In October 2025, a portion of the Nobel Prize in Economic Sciences went to Joel Moykr, an economic historian who taught at Northwestern University. His work on the Industrial Revolution as an economic phenomenon, specifically between 1700 and 1900 in Europe, became a foundational reading in graduate courses in economic history. At UC Davis, where I went to graduate school in economics and studied economic history, coursework and readings focused on how industrial revolutions emerged from invention, innovation and empire, including the United States shifting from a colonial territory to a world economic power.
Artificial Intelligence (AI) is not a new technology for planet Earth. Still, the amount of funding that has made its way to the future is at historic levels, raising concerns and creating unspeakable fortunes. There is a lot of talk, primarily because it fills headlines, that we are on the precipice of a fourth industrial revolution. A common theme across the previous three revolutions is the mechanization of human tasks. This started with steam engines, then electric engines, and now (maybe) synthetic brain power. In all cases, the threat of labor displacement en masse has served as a specter, casting a shadow over the positive aspects of new technologies.
Like other “new” technologies, we are in a wave of innovation on previous technologies (think ChatGPT 5.1 had a 1.0 version in the past, hence innovation, not invention). Economists and historians are beginning to look for parallels and clues to the past amid political, economic and social risks and the ways AI may evolve in the 2020s.
For the North Bay, especially anyone who was in Sonoma or Marin counties between 1995 and 2001, “Telecom Valley” became our regional answer to Silicon Valley in terms of local businesses that provided employees and residents with equity market exposure to a wild, rocket ride that began to move closer to earth in 2000 and then in 2001 in earnest. For regional economic development, the infrastructure to support ideation, innovation (or, in rare cases, invention) and adaptation radiating from the local area is difficult to maintain in suburban and rural areas. The financial reward for ideation, innovation and adaptation comes from equity markets. The Standard & Poor’s 500 (S&P 500), a classic market index, has increased approximately 14% in 2025 (as of Dec. 15, 2025) and 49% since January 2022. This includes sharp cuts after Silicon Valley’s collapse in March 2023 and after tariffs were increased generally in April 2025.
Railroads provided infrastructure and transportation options that remain with us today. Throughout the latter half of the 19th century, when railroads expanded quickly in Europe and the United States, they transformed commerce and travel. Over time, corporate ownership consolidated, and the original entrepreneurship faded. Computers, the internet and wireless technologies (like roadways when automobiles were invented and then generally adopted as transportation) brought competition and complementarity to current infrastructure, redistributing revenues from the original technologies over time at a much faster pace. That consolidation ended with sharp equity-market corrections.
With economic history as a guide, will AI become the next railroad, telecom boom or something different? We have to expect the end game from the intellectual property owner’s perspective (think stockholder in companies where patented AI is owned) is to maximize labor replacement and thus place AI and associated assets so that consumer markets remain intact. Still, profits are maximized from the intellectual property. This is what is socially concerning about the unregulated movement of this (or any) technology, and how equity market bets on the full fruit of AI technology play out versus consumer markets and societal stability. A trilemma is forming.
