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AI Supercycle: Hold on Tight

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Scott Andersen
Scott Andersen

What is a SuperCycle?

An economic supercycle is typically characterized by a sustained period of growth in gross domestic product, personal income, and employment.

For example, the period after the U.S. Civil War ended in 1865 and ushered in a movement toward the mass production of goods, which led to rapid advancements in machine technology and energy production and use.

"Like a huricane gathering energy over the ocean"

We can't see the storm growing in strength, but its happening, and pulling in energy both metaphorically and literally. When ChatGPT and StableDiffusion hit their public release, it started to become obvious that change was in the air. For the last two years, people on the edge have been utilizing AI to make their workdays and their passions more impactful.

The next 3 years.

We're going to see a growth unlike any that has been seen in history. This period will mark the dawn of widespread AI integration across all facets of business, leading to unparalleled efficiency and innovation. In the short term, we're witnessing the rapid democratization of technology, where powerful AI tools have become accessible to everyone, not just industry giants. This leveling of the playing field will spur a burst of entrepreneurial activity, as barriers to entry in various industries are significantly reduced, if not eliminated altogether.

Simultaneously, the job market will undergo a swift transformation. While AI and automation may displace certain roles, they will also create new opportunities in fields like AI supervision, data analysis, and digital ethics. Companies will scramble to upskill their workforce, and education systems will pivot towards tech-centric curriculums to prepare the next generation for the future of work.

Moreover, consumer expectations will evolve at an unprecedented pace. As people become accustomed to more personalized and efficient services, businesses will have to continuously innovate to meet these demands, driving a cycle of rapid product development and enhancement. This hyper-competitive environment will not only lead to better products and services but will also encourage sustainable practices as companies seek to differentiate themselves through ethical and environmental considerations.

Shrinking white collar service economy.

When your lawyer can now write a contract in a quarter of the time it took him to do it a year prior, he can effectively bill 1/4 of the time. That means he can serve more clients, but if he can't find them, his business contracts.

Rapid Product Innovation

Time to market for products will reduce significantly. The key here is that every step in the process will get easier with the aid of AI. A concept can be developed into a product in far less time than before. Consider our law example from above, if legal can review the product and promotional materials in 1/4 the time, that shortens the total product development time. Now consider that increase in efficiency across all disiplines involved.

Truncated Marketing Pipelines

With shorter pipelines, the market becomes more dynamic, fostering an environment of continuous innovation. Companies can rapidly iterate on products and marketing strategies, staying ahead of consumer trends and competitors. While this may offer numerous advantages, they also present challenges, such as the need for ongoing investment in AI technologies and potential issues around data privacy and ethical marketing practices. Companies that navigate these challenges effectively can seize significant opportunities in the evolving market landscape.

Record Corporate Profits

Wall street has been worried about an imminent downturn for the last half a decade. I think we're about to see a boom in the S&P like we've not seen before. Reduced labor costs will fuel a huge run up, and those who have capital in the markets now, will be comfortable in what will be an uncertain future for those without capital.

Hold on, it's going to be a wild ride!