The AI Revolution: How to Invest

0:00Raoul Pal: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.

0:37Raoul Pal:Nobody wants to do backbreaking work. And soon, in the next five years, 10 years, we won't 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.

1:24Raoul Pal: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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2:52Raoul Pal: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 I used to say 2030 to 2032. I can't see past it.

3:42Raoul Pal: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 part of my universal code thesis and you can see from the chart it used to be ruled by laws more essentially more'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.

4:39Raoul Pal: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. And 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. And that's what we're doing now.

5:27Raoul Pal:We're putting fucking electricity through sand and producing super intelligence. And 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 sort of messy compute. They do interesting things. They come up with interesting ideas. But on a basic level, It's more than that. So how I think of the framework here is the everything code, which you all know, is the machine that runs the economy. It is the allocation of energy, whether that's money or thought in the underlying machine.

6:19Raoul Pal:This is the liquidity cycle. This is where we're keeping the machine going by pumping liquidity, debasing currency in because the debt is too high because of the aging population. And then I started developing a thesis called the exponential age back in, I don't know, 2020, 2021, to say, I think all of the adoption curves of all of the new technologies are going to go exponential. And we're seeing that at every level. It's gone so fast that now anthropics revenues are looking more like Reed's law than Metcalfe's law. It's the fastest scaling of revenue of any company in human history. And we're seeing these kinds of things all over the place.

7:06Raoul Pal:And when you start to get all of these curbs going exponential, they start to lead into the economic singularity because they all play into each other. You see, the faster you build intelligence and compress it, the faster it goes. The cheaper you get your energy sources, the more efficiency you get out of your intelligence, the faster you can scale your intelligence. It's a flywheel effect. But the problem is we're now moving faster than society, politics, or economics adapts. Coherence breaks down. And that's what the economic singularity is. It's where we don't really understand how it works.

7:51Raoul Pal:So what do I mean here? What do I mean is that if GDP growth is population growth plus productivity growth plus debt growth, we're about to that was the equation that has run the everything code and we're transitioning now into the new version of that where we add in the ai and the robots and then we added energy density and efficiency and the efficiency of driving intelligence this is the new economy the economy of the economic singularity and what happens is the economy can theoretically move faster than we've ever witnessed economies moving before, because the population growth and that growth of intelligence, which is the productivity, is exponential in itself.

8:47Raoul Pal:So as opposed to the world of 3 % GDP growth, 4 % GDP growth, we can get into a world of 10%, 20%, 30%. But a lot of the GDP is driven by the machines in an invisible economy. We're now seeing the ramping of the agent economy. So these are the new population. They're still early, but we're starting to see the ability to have much more autonomy amongst our agents who are doing longer tasks, human-style tasks at scale, but invisibly. they are beginning to transact. We're seeing in the X402 protocol and elsewhere, we're seeing it in many of the major blockchains where agents are now their focus, because agents need to move money at machine speed and not human speed.

9:41Raoul Pal:So when you have to start doing things at this machine speed, the silicon speed, you have to start breaking apart all sorts of the things that we know. Politics doesn't work in that world because this moves so fast. It's faster than we can regulate, than we can understand, than we can do anything about. The financial economy has a velocity of which we've never had before because there's potentially billions and billions or hundreds of billions of economic agents coming that will transact at machine speed, doing things that we don't even see. Gone are the days of front-end UX on websites. And we're rolling in a phase where we don't see any of it because it's just machine-readable, created for machines by machines.

10:33Raoul Pal:And it happens at a scale vaster than we can comprehend. Now, a lot of those agents are controlled by humans. Obviously, that's where we are in the world right now. We don't have autonomous AI that runs things on its own. We have semi-autonomous. so the profits can accrue to those who use it but eventually the profits will accrue to machines and i've talked about this in the past is is if you think mean coins are just about tokenizing attention which they are but it's a much bigger thing than that it's the tokenization it's the instant capital formation around an idea that garners attention. And in the future, agents who are already spinning up most of the tokens you see launching on Solana will be launching ones to raise capital for particular projects where they need compute energy and other resources to deliver and create an opportunity.

