Azeem Azhar

is quite a tricky one to navigate because you've got these general purpose technologies, but they're rapidly improving.

And at the best of times, general purpose technologies have broad and diffuse effects across our economies.

And the speed that exponential ones bring makes it just much harder to understand what second and third order effects might be.

But

But AI is just one of those technologies, and it's certainly moving faster, both in terms of progress and applications, diffusion and uptake, than anything that I had studied previously.

But there are some common patterns.

So a couple of common patterns.

It'll open and expand markets, number one.

And number two, we don't necessarily know where the profits are going to lie, and that makes it hard for those who have to deploy capital.

So if we talk about the point about expanding markets, first of all, I read from an investment bank report a couple of weeks ago that, you know, for open AI to hit its revenue numbers, which are extremely ambitious, maybe a bit foolhardy, it would involve every iPhone user in the world needing to spend, I can't remember the number, 50, 60, $70 a year on these services.

And it's a, it's a shockingly stark calculation.

But it also doesn't make any sense when you think about new technologies that come into the market.

You don't even have to look at general purpose technologies to do that.

Because new technologies that are innovative come in to do something new by their definition.

So it's almost impossible to think about how big the market could become.

Now, the way investors think about this is through an idea of the total addressable market, the TAM, the maximum extent of a particular market.

You think about Google, when it went for its IPO back in 2004, it was five or six years old, they described in their IPO prospectus the TAM, the total addressable market they were serving.

And that TAM was $6 billion.

That is what they're serving.

Well, Google's revenues today are a few hundred billion dollars and the market that they serve is now $600 billion.