hall.
History offers a powerful lesson. During every major industrial transformation, many companies disappeared, prices fluctuated wildly, and nations experienced wars, economic crises, and political upheaval. Yet the underlying revolution continued.
The story of Ford Motor Company illustrates this principle
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Ford and the Automobile Revolution
When Henry Ford founded the Ford Motor Company in 1903, automobiles were little more than a curiosity. Most Americans still relied on horses, wagons, and railroads for transportation.
Yet as the automobile gained acceptance, entire industries adapted.
Wagon makers learned to build cars, blacksmiths became mechanics, and new industries emerged to support roads, fuel production, manufacturing, insurance, and finance. Employment expanded, productivity increased, and prosperity grew.
The following decades brought extraordinary challenges. The world endured two devastating world wars, the Great Depression, economic upheavals, and profound social change.
Yet despite these disruptions, the automobile revolution continued.
Not every automobile company survived. In fact, hundreds of manufacturers disappeared, were acquired, or faded into history. Investors who tried to identify every future winner often failed. However, those who recognized the larger trend, that society was becoming increasingly dependent on the automobile, were ultimately proven right.
The lesson is enduring: great technological revolutions do not advance in a straight line. Companies rise and fall, markets boom and crash, and nations face crises. Yet when a technology fundamentally improves the way people live and work, the revolution often outlasts the challenges surrounding it.
Ford survived. Many competitors did not. But the automobile revolution transformed the world regardless.
The Same Pattern Repeats Throughout History
Consider the railroad and steam age.
As railroads and steam power spread, entire industries were transformed. Canal operators became rail investors, horse-drawn freight carriers evolved into railway companies, and entirely new industries emerged to support steel production, coal mining, locomotive manufacturing, telegraph networks, and large-scale commerce. Employment expanded, productivity surged, and prosperity grew.
Yet the railroad revolution also endured devastating financial crashes throughout the nineteenth century.
The electric power revolution generated speculative booms and painful busts.
The aviation industry weathered bankruptcies, wars, and economic downturns.
The internet fueled one of the largest market bubbles in history during the late 1990s.
Despite these setbacks, no one today questions whether railroads, electricity, aviation, or the internet fundamentally changed civilization.
The lesson is simple:
Revolutionary technologies often experience temporary setbacks on the path to permanent adoption.
Along the way, they make people, businesses, and societies more productive.
These innovations don't diminish human potential, they amplify it.
These inventions and revolutions empower us!
Why AI Appears Different
Artificial intelligence is not merely another software trend.
It is a productivity technology.
Just as electricity amplified human muscle power, AI amplifies human cognitive power.
Businesses are already using AI to write software, analyze data, create content, improve customer service, accelerate research, design products, and enhance medical analysis.
The long-term economic incentives are enormous.
The AI revolution is not just a new invention but a watershed for civilization.
Thus even if investors become temporarily pessimistic, companies will continue searching for ways to lower costs and improve productivity.
That incentive will not disappear.
The Bubble Question
Despite that many observers ask whether AI is a bubble.
History suggests the answer may be both yes and no.
The railroad industry experienced bubbles.
The automobile industry experienced bubbles.
The internet experienced a spectacular bubble.
Yet all three transformed society.
A bubble can exist within a genuine revolution.
The existence of excessive speculation does not invalidate the underlying technological change.
The more important challenge for investors is recognizing the difference between: a revolutionary technology, and a company temporarily benefiting from enthusiasm.
Those are not always the same thing.
Who Are the "Fords" of the AI Age?
No one knows with certainty.
History suggests the eventual winners are often not the most glamorous companies.
Many investors during the California Gold Rush became wealthy not by finding gold but by selling shovels.
Similarly, the most durable AI businesses may be those providing essential infrastructure.
Potential examples include:
Semiconductor manufacturers
Memory suppliers
Cloud computing providers
Data center operators
Electrical infrastructure companies
Power generation companies
These organizations may benefit regardless of which AI application ultimately dominates.
James decided to invest in AI in January of this year and has done exceptionally well, seeing 40 to 60 percent gains depending on the stock. Yet, you likely haven't heard of most of his top performers—they aren't the household names like the Fords or Googles of the past. They are the logistic stocks that make the world run as in all revolutions.
The Geopolitical Challenge
Every industrial revolution unfolds amid political uncertainty.
Ford survived two world wars.
Railroads expanded despite national conflicts.
The internet flourished through decades of geopolitical tension.
Today, investors worry about issues such as:
U.S.-China competition
Taiwan
North Korea
Trade restrictions
Semiconductor supply chains
These risks are real and warrant careful attention, particularly regarding the strategic threats of China and North Korea.
However, history suggests that technological progress rarely follows a straight line. Instead, it advances through periods of both cooperation and conflict.
Political events may alter which companies lead, but they rarely stop the broader technological trend.
Looking INTO THE CRISTAL BALL
Nobody can predict even the next six months of the stock market.
Nobody can identify every future winner.
What history teaches is something much more important.
The automobile revolution survived wars, depressions, inflation, and countless bankruptcies.
The electrical revolution survived financial panics.
The internet survived the dot-com crash.
Likewise, artificial intelligence will almost certainly experience bubbles, corrections, disappointments, and geopolitical challenges.
Because AI is already a foundational technology, the revolution itself will continue long after today's market debates have been forgotten.
The greatest investment question may not be whether AI survives.
It may be whether we can identify the indispensable infrastructure businesses that will still be standing fifty or one hundred years from now, just as Ford remains standing more than a century after the automobile first transformed the world.
Afterall, the more things change, the more they stay the same.