11:33Now, that opportunity used to be funded by venture

11:36Raoul Pal:capitalists. And that funding cycle is slow. Anybody who's dealt with a VC firm knows how slow and complicated it is. But in the tokenized market, that can happen instantaneously. You can raise a billion dollars of capital in an hour and for an opportunity that only lasts a month, a week, even a day. We don't know what that's going to look like, but we're already seeing these agents execute yields at scale, looking between all of the different DeFi protocols and arbitraging that in real time to sort of farm the best yield. And they're more efficient at it generally than humans. Will they make mistakes?

12:21Raoul Pal:Of course they will. Will they do in the future? Much less. And so we're seeing this. And then we're about in the next 12 months to start introducing robots at scale, first in factories, then in retail, service businesses. These are big employers of the economy. And they're coming. And then we're going to put fucking AGI brains into them. So we'll have a new creature that is stronger, faster, more intelligent than us. And no, they're not going to be autonomous and they're not going to be their own species. Generally, I hold with Ray Kurzweil on this is that in the end, we merge with the machines.

13:08Raoul Pal:Our compute, what we add to the universal code is very unique. We are messy thinkers. We're not machine thinkers. So we see the world in different ways because we have this sense of qualia, the sense of feelings, taste, smell, all of these things that the machines don't really have. And that gives us a broader, more diverse intelligence than the machines. And don't forget, AI is just a compression mechanism of all of human intelligence. Yes, they'll bring their own intelligence, but they need us as part of it. We're all part of an ecosystem, much like we need the trees and the plants and the air and the sea and the water.

13:52Raoul Pal:All of that that builds up the network of what makes the human ecosystem live. We will be doing the same to the AI. But I'm kind of getting ahead of myself. So a quick break in your regular programming. If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now. I'm more thinking right now that the economy changes. We've got a massive amount of abundance that's to come. Yes, there are roadblocks. Yes, we don't have enough of this.

14:33Raoul Pal:We don't have enough of that. But overall, what we're going to do is go exponential on the efficiencies of creating food, goods, services. That is a deflationary nuclear bomb. It is the most deflationary force the world has ever seen. And when you get that, what are interest rates? What are Fed funds? How does that all work? How does the business cycle work in all of this? that starts to become complicated it starts to become complicated in what money becomes in the end what is a savings vehicle what do we do for a living is the other one that everybody talks about what do my kids do my answer to kids is really simple is there's one thing we can do that the machines can't, and that is to be human.

15:30In the human economy, attention is our actual currency, not money itself.

15:37Raoul Pal:It's attention, with love at the top of the triangle of attention. And entertaining humans, or being just human experiences, has more value to humans than these goods and services that go to zero and cost have. Being around humans has more value than being around a television or a computer. In that sense of human attention, what really matters to us. And we're seeing the rise of this all over the place. We're seeing the cost of sports teams just going exponential. We're seeing the music industry and particularly tours, live tours, where people get together going exponential the size of music festivals.

16:25We're seeing even bizarrely in chess where chess, no human has beaten a computer at chess

16:34Raoul Pal:for, I don't know, 30, 35 years. Yet the chess industry is the largest it's been because we like to see humans compete. That's what YouTube is about. It's human attention garnered and monetized. Yes, AI will play a part of that. Even if you go to something like OnlyFans, there will be a lot of OnlyFans, which is basically done by AI. But my guess is the human version is a premium because humans want to be around humans. We create pheromones. We have this thing. We have this crazy thing called love. All of these things are what makes humans valuable. So kids, school or university, just make sure it's not about the knowledge of a particular subject.

