Summary of "AI Will Not Make You Rich" by Jerry Neumann (September 2025) Overview This article examines the economic and investment implications of generative AI by comparing it to past technological revolutions, mainly the microprocessor revolution and shipping containerization. It argues that while AI is transformational, the opportunities for making significant wealth as an entrepreneur or investor may be limited. The disruption AI causes is predictable and primarily benefits consumers rather than creators. --- Key Points Technological Waves and Wealth Creation Revolutionary technologies create waves of innovative companies that generate new wealth. Examples include the railroad, electric power, the internal combustion engine, and the microprocessor. Some innovations, like shipping containerization, transformed society but produced limited direct wealth for innovators or investors. Two critical questions for investing in new technologies: How much value will this innovation create? Who will capture this value? Case Study: The Microprocessor The microprocessor, invented by Intel in 1971, was initially undervalued but initiated a massive technological wave. Early PCs were experimental and barely commercially viable. The PC market grew gradually through experimentation, lowering costs, and increasing adoption. Venture capital investment fueled the rise of many successful companies (e.g., Apple, Microsoft, Seagate). Startups thrived due to surprise and uncertainty which big incumbents feared. The ICT revolution involved several stages: Irruption (early experimentation) Frenzy (investment bubble) Synergy (maturation and rational growth) Maturity (dominance by entrenched companies) Case Study: Shipping Containerization A late-wave innovation (introduced in 1956 by SeaLand) that revolutionized global trade. Despite global impact, only a handful of people and companies made significant money. Containerization faced immediate competition, high capital expenditure, and regulatory resistance. Businesses and investors spread value thinly; profits accrued mostly to companies using the technology (e.g., IKEA, Walmart). Containerization exemplifies a technological innovation that arrived in the maturity phase of an economic wave. It lacked the surprise and uncertainty that foster big financial wins for innovators. AI’s Position in the Technological Wave Generative AI is revolutionary but likely in the evolutionary stage of the existing ICT wave. There is no broad surprise; the technology and implications are well understood. AI development is dominated by a few big model companies funded by the largest tech firms, limiting outsider innovation. Domain-specific AI models and application startups will likely be acquired or consolidated. Investment opportunities in AI models are mostly closed to new investors except for early movers. The app layer built atop AI models will often lose money overall due to capture by the model companies. Investment Recommendations Avoid investing "upstream" in AI model builders unless already established; chances of significant gains are low. Potential smaller opportunities exist in companies managing AI interfaces and data protection (e.g. Hugging Face). Infrastructure and chip providers (e.g., Nvidia, SambaNova) may not offer upside surprises and are already priced for growth. Best investment opportunities likely lie "downstream" in industries adopting AI to increase productivity and profit. Sectors include professional services, healthcare, education, financial services, and creative services. Companies that use cost savings from AI to increase profits rather than grow revenues will struggle. Enterprises focusing on high volume, low cost (like Walmart and IKEA with containerization) offer less risky bets. Broader Economic Impact Economists predict AI will increase global GDP by