The AI Revolution: How to Invest

**Raoul Pal** (0:00)
So, what is a singularity when I talk about singularity? It really is when the breakdown of physics, mathematics, our understanding of everything falls apart, and it's been driven by one single force. That's the exponential curve of intelligence. As we become no longer the apex intelligence on planet Earth or elsewhere, everything has to change and everything has to realign. We've got a massive amount of abundance that's to come. Yes, there are roadblocks. Yes, we don't have enough of this, we don't have enough of that, but overall, what we're going to do is go exponential on the efficiencies creating food, goods, services. Nobody wants to do backbreaking work. And soon, in the next five years, ten years, we might need to at all. But we'll be able to do things we find more enjoyable. Hi, I'm Raoul Pal, and welcome to my show The Journeyman. The Journeyman is where we take that journey to that nexus of understanding between macro, crypto, and the exponential age of technology. And today, I want to revisit a topic because it's incredibly important. It's the thing that's on everybody's mind, the economic singularity.
You see, we all spend our time working in the world where we have our job, we have our pension, we are compounding our lives slowly, trying to do our best to get ahead. But then suddenly, we're all starting to see what I've been talking about for a while that everything is going to change. And those things that you hold dear may not be the things that lead you into the future. And that's quite hard to sit on for a while. At first, it brings a lot of fear.
But the reality is there's opportunity too. And I'm not going to say that this is going to be an easy thing.

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**Raoul Pal** (2:53)
So what is a singularity when I talk about singularity? It really is when the breakdown of kind of physics, mathematics, our understanding of everything falls apart. And it's been driven by one single force, and that's the exponential curve of intelligence.
As we become no longer the apex intelligence on planet Earth or elsewhere, everything has to change and everything has to realign. And that's a really big thing. It becomes a black hole for the economy. It becomes a black hole for everything. And I say this often, which is like, I can't see past 20 I used to say 2030 to 2032 I can't see past it. I think 2030 is now spot on. I think there's enough evidence of intelligence going exponential and exponential curves going everywhere to make me understand that we really have four years left.
And it becomes impossible to forecast beyond that.
Here firstly is a chart that I built of intelligence per unit of energy, which is how I think everything works. It's part of my Universal Code thesis. And you can see from the chart, it used to be ruled by Laws-Moore essentially. Moore's Law basically was the compounding of intelligence via chips.
But suddenly, out of the chips, we've produced intelligence and the curve now goes to a double exponential. This is why everything is moving so fast. It's because we're seeing Reed's Law for the first time in any observable mechanism. It doesn't even happen in nature. Reed's Law is the double exponential, Metcalfe's Law squared, and that's where this is going.
So when you get that, what you realize is the economy is going to have to completely realign itself, because intelligence is now scaling faster than humans. I've talked about this in other videos. When you put energy through the silicon substrate, it's a million times faster than putting it through the biological substrate of carbon. That's what we're doing now. We're putting fucking electricity through sand and producing super intelligence. In the next year, these AI models are going to be smarter than anyone. Sure, there'll always be an outlier of a human, an outlier of a human that is smarter than any AI. Because humans are messy compute, they do interesting things, they come up with interesting ideas. But on a basic level, it's more than that.