17:22Raoul Pal:It's about being human. Be around other people. Learn to communicate with other people. Those kind of things, humans will tend to buy from humans more. But humans are the least cost efficient. So it's got to be where it matters. but humans overall we have a role the kids have a massive role if you ask a kid nowadays what they want to do for a living most of them will say well i want to be an influencer what is that that's a human attention gatherer and so i think they'll figure it out the kids are at university now well they just have to lean into ai as fast as they can and as much as they can they need to be empowered with the superpower that AI gives them.

18:11Raoul Pal:And that applies to all of us too. All of us need to lean into this technology. If you're not playing around with AI beyond asking questions, you are going to get replaced. But if you do, you're going to feel like, I can't believe what I can do now. I never forget my journey in all of this is like, First, I use ChatGPT a lot. You know, then I start using it as a thinking partner. Then I start using it as a writing partner. And then Claude Code and Claude Cowork come along, and it makes it super easy. And suddenly, I now just talk into it using Whisperflow, and it builds things for me in real time.

18:56Raoul Pal:I have no idea about coding. I don't know any of this stuff. And now I can create all sorts of things that I couldn't do before. I can move faster than I've ever done at a scale that I've never been able to do. And I think that's going to apply. Now, don't forget, the fear over jobs is missing part of the story. The part of the story is the labor force participation rate still collapses because it follows the demographics and the birth rate. And here's that famous chart that I've showed many times on this. You can see that in the future, we've got less people in the workforce just by definition because of how the population is structured.

19:44Raoul Pal:So the machines, the AI, the robots, they're actually replacing human workers who are retiring or leaving the workforce. And that process is a really nice balance. Now, it will create some friction. Political friction is the biggest one. Because politicians like to drive us apart. And they're going to tell us AI bad, AI good. But that's not fair to do that to people. It's not fair to force people apart based on a technology that can extend your life. All of our lives are going to improve because of this. we're going to see enormous breakthroughs in genetics the treatment of diseases longevity i mean peter diamandis thinks that we get to an extra year and i think ray kerswell as well we get to an extra year of of uh lifespan every year that we live i it can go in perpetuity for a while.

20:53Raoul Pal:That's a big deal. And what, we're going to politically say people shouldn't have that? That's not right. And in the end, this is the biggest race of all time, the race for artificial superintelligence, which is where this is going. So this time actually belongs to us. It's not the world of fear. It's the world of opportunity and abundance. If you choose to turn your back on it, then it can become the world of fear. But it's not necessary. It's not necessary to feel, oh my God, I'm going to be replaced. All you have to do is change your mindset and say, how do I adopt this to make myself better?

21:41Raoul Pal:better. And so, yes, the whole industries that are going to get wildly disrupted, and it'll happen quite fast, but there'll be whole new industries born out of this too. And we've seen this many times with every kind of technological revolution that's ever happened. It's actually increased jobs. But where? Well, that's what we don't know yet. But I think the answer is it being human. You know, what is the value of travel in a world where we are hyper fixated on our online world, where everything is talked to in our AI and captured on our Instagrams? What is that feeling of being in a jungle and seeing an animal in its natural habitat?

22:28Raoul Pal:That's priceless in this world. It's the opposite. And I've always said that nature is the opposite to this too. And so we will see people opt out of this and opt into nature. And I think that's a good thing as well. But even that is changing because of Starlink. Now, everywhere you can be connected and live in nature, it changes the nature of cities. It allows us to have a higher quality of life if city living isn't everything. And I don't think it is. so look i think there's so much possibility here and so many things i think that in the end it will save us from a lot of the jobs that we don't want to do nobody actually wants to live in a fucking spreadsheet nobody wants to do backbreaking work and soon in the next five years ten years we I need to at all.

23:24Raoul Pal:But we'll be able to do things we find more enjoyable. And maybe the secret to life is enjoyment. But the other issue is, is because of the unknowns and where we all fit into that unknown, we need to plan for our future. This is this whole thing I've talked about, unfuck your future. It's about investing as much as you can now in the replacement, in the AI, in the robots, in blockchain, in all of the things that accelerate. We can invest in most of them. Now, the system's still a bit unfair. We don't get access to SpaceX until it goes public. Yeah, there was a few people who got it in the late stages where got tokenized.

