I have a confession: I have a crush on President Dwight “Ike” Eisenhower.
I spent one hot summer in Abilene, Kansas. It was while I was researching my 2014 book, All the Presidents’ Bankers: The Hidden Alliances that Drive American Power.
For weeks, I dug through original documents at the Eisenhower Presidential Library. That’s how I got a sense of who Eisenhower was – and why his vision resonates today.
It might surprise you to hear this, but without Eisenhower, we probably wouldn’t have the modern internet.
That’s because in 1958, he formed something called the Advanced Research Projects Agency (ARPA).
ARPA brought together some of the smartest people in America. And one of its projects was to build a large-scale computer network.
That network was called ARPANET. But it didn’t really hit its stride until 1974.
Why? Because up until that point, computers on the ARPANET were basically all speaking different languages.
But in 1974, scientists figured out a way for computers to all “talk” to each other. And so, the internet was born.
However, it took another two decades for investors to get rich on the internet trend. That’s when the dot-com bubble sent the NASDAQ soaring by nearly 500% in the 1990s.
And right now, we’re at a similar “wake up” moment for the next big tech megatrend.
And that megatrend is artificial intelligence (AI).
The concept of AI has been around for ages. In fact, my dad helped develop the building blocks for AI starting in the 1970s when he worked at IBM.
Just like the internet, it’s taken decades for AI to hit the mainstream. But now, it’s happening.
And as we learned from the internet, the biggest gains are made by those who spot the trend at the right time – not too early, not too late.
That’s the profit window that’s opened today with AI. Let me explain…
More Than Just a Wall Street Buzzword
Yes, AI is a buzzword on Wall Street.
We’ve seen companies like NVIDIA and others score record stock levels because of their connection to the concept of AI.
But the government spending about to be unleashed will catapult even more AI-oriented companies to the forefront.
The U.S. set aside $1.6 billion for AI in fiscal year 2023, according to Bloomberg Government data. And that number is expected to increase in the future.
Another Bloomberg AI report noted that the market for generative AI is set to explode with more programs like Google’s Bard and OpenAI’s ChatGPT.
This market alone could be worth $1.3 trillion over the next 10 years. That’s up from just $40 billion in 2022 – a 3,150% increase.
These two trends show us that in the near-term, government spending on AI is set to boom…
And the private sector spending on AI is set to explode, with over $1 trillion in revenue over the next decade.
AI for the Future
I was in Washington just before the White House issued its new AI executive order. And the buzz around AI was already building in Congress.
During my closed-door meetings, I learned that AI and harnessing the power of self-learning is attracting both accelerated interest – and concern.
For some legislators, it means keeping up with China’s AI prowess. For others, national security for infrastructure, energy, and communications systems is key.
Several congressional leaders from growing industrial and tech hub states, such as Illinois and Ohio, have business interests in utilizing AI to gain a corporate and competitive edge in their districts.
As the old adage goes, “Politics is local.”
And AI is no longer just the subject of a couple of science fiction books. It is real and impacting congressional members and their constituents.
Yes, AI has enormous upside and could help the economy – but only if the right systems are in place.
On both sides of the aisle, every leader and staffer I spoke with saw AI’s potential. As well as its rising impact as an area where cybersecurity matters are key.
As I learned from my meeting at Representative Robin Kelly’s (IL) office, AI is critical for the Internet of Things (IoT). It also comes into play for grid and energy efficiency.
Representative Joyce Beatty’s (OH) staffer noted AI will impact everything from computers to the agricultural sector.
And Representative Cathy McMorris Rodgers’ (WA) staff underscored the need for AI to protect national security data and large-scale infrastructure.
I mention these three congressional offices because they represent a spectrum of regions, constituents, and local economies.
While all are very different, AI will impact each one in unique ways.
More AI Means More Power
It was also clear that Congress understands AI will only go as far as we can support it.
At the most basic level, that means having the electric power and infrastructure to support AI’s demands on the grid.
By 2027, AI tech servers could require 85-134 terawatt hours per year, on average. In other words, it will need the equivalent amount of energy to fully power 6 million to over 9 million homes for an entire year.
That means AI will use as much energy as entire countries do today.
As an example, last year, data centers that power all computers used about 1-1.3% of the world’s electricity. That includes Amazon’s cloud and Google’s search engine.
So you can understand the massive demand that AI will be merging with.
AI will also be using the data and energy from those servers to complete its tasks. Think of it as a system that can only continue to enhance and self-learn when more and more inputs are given.
In other words, AI is only as good as the data it’s given.
Without the right energy transmitted to keep up with demands and the right data to feed into the system, AI is like a supercharged Ferrari with no fuel.
That’s why focusing not just on AI technology itself but on the cybersecurity systems in place and the energy that powers them is pivotal. Those two elements will be the keys to fast and how far AI will go.
Your Move
The sheer volume of data gathering and insights that AI could assemble is beyond anything governments or even the brightest science and technology minds have ever achieved.
Securing and protecting that information and its use will be crucial. So what does it mean for you?
We are at the second pitch of the first inning with AI. It’s just like the internet when it was first incubated in the 1950s by the government.
It will touch almost every part of the economy. And that means it will boost both established and more under-the-radar companies.
In fact, we’re looking at what could be one of the most lucrative moneymaking trends we’ll see over the next 12 to 24 months.
That’s why on Tuesday, December 12 at 8 p.m. ET, I’m holding an urgent market briefing called Wall Street and Washington’s Unfair AI Investment Advantage Exposed.
At the briefing, I’ll show you a sector primed for explosive growth. It’s part of a rising AI trend that’s being fast-tracked by the White House, the FDA, and Silicon Valley.
A year from now, everyone will be wishing they took action. I don’t want you to be left behind.
So, mark your calendar for Tuesday, December 12. And I’ll see you then.
Regards,
Nomi Prins
Editor, Inside Wall Street with Nomi Prins