The Dot-Com Boom Is Beating the AI Boom 3 to 1

Dear Reader,

Today I wanted to answer a big question.

Which technology boom is better — AI or dot-com?

We finally have some early results.

And they are surprising.

How Economists Measure This

The way economists answer this question is with something called total factor productivity.

It measures how much output increases after a major investment in technology.

Think of it this way.

You own a car factory and you make 100 cars a day.

You make a big investment in AI.

Now how many more cars can you make with the same costs?

That's total factor productivity.

The higher the number, the more productive the technology made you.

The Early Results

Bloomberg published a comparison that I think every investor needs to understand.

The dot-com boom officially started when Netscape went public in 1994.

In the three years after that, total factor productivity grew 7.5%.

Using our car factory example — you went from making 100 cars a day to 107.5 cars a day.

Now here's the AI comparison.

In the three years since ChatGPT launched, total factor productivity has grown 2.45%.

Using the same example — you went from 100 cars to 102.5 cars a day.

Dot-com is beating AI in productivity by a factor of 3 to 1.

Three years into each boom, the dot-com era was three times more productive than the AI era.

And here's what makes that even more striking.

We are investing far more money in AI infrastructure, far faster than we ever did during the dot-com boom.

The denominator is bigger.

The numerator barely moved.

So Is the AI Boom a Dud?

Not so fast.

This is actually a well-known economic phenomenon called the Solow Paradox.

Named after economist Robert Solow, who said something famous in the 1980s during the personal computer wave.

He said: there are computers everywhere except in the productivity statistics.

Companies were installing computers everywhere.

Everyone knew it was making them more productive.

But it wasn't showing up in the numbers.

Same thing is happening right now with AI.

You can feel it making you more productive.

A buddy of mine just ran an entire commercial lease through ChatGPT — got a point by point comparison of two options, figured out how to negotiate, saved himself hours with a lawyer.

That's real productivity.

As a business owner, I can tell you we move faster and at lower cost than we did two years ago.

But it's not showing up in the statistics yet.

Why?

A few reasons.

First, mismeasurement.

Technologies this new are genuinely hard to measure accurately.

We may not have the right tools yet to capture what AI is actually doing to output.

Second, time lags.

Major technological shifts require years — sometimes decades — for companies to redesign their workflows and fully train their people.

We're still in the heavy training phase.

Third — and this is the one I think explains it most — the dot-com boom didn't happen in isolation.

The 1990s internet explosion collided perfectly with the 1980s personal computer wave.

Companies had spent a decade building computer infrastructure everywhere.

Then the internet arrived and lit it on fire.

Those two things colliding is what produced that 7.5% figure.

And it makes me wonder.

What happens in ten years when AI collides with the robotics wave that's just beginning?

When the infrastructure being built right now — the chips, the data centers, the AI systems — combines with robots moving through the physical world?

That collision could produce something we can't even measure yet.

But there’s one major problem that could stop the entire AI productivity boom in its tracks.

Energy.

The AI boom needs two things to keep it running.

Chips. And power.

The chip story has been told a thousand times.

The power story is just getting started.

One company has been building the infrastructure to solve America's energy problem for sixty years — and the AI boom just made them the most important company nobody has heard of.

Get the full report HERE>>>

Before Wall Street piles in.

The Bottom Line

The early call is in.

Dot-com is winning the productivity race by 3 to 1.

But the race is young.

And history says these things take longer to show up than anyone expects — and then arrive all at once.

Have a wonderful weekend.

I'll see you Monday.

“The Buck Stops Here,”