AI is evolutionary, not revolutionary — it is merely the latest stage of the digital revolution that began with the IBM mainframe in the mid-1960s, and data should be recognized as the fourth factor of production because it never becomes scarce.
Yardeni reframes AI as continuous, not discontinuous: a continuation of the digital revolution begun in the 1960s with the mainframe. He argues data—unlike land, labor, and capital—was never scarce, making it a fourth factor of production. ✦ AI generated
Ed Yardeni · The Compound · 2026-08-07 · original ↗
starts at this moment · 12:24
“But you said that in August of 2020, you could not have known about the existence of chat GPT or any”
in my mind AI is evolutionary evolutionary not revolutionary. The revolution is what I call the digital revolution and it started in the mid 1960s with the IBM mainframe and the whole point of that digital revolution is to process more and more information as quickly as possible as cheaply as possible... economists I was taught that there's three factors of production: land, labor, and capital... There's no there'll never be a shortage of data. So data is the fourth factor of production is the way I look at it.
verbatim transcript · starts at 12:24
12:24uh in uh November of 2022 uh chat GPT would kind of get everybody excited about this uh this new technology. Uh let let me just say something about that and that is um in my mind uh AI is evolutionary evolutionary not revolutionary. The revolution is what I call the digital revolution and it started in the mid 1960s with the IBM mainframe and the whole point of that
12:51digital revolution is to process more and more information as quickly as possible as cheaply as possible. We've come a long way since the mid1 1960s and a AI is part part of that. uh uh revolution part of it. >> Okay. So you don't see this as being I mean I think you see it as being transformational but you see it as more iterative on top of internet 1.0 2.0
13:16>> and main all the way back to mainframe computers. I mean that was revolutionary at the time. I I think what AI has done is it got us to the point where we realize we're sitting on a lot of data that we're not taking advantage of and really understanding what we could learn from that. So, you know, as an economist, I was taught that uh there's three factors of production: land,
13:35labor, and capital, and that they're all kind of scarce, and that it's an economist's job to figure out how to optimize everybody's happiness with the scarce resources. There's no there'll never be a shortage of data. Uh so, and data is the fourth factor of production is the way I look at it. >> We're creating more data every month than has ever existed in the world before. That's correct. Something crazy
13:56like that. Okay. What's what's ironic is if somebody would have in August 2020 taken what you said we could be setting up for a roaring 2020s. You think about like what's the revolutionary technology? They probably would have been talking about blockchains. >> No, I mean blockchain >> maybe space a little bit. >> Yeah, I think you know blockchain obviously has a role in things like stable coin and that's uh probably going
14:20to revolutionize uh finance in in many ways. So blockchain is just another technology that uh you can kind of throw in and say here you make a list of all the technologies that could make this the roaring 2020s and you could add that to to that list for sure. >> Michael and I were debating somebody good naturatured debate. Um, in 2022 it really felt like the economy was headed