The massive investment in artificial intelligence infrastructure currently being made probably counts as the biggest and fastest rollout of a general purpose technology in history.
This year and next, Google, Amazon, Microsoft and Meta alone will spend a staggering $750bn on data centres to power their AI models, with Morgan Stanley forecasting total global spending in this area will reach $3tn by 2029. But jittery investors are increasingly asking: what returns will this immense capital outlay generate? History suggests they’re right to be nervous.
There are few better scholars to put AI in a historical perspective than Carlota Perez, author of Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. In her book, Perez identifies five great technological revolutions: the industrial revolution of the late 18th century; the steam, coal and railway revolution of the 1830s; the steel and heavy engineering revolution of the 1870s; the mass production age in the early 20th century; and the information technology revolution beginning in the 1970s. Perez sees AI as an extension of that fifth technological revolution.