Every great technological revolution creates two things: new industries and new fortunes. It is the second of these that investors can sometimes overlook.
The industrial revolution created the Carnegies and the Rockefellers. The personal computer created a generation of technology entrepreneurs like Bill Gates and Steve Jobs. The internet produced extraordinary wealth for the founders, employees and early investors in companies such as Microsoft, Amazon and Google. More recently, Bitcoin and cryptocurrencies created another, younger cohort of millionaires.
Artificial intelligence could now do this on an even greater scale.
Much of the investment debate around AI understandably focuses on the direct beneficiaries: semiconductor manufacturers, data centres, electricity demand and the emerging generation of AI applications. But there is potentially another powerful economic force developing in parallel: what happens to all the wealth AI creates?
History suggests that new fortunes rarely remain idle. Silicon Valley itself demonstrates the effect. Successful technology companies didn’t simply enrich their founders. Early employees and investors became angel investors, venture capitalists and entrepreneurs themselves. Expertise, connections and capital were recycled into the next generation of companies. The result was a self-reinforcing ecosystem in which one generation of successful businesses helped finance the next.
AI could dramatically accelerate this process. Today, a relatively small collection of private AI and frontier-technology businesses has already created enormous amounts of wealth for founders, employees and early investors. As these companies mature, are acquired or eventually list on public markets, some of that wealth becomes liquid capital looking for a home.
The opportunities extend far beyond AI itself. Some newly wealthy entrepreneurs will become angel investors or establish venture funds. Others will start their own companies. In fact this is already happening. Capital will flow into property, private equity, infrastructure, art and public markets. Wealth managers and financial advisers will compete to manage newly created fortunes. Accountants, lawyers, private banks and specialist investment firms will benefit from servicing them.
And some capital will move into entirely different areas of innovation. We may already be seeing signs of this broadening: venture investors are increasingly directing money towards ambitious fields including energy, space, biotechnology and other capital-intensive technologies. The current AI boom will be seeding the next frontiers of technology and growth.
There is another historical precedent: philanthropy. Andrew Carnegie ultimately gave away the great majority of his fortune, funding libraries, universities and scientific institutions. John D. Rockefeller’s industrial fortune similarly helped establish institutions that transformed medical research, education and public health. Today’s technology billionaires could increasingly direct their wealth towards scientific research, climate technologies, healthcare, education and other philanthropic ventures.
This is why technological booms can have consequences lasting far beyond the original invention. Wealth creation produces capital formation, and capital formation produces further investment.
Investors therefore should consider the broader possibility of what an AI investment boom means. If AI generates trillions of dollars of new wealth over the coming decades, the opportunity will not simply be identifying which AI companies win, but thinking bigger about what that wealth creation means for the economy, business opportunities, and investment in the next generation of new technologies.
It will also be understanding where the winners spend, invest and ultimately give away their money.
This ‘second wave’ of capital is already helping to finance the next generation of entrepreneurs, industries and investment opportunities, some of which may have very little to do with artificial intelligence at all!
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