Summary

• AI is currently causing a "radical alteration" of the entire software industry (as of Feb 2026, based on 2023 observations), signaling a new, intense wave of technological disruption that is already underway.
• Decades of information technology (internet, social media, smartphones) have already profoundly reshaped human life, leading to a massive reorientation towards digital interaction. American adults' daily social media time more than doubled between 2008-2018 to over 6 hours, with about a third of the populace "almost constantly" online.
• Despite these deep societal changes, the author notes a "productivity paradox," where IT hasn't significantly boosted measured Total Factor Productivity (TFP), potentially due to digital distractions. However, he argues technology fundamentally "weirds the world" by altering human behavior and social structures in ways not always captured by traditional economic metrics.
• Key shifts include the obsolescence of traditional navigation and knowledge-seeking (GPS, Wikipedia), the rise of "vertical communities" over physical ones, ubiquitous digital memory and surveillance, and the ease of global communication, all pointing to continued disruption in social, educational, and privacy-related sectors.

=== MARKET IMPLICATIONS === * Continued Tech Dominance & AI Investment: The "radical alteration" of the software industry by AI suggests ongoing, aggressive investment in AI infrastructure, development, and integration. Companies leading in AI capabilities or enabling AI adoption will likely see sustained growth and market re-ratings. * Digital Consumption & Advertising: The pervasive "screen time" trend reinforces the long-term bullish case for companies in digital advertising, social media platforms, streaming services, and mobile device ecosystems. Consumer discretionary spending continues to shift towards digital experiences, solidifying the revenue streams of these platforms. * Productivity Paradox & Valuation Nuance: The observation that IT hasn't significantly boosted TFP, despite profound societal change, implies that traditional economic models might undervalue the qualitative benefits of technology or that the monetization of these benefits is complex. This could lead to a re-evaluation of tech company valuations, focusing more on user engagement and societal impact rather than solely on direct productivity gains. It also suggests that companies promising true productivity gains from AI might be highly rewarded. * Disruption of Traditional Sectors: The obsolescence of traditional navigation and knowledge-seeking implies ongoing pressure on legacy information services, physical retail (as online discovery dominates), and potentially even urban planning/real estate if the rise of "vertical communities" diminishes the need for physical proximity. * Privacy & Cybersecurity: The increasing ubiquity of digital tracking and permanent digital memory ("The Universe has memory now") highlights the growing importance of privacy-enhancing technologies, cybersecurity solutions, and data governance. Regulatory scrutiny on data collection and usage will likely intensify, creating both opportunities and risks.