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Investing for the AI transition – Educating Silicon

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At this point it seems basically certain that AI will be a major economic transition. The only real question is how far it goes and how fast. In a previous essay I talked through four scenarios for what the coming few years might look like. In this essay I want to think through how to invest against those scenarios. Scenario 1 (“damp squib”) is one where AI remains mostly a toy with no meaningful economic impact. The investment consequences are pretty simple – avoid AI investments, or if you’re really brave, short the bubble. However, this scenario seems more unlikely to me by the day. Scenario 2 (“a typical cycle”) is one where AI is comparable in impact to many other recent tech waves, for example the rise of smartphones. If AI was frozen around current capability levels, I think this is what we’d experience. The investment strategy here is broadly in line with the playbook of the last few decades. In this post I want to focus on Scenario 3 (“Jetsons world”), where AI is capable of d

At this point it seems basically certain that AI will be a major economic transition. The only real question is how far it goes and how fast. In a previous essay I talked through four scenarios for what the coming few years might look like. In this essay I want to think through how to invest against those scenarios. Scenario 1 (“damp squib” ) is one where AI remains mostly a toy with no meaningful economic impact. The investment consequences are pretty simple – avoid AI investments, or if you’re really brave, short the bubble. However, this scenario seems more unlikely to me by the day.

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