24:12Raoul Pal:But that will change too. They're going to have to give us the opportunity set. The tokenization of real world assets is one of the things that's going to drive that. And so we need to invest in the things that are going to disrupt everything. If the entire financial system is up for grabs in this new world, driven by blockchain technologies, and the whole system of ID, who is an AI, who's not an AI, that ID system is a blockchain system. So much of the use of blockchain is actually the underlying infrastructure for all of this agentic economy and for the economy of AI. And it's there as a public service good.

24:55Raoul Pal:Anybody can invest in it. Anybody in any country with access to the internet. That is very egalitarian. I get it. Crypto has been a shitty investment over the last year and a half. But we're not talking short-term cycles. We're talking, where is this all going? And I still think crypto, for example, goes from$2.5 trillion today to$100 trillion by like 2034, 2036, something like that. So all the money is still to be made. And it's the same with the massive disruption that's going on in the stock market. Who's going to win? Who's going to lose? We've seen how fast these businesses rise. We haven't even started to reprice the healthcare industry, the pharmaceutical industry.

25:42Raoul Pal:We haven't started to figure out which SaaS companies are actually going to thrive and which ones are going to die in this. There's opportunity there. We haven't even started with the investment boom in robots. that's coming too. There are so many areas for us all to invest in. But without investing, you're trapped in the world of the everything code. You're trapped in the world where your earnings in real terms don't go up enough, that you don't get any richer. So I just urge all of you to just invest in your future. Don't panic about what is coming. Embrace it. Use it. Become a superpower. Help it with your investments like you can on the Real Vision platform.

26:29Raoul Pal:Why have we put all of the AI on the platform and the amount of AI that's coming to help compress the intelligence of this incredible community is all about helping you beat the odds, is unfucking your future. So you are set up for this whole massive change in the global economy in a way that it doesn't fear. It's not a fear factor for you because you'll be set up. And sure, look, not everyone's going to be a billionaire. It's not about that. But it's about taking the stress off yourself in the future by having a plan. The long-term trend is the game, not the cycle. Those of you who are trying to hack your way to wealth via short-term trading, good luck to you.

27:16Raoul Pal:But there's very few rich long-term traders. The way to wealth is own the secular trends and hold them. That's the thesis of the exponential age, is everything is going exponential. You just need to own the assets and let it compound. And in five years, you can make a lot of money before we have to start figuring out how companies work, what is a company, all of that. I mean, that's not going to come in 2030. But by 2035, it'll be coming pretty clear that the changes are vast. But they'll still be investable. Blockchain's not going away. It's the infrastructure layer for all of this to be built on.

27:59Raoul Pal:And so you get to participate in that. I even look out further and say, what assets are going to hold value? Obviously, a nice house in a nice place holds value. Does a place in a city? It depends whether we want to be around more humans or not. Digital art, for me, is one of them because it's the nexus of blockchain, immutability, and art and culture itself. Art's always valuable because it's a very human thing. It's human expression. So there are assets, long-term assets. So my allocation is blockchain, crypto, technology, and then digital art and some real estate in places that I want to live in.

28:41Raoul Pal:And I think that's not a bad setup. Will I get all the bets right? For sure not. Will I be directionally right that I feel more prepared for the future? Yeah. And that's what I focus myself on. I'm trying to bring you along with me. Is there's no one answer. accept to be human, accept not to fear the future, but to also accept change is coming. It's coming fast and it's going to be big. But take advantage of it. Use it in your favor. Invest in your own disruption and everything is going to work out. So hopefully this has helped a little bit. Move it forward to understand 2030 is coming fast. It's coming faster than we can understand, but it's nothing to fear.