By: Sean Thomas / The Telegraph
Translation: Telegrafi.com

We can all see what's happening. The investment frenzy is crazy. Capital is pouring into startups at a dizzying pace, as speculators convince themselves that this groundbreaking technology will reshape commerce, communication, and industry.

New companies are announced every week, even as market valuations are becoming increasingly disconnected from economic reality. Meanwhile, the battle for talent is fierce: experienced engineers command outrageous salaries and young people in their twenties are lured by tycoons and ministers.

I'm obviously talking - like everyone else - about the artificial intelligence [AI] boom. Or not? Wrong. What I'm describing is what happened at the beginning of the railway age in the UK in the 40s.

At first, as with AI, money flowed in and investment skyrocketed. The railway craze of the 1840s led to the passage of some 270 railway acts - in 1846 alone, authorising some 9,500 miles of new line [about 15,500 kilometres]. But by the early 1850s, the bubble burst spectacularly. The London-Portsmouth direct railway collapsed without a single mile of track being laid.

The London and York Railway, despite grandiose plans, collapsed before it could complete its route. Countless smaller companies disappeared into the Victorian haze, leaving shareholders with nothing.

And yet, out of this mess emerged the companies that would define the era: the Great Western Railway [Great Western Railway] built by Brunel, survived and flourished. The London and North Western Railway [London and North Western Railway] grew into the largest joint-stock company in the world. And then railroads spread across the globe, connecting the coasts of the United States and Canada, uniting India, making it possible to travel from Vladivostok to Vienna in days, not months. And humanity changed.

The analogy is not surprising. Why? Because it has been the case with almost every major technological advance in human history. In fact, this sequence—massive investment followed by extreme volatility and then a terrifying (for some) collapse—is so predictable that it almost suggests that something truly transformative is happening.

Want more convincing facts? Here’s a rough description of what happened when electricity came along in the 80s and 90s. Initially, eager investors rushed to finance electric lighting companies. In America alone, over six thousand small electric companies were created within a few years. The shares of electric companies became Wall Street stars.

And then the bubble burst, and the shock was merciless. The “war of currents” between [Thomas] Edison’s DC and [George] Westinghouse’s AC saw dozens of smaller companies crushed by the giants. By the turn of the century, only a few survivors - General Electric, Westinghouse, Siemens - dominated the scene. The corpses of failures littered the economic battlefield.

All of this, no doubt, was painful. But electricity? It transformed cities, homes, transportation, industry - and led us to the refrigerator, radio, television, computers and the Internet. As for the bubbles, bursts or consequences, they were quite good for humanity.

I could easily go on, because the same thing happened with the advent of the internet (remember the crisis? dot com?), with the advent of the internal combustion engine and, perhaps, with the invention of the printing press. In fact, I sometimes wonder if people have always been this way with crazy new technologies since the beginning of time. For example, I like to imagine what the atmosphere was like when fire came. Were there “fire skeptics” in the “Neolithic Gazette” criticizing this tasteless new fad?

I can imagine what their articles might have been like. “The initial enthusiasm cooled after the Rubbish Stick Corporation [Rubbing Sticks Together Inc.] gave it a mammoth forty-fork rating. “Analysts complain that the business model relies too much on sparks and sensations.” “'Yes, it's warm,' admits one critic, 'but only locally and only if you sit very close to it.'”

The bottom line? It’s important to distinguish between the temporary event – ​​the bubble – and the epochal change: technology. Many commentators confuse the two and therefore think that all of AI is overhyped nonsense. A few days ago I saw a journalist claiming that AI, the technology that we were promised would do everything, “can’t actually do anything.”

Really? “It can’t do anything”? Try telling that to translators: AI has swallowed up their industry, because it has mastered all languages. And AI will only expand further — even as we humans continue, forever, to blow bubbles. /Telegraph/
Cult+Cult