Applying Lessons Learned From The California Gold Rush To Generative AI

Late last year, my colleagues at the Fellows Fund wrote about the similarities between the current AI frenzy and the California gold rush of the mid-1800s. There are some great points in this piece that have resonated with me from a technology and strategy perspective. Notably, the authors write, “This historical era…offers valuable lessons for those navigating the emerging AI revolution. It underscores the importance of strategy, innovation, and perseverance in this new era.”

This is solid advice for entrepreneurs: Few, if any, of us as business leaders would find fault in the concepts of innovation and strategy. But I think it misses the mark on the broad philosophical parallels we can draw between today and the heady gold rush days. When Google celebrated its 25th anniversary last year, CEO Sundar Pichai explained in his blog that “AI will be the biggest technological shift we see in our lifetimes. It’s bigger than the shift from desktop computing to mobile, and it may be bigger than the internet itself.” Given the magnitude of AI’s potential impact, I think it’s worth connecting some philosophical lessons learned from that famed gold rush era.

When the conditions for a technology shift are right, workers will follow.

One set of advances always gives birth to the next one. In the case of the California gold rush, it was the Industrial Revolution. In a world that was embracing manufacturing progress, news of gold found at Sutter’s Mill in 1848 traveled fast and spurred the arrival of gold seekers from around the globe. The population swelled from about 4,000 miners just after the time of discovery to 250,000 by the end of 1853.

In the case of generative AI, it took somewhat longer. The vast amount of data made possible by the evolution of the internet in the past two decades enabled large language models to emerge in the last 18 months. According to LinkedIn, job postings on the platform referencing "either AI or generative AI more than doubled globally between July 2021 and July 2023." Employers are hurtling toward this technology, and prospective employees will see the opportunity and develop the requisite skills.

Not many people will become ultra-rich, but the positive impact will go far.

Most of the intrepid miners who came to California in the mid-1800s faced disappointment and left without their sacks of gold. A silver lining for those who stayed was the economic growth of the region thanks to industrial and agricultural development—some of the hallmarks that have made California unique and successful up through the present day. Formerly the village of Yerba Buena, the city of San Francisco became a hopping-off point for gold prospectors. Groups of mining hopefuls arriving from all corners of the world endowed the city with a host of cultures and traditions that can still be seen today.

It seems fitting that Northern California is at the center of the revolution happening more than 175 years later. Although only a few entrepreneurs will become independently wealthy, the economic ripple effect of AI and those who are developing it will favorably affect communities not just in California but across the country.