Imagine you’re Rip Van Winkle, Washington Irving’s famous fictional character who takes the longest nap ever.

You close your eyes, fall asleep… and don’t wake up until September 2036.

When you finally open your eyes, what kind of world would you discover?

Source: ChatGPT

Are there stunning medical breakthroughs, robots simplifying everyone’s to-do lists, and awe-inspiring technological advancements that make the world a better place? Or are tech companies ruling the world, with truth practically impossible to determine and hordes of hopeless, unemployed people fighting over basic resources?

I’m not trying to be melodramatic for the sake of a good article intro. I have five children and four grandchildren now. So I’m very invested in what the future holds.

My grandkids – none of them older than four – may never remember a time when artificial intelligence (AI) didn’t dominate. Interacting with robots might be as normal for them in 10 years as using smartphones is today.

So all this talk about whether we should stop building data centers and rein in AI models is incredibly consequential. And we need to be properly prepared for what may come.

AI just crossed another frontier

AI can accomplish amazing things, as evidenced by the Navier-Stokes equations. (Which, don’t worry, I’d never heard of either until now). They detail the movement of fluids and gases in everything from aircraft construction to weather predictions to blood flow.

The problem is, these usually predictable forms can potentially misbehave, causing chaos in the process. And that’s not something Navier-Stokes has ever been able to account for in nearly 90 years.

The globally respected Clay Mathematics Institute even offered a million-dollar cash prize in 2000 for whoever could solve it. But no one could.

Not until OpenAI set around 10,000 AI agents on the job – and succeeded!

Actual mathematicians and scientists still need to “peer” review the results, mind you. However, the Clay Mathematics Institute itself said it’s “apparently been settled.” And I sincerely doubt it issued that praise on a whim.

In which case, what else could AI solve given a bit more time?

It’s a valid question, so I understand why President Trump recently dismissed apocalyptic warnings about AI destroying humanity. He’s deeply concerned about America surrendering its technological and economic leadership to China in this regard.

And that’s understandable, too.

But the other side of the argument isn’t unfounded either. And it’s made quite the waves in the last two weeks, starting with Jacob Coxon.

He resigned from Anthropic (around six weeks into the job) after working at OpenAI for about three years. According to him, both companies’ unstrained AI exploration is “gambling with our lives.”

Even Evan Hubinger, Anthropic’s alignment science lead, believes the chances of AI destroying humankind in the next decade are greater than 10%. Moreover, he admits that the very superintelligence his company is exploring has no proven controls in place.

Truth be told, nobody knows where we’re headed, whether good or bad. But if I had to bet, I’d say AI isn’t taking us toward either paradise or Armageddon.

It seems much more likely that while it continues to become enormously powerful, it will remain imperfect, expensive, and dependent on human input. That’s why I expect a somewhat mixed bag of results down the road…

1. Every worker will have an AI partner

By 2036, there’s a good chance most knowledge-based workers will operate with an AI agent – if not a team of them – to help them do what they need to do, whether that be:

  • Researching

  • Analyzing

  • Negotiating

  • Writing software

  • Reviewing contracts

  • Creating presentations

  • Monitoring investments.

A single person will therefore be able to run an entire department in some cases. So, yes, some jobs will disappear.

But I think many more will be redesigned. In fact, the kind of common sense, moral judgement, accountability, and relational capabilities humans display might grow more valuable as a result of AI going mainstream.

As such, the real battle for usefulness won’t be between people and machines. It will be between people who know how to unleash AI’s full capabilities and those who don’t.

2. Medicine will become predictive and personal

We could easily see AI’s greatest benefits in the field of healthcare. Doctors are already gaining brilliant new insights into genetics, imaging, and disease detection.

Moreover, new medicines could go through digital testing instead of expensive clinical trials. We could even see individualized treatments rather than medicines designed for statistical averages.

The resulting healthcare plans could become much more manageable at home, in outpatient facilities, or through specialized research centers.

This wouldn’t eliminate hospitals altogether, mind you. But it would take pressure off the current strain on staffing.

Perhaps by a lot.

3. Robots will move AI into the physical world

The first stage of generative AI has primarily occurred onscreen.

The next stage, however, will involve hands, wheels, cameras, and sensors.

Robots are already being utilized in warehouses, e-commerce centers, agriculture, and medicine – though in limited form by a limited amount of businesses. But by 2036, they could easily expand all the way into your home.

As for autonomous vehicles (AVs), expect them to reshape logistics, reduce the need for parking facilities, and add value to city streets that are impossible to park on. Though I do have to add a qualifier here…

AV adoption might take longer than 10 years since the physical world can be so messy. As I acknowledged last month, there are permits to obtain, safety standards to meet, insurance costs to pay, and all the other expenditures those issues come with.

That’s just one of the reasons I’m bullish on Uber (UBER).

4. Electricity will become the new digital currency

Going back to data centers specifically, we all know that AI “lives” in the cloud. However, the cloud lives in buildings.

Buildings that consume immense amounts of electricity.

The same goes for every AI-enabled product, from autonomous agents to robotics to digital simulations. The greater their capabilities, the greater their power needs.

That’s why 2036 will likely be full of energy storage, fiber networks, natural gas infrastructures, nuclear facilities, substations, transmission corridors, and water systems. And the closer commercial real estate – or even residential real estate – is to such assets, the more valuable they’ll be.

This includes data centers themselves. While I see these properties remaining relevant (and profitable) for years to come, energy-oriented companies will probably do even better.

5. Authenticity will command a premium

Much of these transformations are welcome.

This one might not be so much, but it still needs to be said…

AI is already frighteningly good at creating images, ideas, videos, and recordings that come across as accurate. So in a decade, I imagine it will be next to impossible to distinguish between artificial presentations and the real deal.

Yet we all crave the truth on some level. It’s part of who we are and what we’re made for.

That’s why I see people paying more for it going forward. Trusted information and respected brands will become premium products. And live entertainment, personal service, and destination experiences will increase in value as well.

When Rip Van Winkle awakens

If I suddenly found myself in 2036, I suspect I’d find a complicated world with both positive progress and a lot left to be desired.

Then again, isn’t that reality? There’s usually a give and take in this life. It’s never a consistent paradise; and it’s rarely a lasting hellhole.

There are, however, ways we can encourage the good and deter the bad. And AI is no exception to that rule.

On the one hand, President Trump is right. We can’t casually surrender the race to China. That would facilitate a world I’m sure we don’t want to live in.

On the other hand, Coxon and Hubinger are right, too. We need guardrails. AI unleashed would lead down different paths we’d rather not travel.

Ultimately, we should be less interested in how much wealth this disruptive technology creates… and more focused on how it will improve actual lives. If AI can make the world a better place for our children and grandchildren, then it will be well worth the effort.

Let’s work together to make that so.

Happy SWAN investing,

Brad Thomas
Editor, Wide Moat Daily