“The greatest shortcoming of the human race is our inability to understand the exponential function.” – Albert Bartlett

Wealth and prosperity grow from the bottom up.

It starts with the choices of individuals striving to make the most of what they have daily.

Some choices are small, like hustling on a side gig to earn extra cash for that vacation they’ve put off. Other choices lead to breakthrough ideas that redefine how we live our lives. Or, like you, those choices include making trades and investments that work for you.

Ultimately, the more freedom we exercise in our choices, the greater the likelihood that prosperity triumphs.

The freedom to act in our best interests creates a powerful incentive to succeed. It lies at the heart of discovery. It propels each subsequent wave of innovation higher than the previous.

As the circle of technology expands its reach, so too does the perimeter of what’s possible.

It’s along that expanding perimeter of possibility where actual fortunes get built, provided you come to grips with the fact that innovation inevitably leads to disruption.

Consider innovation and disruption two sides of the same coin.

But AI has set innovation on a trajectory we’ve never experienced before. The rate of change will boggle the human mind.

Prepare for a shock. An exponential rate of change that will drive massive disruption in its wake.

And trying to wrap my head around what that will look like reminds me of a conversation I had with my dad decades ago.

Prepare to Be Shocked

I remember clearly the first time I thought hard about exponential change.

My dad was reading Future Shock – a book written in 1970 about the impact too much change in too short a time has on individual psychology.

We talked about ideas in the book. And the notion that technology could advance faster than our minds could keep pace fascinated me. As I played with the concept, I imagined what it would be like waking up every day to a world as different from the day before as a day in 1980 seemed from the 1920s.

One hundred years of progress becomes ten years of progress, which becomes one year, etc.

There are limits to this for sure. We humans are the ultimate consumers of whatever AI delivers (unless it begins to ignore us and act for its own sake). But barring a self-aware, self-interested AI, our ability to adapt to change will cap the pace.

It has been over 40-years since my dad planted Future Shock idea in my head. We’ve gone from rotary phones to making calls from your watch and we took it all in stride.

But the pace of improvement with AI models tells me that Future Shock has arrived.

We just can’t see it yet.

However, we can see who is doing the disrupting and who is getting disrupted. At least some of them.

Nvidia (NASDAQ: NVDA) is clearly a disruptor. Oracle (NYSE: ORCL) has potential. I show you why in these Capital InFocus reports on Nvidia and Oracle.

However, Intel (NASDAQ: INTC) has been so disrupted, that it dug its own grave trying to keep up. And I’ll have a Capital InFocus report on why that’s the case for you soon.

So, keep an eye out for that report and get comfortable with the innovation and disruption headed our way.

Think Free. Be Free.

Don Yocham, CFA

Managing Editor of The Capital List