Why investors won’t know what to make of AI for a while

For every Blockbuster, which the stockmarket started marking down two years before the video-rental darling’s revenues peaked in 2004, there is a BlackBerry or a Kodak, where investors failed to detect trouble until the business was on its last legs. Like economists and recessions, markets often anticipate a technological disruption that never happens. When Thomas Edison’s electric-lighting revolution began in the 1870s, it was the ChatGPT of its day. Smart money of the era piled into the new technology, backed by John Pierpont Morgan among other financiers, and out of gas companies, until then the providers of most artificial illumination. But gas did not become irrelevant. Investors realised that electric light would remain dearer than gas for years. Even as electric light fell in price in the following decades, gas firms found larger markets to pursue. In London, the Gas Light and Coke Company noted that in 1892 only 2% of its customers had gas cookers. By 1911 more than two-thirds did.