Today’s weekly market commentary examines the adoption of general-purpose technologies in the United States. These innovations, which change the way people live and work, have been introduced to the public over almost the last three centuries, and interesting trends have emerged more recently. Of course, in the spirit of our weekly update and for what is a large focus of our research, the piece centers in on the adoption of Artificial Intelligence (A.I.). More specifically, the piece looks at why A.I. has been adopted so quickly in the United States and ultimately what that might mean for investors.
The chart plots major innovations and the length of time it took for each innovation to gain mass adoption in the United States. More specifically, the chart plots how many years it took for each innovation to gain 50% penetration from the time it entered the U.S. market. What can be seen from the data, is that mass adoption has accelerated dramatically – regardless of the innovation – over time.
The chart begins with the entry of the stove in 1750 which then took 187 years for mass adoption. The steam ship took 108 years and the telephone took 66. Electric power, introduced in 1882 took 42 years for mass adoption and then cable TV took 40 years. The next set of general-purpose technologies is especially important for where we are today. The internet, introduced in 1989, took 14 years for mass adoption. Social media, introduced in 2004, took 9 years. The smart phone, introduced in 2007, took 6 years. And then finally, generative A.I., introduced in 2022, gained mass adoption by 2025. Just 3 years.
As it relates to generative A.I., an interesting observation that the piece makes is that, “generative A.I. appears to be the fastest-growing general-purpose technology on record. We believe this acceleration reflects A.I.’s ability to be deployed immediately through existing cloud and internet infrastructure. Unlike the internet’s early build out, which was constrained by limited infrastructure and slow adoption, A.I. benefits from a mature digital ecosystem, allowing anyone with an internet connection to use the technology.” – AOM 457
In terms of what this means for investors, as the piece states in the close, “rising AI adoption could position enablers like semiconductor manufacturers, power generators and database providers for long-term demand growth, while adopters in digital advertising and genetic testing may benefit from meaningful productivity gains over time.” – AOM 457
We would ask that you review the attached piece at your convenience and please let us know if you have any questions or if you would like to discuss it further. And as we always end this correspondence, please remember that regardless of current momentum and regardless of the key takeaways in this weekly perspective, we will continue to monitor and manage with a thoughtful approach based on your specific long-term objectives. Thank you for your continued confidence and look forward to speaking soon.
