AI as the New Industrial Revolution

The influence of artificial intelligence (AI) is now widely acknowledged, with some even calling it a “cognitive revolution”. Yet amid the hype and speculation, the real trajectory of AI often seems obscured.

Clearly, AI is not just a new technology; it is the engine of a new industrial revolution.

In 1712, the steam engine launched the first industrial revolution, ushering in an era of machine-driven productivity. From the steam engine to the first modern factory system in 1779, 67 years passed. By contrast, the graphics processing unit (GPU), arguably AI’s equivalent of the steam engine, was introduced in 1999, and within just 17 years, by 2016, a fully integrated AI system had emerged. This time, the transformation is unfolding far faster. AI, as a “soft engine”, is reshaping work, production, and services at an unprecedented pace.

Unlike the physical constraints of the past, i.e., steel, steam, or railroads, AI is built on bits. Its digital nature allows for instant, global replication. A single AI tool can scale from prototype to millions of users overnight. This is the fundamental difference: the new industrial revolution is not driven by hardware, but by cognition.

General-purpose AI models function like synthetic neurons, capable of integrating into any process, across any sector. Just as entrepreneurs once applied steam engines to revolutionize industries, today’s AI innovators are laying the groundwork for entirely new economic structures. Whoever becomes the Rockefellers and Carnegies of this era is likely to emerge from the companies redefining the limits of AI.

Some view this industrial revolution as laying out a grand blueprint, with estimates placing its impact at around $10 trillion. Yet from the standpoint of today’s AI-driven transformation, that may well be a conservative figure. AI is already permeating nearly every facet of production and service delivery. In fact, the U.S. service industry alone may surpass that scale, highlighting just how vast the true economic potential could be.

AI can upend traditional service models that rely on linear input from highly paid professionals, and has the potential to radically expand access while slashing costs. A legal AI might deliver contract reviews to small businesses at a fraction of today’s prices. An AI diagnostic tool could bring high-quality healthcare insights to underserved regions. This shift will not just reshape service delivery, it will actually reshape entire markets.

In manufacturing, the pace will be just as fast. AI-powered systems will replace manual labor in many areas, allowing robots to perform complex tasks with logic and adaptability. Unlike human workers, AI does not need rest, and its capacity can grow exponentially. By 2030, AI is expected to contribute $13 trillion to global GDP, according to McKinsey Global Institute.

This revolution also threatens to disrupt capital markets. Traditional service firms—especially law and accounting—rarely appear in the S&P 500 due to their partnership structures. Their growth is tied to human headcount, limiting scalability. AI changes that. With automation, a single AI system could empower thousands of professionals, enabling exponential growth and opening the door for new AI-driven firms to go public. Over time, the makeup of major stock indexes may shift dramatically. Crucially, AI is not limited to software or chatbots. It is increasingly shaping the physical world, optimizing manufacturing, accelerating R&D, and even participating in physical production.

AI is unmistakably the “soft engine” powering the next industrial era. Its success will not depend on technology alone, but on how fast we, as individuals and societies, can learn, adapt, and reinvent ourselves for this new age.

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