Episode #21: History on Repeat: Lessons from Electricity to AI

Stewart Squared

Welcome to Stewart Squared podcast with the two Stewart Alsops! Today, we’re cruising along the Pacific Coast Highway with the ocean on one side and mountains on the other, diving into transformative moments in technology and society. From the electrification of homes in the late 19th century to the rise of AI and its parallels with those early revolutions, we explore how history shapes our understanding of disruptive innovation. Along the way, we reflect on Hollywood's transactional culture versus Silicon Valley’s long-term commitments, and how data, intuition, and creativity drive change in these realms.

Check out this GPT we trained on the conversation!

Timestamps

00:00 Introduction to Stuart Squared Podcast

00:31 The Electrification Era: 1920s and Beyond

03:05 AI and the Demand for Power

04:21 Nuclear Power: Past, Present, and Future

04:45 The Evolution of Barcodes and E-commerce

09:08 Navigating Technological Misadventures

14:45 The Role of Journalism in Venture Capital

17:45 The Fourth Estate and Its Influence

20:02 Comparing Revolutions: French vs. American

21:38 Political Shifts: From FDR to Reagan

23:20 The Rise of the New Left and Intersectionality

24:28 Trump's America: A New Political Era

24:58 The Reagan Era and Its Impact

28:31 The Evolution of Los Angeles

31:16 Hollywood vs. Silicon Valley: A Clash of Cultures

34:07 The Streaming Revolution: Data vs. Intuition

37:44 AI and the Future of Creativity

39:41 Concluding Thoughts and Arrival in Santa Monica

Key Insights

1. The Electrification Parallel to AI: The transition to widespread electricity in the late 19th and early 20th centuries is mirrored by today’s integration of AI into society. Both revolutions required substantial infrastructure development—be it physical power lines or computational resources—and sparked transformative changes in how people lived and worked. The conversation highlighted how AI, often dubbed the "electrification of knowledge," is similarly reshaping industries with significant energy demands, akin to those of early electrical systems.
2. Hollywood vs. Silicon Valley: Hollywood's transactional, short-term focus on individual projects contrasts starkly with Silicon Valley's long-term, integrated approach to innovation. The episode explored how the entertainment industry's emphasis on deal-making and immediate returns is fundamentally different from the tech world’s necessity for enduring relationships, systemic trust, and multi-year product cycles.
3. The Role of Data and Intuition in Creativity: While companies like Netflix leverage vast datasets to inform decision-making, the episode underscored the irreplaceable role of human intuition in creativity. Successful projects like Squid Game exemplify that even with advanced analytics, judgment and risk-taking remain critical in identifying groundbreaking content that resonates globally.
4. Contrarian Investment Strategies: Forecasting technological success often requires going against consensus, as discussed through the lens of venture capital investments. Notable investors like John Doerr achieved success by betting on unconventional opportunities, such as early Amazon and Google, highlighting the importance of recognizing overlooked potential in emerging markets.
5. Shifting Political and Economic Orders: The episode traced shifts in political alignments from FDR’s New Deal era to Reagan’s conservatism and the current nationalist movements. These shifts are tied to broader societal changes, including the decline of trust in established institutions and the emergence of new political and economic orders, reflecting an ongoing evolution in public sentiment and governance.
6. Streaming’s Impact on Entertainment Economics: The rise of streaming has fundamentally altered Hollywood’s financial models. Instead of a prolonged revenue stream through traditional theatrical releases and syndication, content now generates income upfront, disrupting the traditional "long tail" and challenging creators to adapt to new ways of monetizing intellectual property.
7. The Evolution of Trust in Technology: The discussion also addressed historical resistance to innovations like barcodes and credit card usage online, drawing parallels to current hesitations around AI and nuclear power. Building public trust in transformative technologies often takes decades, with initial resistance giving way to eventual acceptance as societal norms and regulatory frameworks evolve.