We’re living through a historic transformation;Every few generations, there’s a leap so massive it redefines how we live, work, and build wealth:
Steam engines ignited the Industrial Revolution.AndElectricity powered the modern world.
Computers and the Internet unlocked the Information Age;Today, AI is that leap.
And it’s accelerating faster than anything that came before it.Miicrosoft's Satya Nadella says AI Performance is doubling every six months.
Apple, Meta, Nvidia are has invested hundreds of billions into AI infrastructure.
Microsoft just processed 100 trillion tokens from AI workloads this quarter alone which is precisely half of the past month.
Another surge moment has just started;Which is of AI agents, now automating software development, marketing, data analysis, infrastructure design,and tasks once handled only by highly skilled professionals.
Take it from ServiceNow, one of the top-performing enterprise medium in the world:They just reported a 16x improvement in lead-to-sale conversion using AI agents.
86% of previously manual tasks are now fully automated;At Orica, a ServiceNow client, incident resolution times dropped by 1.5 DAYS, and non-human IT support rose from 18% to 94% thanks to AI agents which is a quiet business revolution that's underway.
The front edge of a productivity boom that could rival or surpass any in history. This means above trend economic growth. Meaningful real wage gains. And a needed rise in quality of life.
Remember, just months ago there were questions of whether the huge capex plans from this group would go forward, after the DeepSeek disruption of late January. They potentially answered the questions with $300 billion worth of capex planned for 2025.
Meta just raised its planned capex by 10%. And Apple just committed to spend $500 billion over four years. And Satya Nadella, head of Microsoft, gave several signals this week that the technology revolution is accelerating;He said they are bringing on Data Center Capacity (and executing the plan to spend $80 billion in capex this year) but customer demand for those computing resources is outstripping their supply. And that has a lot to do with this: The anticipated language model capabilities are (in his words) "doubling in performance every six months."
And clearly there has been a significant breakthrough in the previous month, as he said Microsoft processed 100 trillion tokens in the quarter, half of that in the past month alone. That AI workload processing is up five-fold from a year ago. This explosive growth is all about AI agents automating tasks, from designing infrastructure, building and executing marketing plans to developing relevant and competent functional software. With that, we should expect a productivity explosion ahead.And hot productivity tends to be very good for economic growth.
That's good news. Because it means we can see real wage growth; the kind that restores purchasing power and quality of life (catching up to the reset in the level of prices). And importantly, productivity driven wage gains are non-inflationary because rising wages are offset by rising output.
Stepping back from the media and geopolitical noise, this is the an Action picture of progressive gains in the early stages of an industrial revolution.
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