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The AI Revolution – A Repeat Of History?


The AI Revolution – A Repeat Of History?

Authored by Lance Roberts via RealInvestmentAdvice.com,

The artificial intelligence, or AI,” revolution is upon us. The financial media and headlines are abuzz with stories of generative “AI” and the subsequent “industrial revolution.”

Not surprisingly, attention has turned to AI with the launch of ChatGPT. The benefits are already apparent with the incorporation of AI into search engines. Even TikTok videos on ” making a million” using AI suggest why stocks associated with AI surged in recent months.

The Industrial Revolution is often considered a continuous event from the 1800s to the present. However, it is better understood as a series of paradigm shifts. The first, which began in the late 18th century, was propelled by mechanization and steam power. Mass production, electricity, and the assembly line fostered the second, which ran through the early 20th century. The third, which began post-WWII, introduced giant leaps in space exploration, computers, automation, and information technologies.

The fourth paradigm shift is occurring now. That revolution encompasses the advent of exponential technologies, from artificial intelligence and intelligent machines to robotics, blockchain, and virtual reality. Those technologies have already impacted how we live for over a decade.

These booms provided great opportunities as the innovations offered great investment opportunities to capitalize on the advances. Each phase led to stellar market returns that lasted a decade or more as investors chased emerging opportunities. (We will come back to those blue-shaded areas momentarily.)

We are experiencing another of these speculative “booms” as “Generative AI” grips investors’ imaginations. The chart below compares the 1999 “Dot.com/Internet Revolution” in the Nasdaq composite versus the 2023 “Generative AI” revolution.

If that analogy holds, it suggests

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