Throughout history, technological advancements have transformed complex innovations into commonplace utilities, a process known as commoditization. This phenomenon is evident in the evolution of electricity and steel, and it is anticipated that artificial intelligence (AI) will follow a similar trajectory.

Electricity

Throughout history, technological advancements have transformed complex innovations into commonplace utilities, a process known as commoditization. This phenomenon is evident in the evolution of electricity and steel, and it is anticipated that artificial intelligence (AI) will follow a similar trajectory.

Early Developments: Pioneering work by scientists such as Benjamin Franklin, Alessandro Volta, and Michael Faraday in the 18th and 19th centuries laid the groundwork for practical applications of electricity. Faraday's experiments in electromagnetic induction were particularly pivotal, leading to the development of electric generators.

Commercialization and Infrastructure: In 1882, Thomas Edison inaugurated the Pearl Street Station in New York City, one of the world's first central power stations, marking a significant milestone in the commercial distribution of electricity. This development enabled the widespread adoption of electric lighting and powered various appliances, enhancing daily life and productivity.

Standardization and Mass Production: The late 19th and early 20th centuries witnessed the standardization of electrical systems and the mass production of electrical equipment. Innovations such as the alternating current (AC) system, championed by Nikola Tesla and George Westinghouse, allowed for efficient transmission over long distances, further promoting the widespread use of electricity.

Commoditization: As technological advancements reduced production costs and improved efficiency, electricity became more affordable and accessible. The establishment of centralized power stations and expansive distribution networks transformed electricity into a commodity, integral to modern life. This commoditization spurred economic growth, led to the creation of electrical utilities like Schneider and General Electric (GE), and fostered the development of electrical appliances and machinery, revolutionizing industries and households alike.

Effects: The commoditization of electricity had profound impacts:

• Industrial Efficiency: Electric-powered machinery enhanced production capabilities and operational efficiency.
• Improved Quality of Life: Electric lighting and appliances improved living standards and convenience.
• Economic Growth: The electrical industry became a significant economic driver, creating jobs and fostering innovation.

Steel

The evolution of steel from a luxury material to a fundamental component of industrial society illustrates the commoditization process.

Technological Breakthrough: In 1854, Henry Bessemer's invention of the Bessemer process revolutionized steel production. Inspired by a conversation with Napoleon III about the urgent need for better artillery and guns, Bessemer developed a method to efficiently mass-produce steel by blowing air through molten iron to remove impurities. As he later reflected, this discussion "was the spark which kindled one of the greatest revolutions" of the 19th century.

Mass Production and Cost Reduction: Entrepreneurs like Andrew Carnegie capitalized on the Bessemer process to industrialize steel manufacturing. Between 1873 and 1875, Carnegie Steel slashed the price of steel railroad rails from $100 to $50 per ton, and by the 1890s, rails sold for just $18 per ton. Globally, the Bessemer process reduced costs from £40 to £6–7 per long ton, democratizing access to high-quality steel.

Commoditization: The mass production and standardization of steel transformed it into a commodity. Its affordability and availability made it indispensable across industries, from infrastructure to military hardware. Companies like ArcelorMittal emerged as titans, while lasting economic value shifted to those who leveraged cheap steel to build railways, skyscrapers, and machinery.

Effects: The commoditization of steel had significant impacts:

• Infrastructure Development: Affordable steel enabled railways, bridges (e.g., the Brooklyn Bridge), and skyscrapers, fueling urbanization.
• Military Advancements: Higher-quality steel produced durable artillery and naval ships, reshaping warfare.
• Industrial Expansion: Steel became the backbone of machinery, tools, and eventually automobiles, driving global industrialization.

Intelligence as a Commodity

The progression of artificial intelligence mirrors the historical patterns of commoditization seen in electricity and steel.

Technological Breakthroughs: Recent advancements—cheap transistors, big data, and accelerated computing (e.g., NVIDIA's GPUs)—have propelled AI forward. The 2012 AI renaissance, marked by deep learning breakthroughs and the 2017 Transformer architecture, enabled models like OpenAI's GPT series. These innovations parallel the Bessemer process, drastically reducing the cost of computational "intelligence."

Mass Production and Accessibility: The proliferation of AI frameworks (TensorFlow, PyTorch) and cloud-based services (AWS, Google Cloud) has democratized access. Startups like Mistral and DeepSeek now compete with giants like Google DeepMind, while open-source communities accelerate innovation.

Commoditization: As with steel and electricity, the commoditization of intelligence is driven by plunging costs and standardization. Today, AI tools that once required specialized expertise are now API-driven utilities. This shift mirrors Carnegie's price cuts: startups today can access GPT-4-level intelligence for pennies per query, a cost that continues to fall.

Effects: The commoditization of intelligence is anticipated to have far-reaching impacts:

• Autonomous Systems: AI agents automate tasks in software (e.g., customer service bots), robotics (Tesla's Optimus, Figure 1's humanoids), and logistics (autonomous ships and drones).
• Scientific Innovation: AI accelerates drug discovery (e.g., DeepMind's AlphaFold) and materials science, unlocking sustainable energies.
• Economic Shifts: Early winners (OpenAI, NVIDIA) focus on producing AI infrastructure, but lasting value will flow to those who embed commoditized AI into products—much as Schneider and GE thrived by building on cheap electricity.

Conclusion

History shows that groundbreaking technologies follow a predictable arc: scarcity, mass production, commoditization, and finally, ubiquitous utility. Just as Carnegie's steel and Edison's electricity became the invisible foundation of the 20th century, AI is poised to become the "invisible infrastructure" of the 21st. The first winners of the Intelligence Revolution—companies like OpenAI and NVIDIA—are those driving down costs. The enduring winners, however, will be those who harness cheap, ubiquitous AI to redefine industries, much as railroads and skyscrapers transformed the physical world. Intelligence, once a rare resource, will soon be a commodity as unremarkable—and as essential—as steel beams or electric light.