The rapid advancement in artificial intelligence (AI) has brought us to another civilisational crossroads. As we head towards another wave of ‘creative destruction’, in Schumpeter’s terms, the rules seem to have changed a bit from the past.
Earlier, each successful transition disrupted the last: steam-powered mechanisation drove the first wave of the Industrial Revolution, which later gave way to electrification, mass production and modern industry. More recently, the internet era disrupted digital media and its consumption. But today, rather than being destroyed, the internet is being rapidly built upon as the AI Age advances.
Recently, a simple attempt to purchase a pair of jeans online highlighted the pervasive presence of AI in everyday life. Normally, I would scroll through several pictures and websites to find the best deal. This time, I uploaded pictures to Claude and began a back-and-forth thread, comparing similar designs. I gave it several variables: Lahore’s weather and humidity, my cycling and walking routine, and within minutes, Claude helped select a pair with roughly 98 per cent cotton and 2.0 per cent spandex. In this small interaction, I had made my first purchasing decision with AI. It made me wonder: how did we get here?
To understand how AI will almost certainly reshape our world, we must revisit how the internet evolved. What began as a collection of static webpages was reorganised by search engines like Google, which indexed sites much like a digital yellow pages directory. Economically, the internet inherited the business model of the television era: advertising and commissions. Platforms took a cut of every click, transaction and impression.
The smartphone and 4G made the internet mobile, exploding the number of computers online. People could now carry computers in their pockets. A new generation of apps emerged as middlemen connecting human services to demand in real time. The model extended across sectors, but the pattern remained the same. Provide no product; just take a fee to connect buyers and sellers.
In time, most of these companies commanded trillion-dollar valuations, simply following the ‘middle-man’ business model. Humans created content and services; platforms captured the value through advertising. These companies made billions, which were reinvested in data centres to foster unlimited content creation.
As revenues increased, so did the internet’s ability to track user preferences through cookies, eventually tailoring ads and content best suited to individuals. Marketing thus shifted from broadcast messaging to hyper-targeted persuasion. Transformed with 4G, social media transformed into the ‘influencer’ era. In Schumpeter’s terms, another wave of creative destruction wiped out traditional media roles, merging the editor, model, cameraman, actor and lighting crew into a single person who was equipped with the smartphone.
Providing unlimited content with algorithms deciding preferences, a slot-machine-type mechanism was imitated. Dopamine addiction spread rampantly. Influencers (often lowly paid) helped the ‘house win’ by shaping travel destinations, hotels, clothing, skincare and even worldviews (feminism, toxic masculinity, etc). Imitation became the norm, suppressing individual choice and independence. Conformity on social media meant everything, with only a few influencers making big. Others struggled with content; their fate resting with algorithms.
Much like a casino, the house always won. Regardless of whether advertising or sponsoring posts brought money, fame or followers, money was always being made by all of these apps. Users generated the content, traffic and data; platforms monetised it. Careers rose and fell at the mercy of algorithms. Those at the bottom competed for scraps. The audience, the creator and the product became the same person.
But that age is now being eclipsed by something else entirely: the AI age. Much like the industrial and agricultural revolutions in Britain freed up human labour, AI is now automating functions outright. With its ability to generate people and images, AI has begun replacing professional models and creatives. It can fully support autonomous advertising campaigns. Nike recently released an AI-generated film of Serena Williams playing against her younger self. A prediction platform, Kalshi, aired a thirty-second NBA Finals ad created entirely by AI for under $2,000, something that would once have cost hundreds of thousands.
All of this is only the beginning. Facebook took years to mature; AI leapt from novelty to a commercial force in under three years. Facebook took several years to reach roughly 200 million users. OpenAI’s ChatGPT crossed that threshold in a fraction of the time, accelerating from launch to half a billion weekly active users by early 2025, and is on track to approach seven hundred million. Tasks that once required specialised skill, such as writing essays, drafting architectural renderings or creating lighting setups, can now be done by anyone with a prompt. Nearly every creative function that smartphones democratised is now being executed by AI at scale.
The internet and social media disrupted creative professions, but their deeper legacy was the mass digitisation of everything: mail, music, news, commerce. That digitisation set the foundation for what would eventually become the AI age. AI is advancing beyond discrete industries and moving into the domain of reasoning itself. Accountants use AI for audits; analysts build models with it; nearly half of US equity trades are executed algorithmically; consultants run strategy simulations; lawyers automate research and contract review; architects generate dozens of building concepts in minutes. Even shopping, the smallest act of judgment, has become AI-mediated.
This is a second collapse of specialisation, but on a scale the social media age never reached. Where smartphones replaced tools of production, AI is eroding the need for judgment. Changes that took months can now arrive within weeks or months. AI-generated ads reached national broadcast within eighteen months. The gap between experimental and industry standard is shrinking faster than education, labour markets or regulation can keep up. The shift reverberates with the turbulence of a tsunami: sudden, discontinuous and largely indifferent to our ability to adapt.
The dopamine economy is shifting already. Social platforms pulled people in through likes, friendship loops and influencer recommendations. Travel and shopping choices were influenced, but softly. Cookies were a crude tool. A single laptop served an entire household, which meant advertisers guessed more than they knew. That era is ending. AI systems now sit inside private chats, learning from conversations instead of clicks. The stakes are growing. Character.AI recently announced it will block users under 18 after a 14-year-old in Florida died by suicide while repeatedly messaging a bot; lawmakers are now proposing national restrictions. This marks a new kind of data relationship, one shaped by emotional dependence rather than browsing history.
As LLMs collect more conversational data, they build a deeper picture than trackers ever could. So far, major AI labs have not monetised this information, claiming to gain revenues from subscription and not usage of the information. But when commercial pressure arrives, the consequences may be beyond comprehension. These chatbots would precisely know how people think, hesitate, doubt, and decide. Advertising that once targeted behaviour may begin targeting vulnerability. AI would, in effect, sell judgement.
This convenience risks hollowing independent thought. Why research when an AI gives you the answer? It becomes easier to accept the first reply than to chase the truth yourself. Convenience breeds quiet dependence. When answers arrive instantly, curiosity weakens. Choice feels unnecessary when a machine chooses faster.
We now face a choice: repeat past mistakes or learn. Every major technological shock, including industrialisation, electrification and the internet, created anxiety, yet societies adapted. But these transitions carried heavy costs when change outpaced preparation. Social media democratised information but brought misinformation, addiction and the collapse of privacy. We failed to educate users, especially young people, before the harm took hold. We cannot afford to sleepwalk into this era.
AI has real benefits, including democratising expertise, reducing costs and accelerating discovery. But these benefits require intentionality. Workers displaced by AI need real training paths; the public must be taught what AI collects and how it decides. Most importantly, we must resist the instinctive fear that all change is harmful. The threat is not AI itself, but unstructured, unregulated deployment and broad public illiteracy about how it works.
The social age taught us what happens when we move fast and break things without examining what broke. We have already seen what unrestrained digital systems can produce. We know the consequences of neglect.
The question now is simple: will we learn from the last revolution, or will we scroll past this moment too – only to ask, once again, how did we get here?
The writer is an economist and an educationist.
