Racing horses are bred to win. That is their one purpose. Every owner, trainer and jockey treats each horse as if it’s the next Triple Crown champion, and every bookie wants to choose that horse just before it succeeds. But they can’t ever really know. That’s why it’s called gambling.
The same is true for investing in businesses. In a new and growing industry, no one has a proven record of success, of delivering returns. They are mostly if not completely funded by venture capital rather than revenue.
The AI industry is young and growing fast. At one time, so was the railroad business. People who invested in companies that succeeded became wealthy; those who picked the wrong (iron) horse went bust.
In a recent Substack post, economist Paul Krugman wrote:
“The huge capital expenditures we’ve been seeing by AI and AI-related companies were only justifiable if (a) AI delivers big economic payoffs — which even pathbreaking technologies don’t always do — and (b) first-movers are able to capture a large share of those returns, rather than find them competed away by second-movers offering products that are cheaper and almost as good.”
As a leader, in authority or technical expertise, you will influence decisions about investment in AI. How do you pick a horse in this race? Tell us about it.