The Rise of AI: A Primer for Thoughtful Investors

One cannot read, turn on or log into any platform, whether it is print, broadcast, or digital media, without encountering the concept of Artificial intelligence (“AI”) or the many issues that surround it. It is all around us and it is here to stay. The subjects include helpful direction, such as how to use it in everyday life like drafting a letter. AI, of course, exists to assist in many aspects of our careers and professions such as assisting lawyers with legal research and supporting companies, large and small, with insightful and time and resource saving innovations for companies in human resources. It can also lead us to brave and aspirational new worlds of medical innovations, while also giving us pause to consider many worrying aspects such as job loss and robot armies. And the much more concerning are the advancements in AI technology that give real credence to the dystopian literature and movies we’ve enjoyed and feared since well before “Terminator”, “Brave New World”, and “1984” entered into our popular lexicon. Clearly, AI can be many things; but, at its core, what is it?

An academic definition of Artificial intelligence is that it is a field of study and engineering focused on building machines, especially but not limited to computer programs, that perform tasks associated with intelligent behavior, such as making predictions, recommendations, or decisions to influence real or virtual environments. In this sense, AI systems can use inputs to perceive their environment, build or use models through automated analysis, and then use those models to generate outputs that guide action toward human-defined objectives, a framing that aligns with widely used policy definitions of “AI systems” intended to remain technically accurate as the technology evolves. A more “plain language” definition would suggest that AI is a system in which computers are trained to do things that usually need human thinking, like recognizing patterns, learning from examples, understanding language, and making choices. AI, or more correctly the computers and other machines guided by AI, do not merely follow fixed instructions or bright-line code. An AI system interprets data, learns what tends to happen, and then uses that learning to make a prediction or recommendation or complete a task independent of any fixed code. Simply put, it thinks, it does not simply do.

The more it thinks and does, the more it will be characterized as “generative AI,” creating new content, like text, images, music, audio, video, or computer code, based on patterns it learned from lots of examples, without the need for prompts or specific direction. Instead of only recognizing or sorting things, generative AI can produce something new that looks and sounds like what it has learned.

No matter how we define AI, the stakes are high and only stand to get higher regarding how we conduct our everyday lives, manage our environment and energy resources, solve our disputes, approach our investments, and what we expect from our governments. Goldman Sachs predicts that large, hyperscale companies will invest more than $500 billion in 2026 on AI research and AI initiatives. This increased investment in AI (particularly generative AI), creates an incredible demand for resources. Construction of data centers has expanded greatly in just the past few years and the total energy demand of these data centers, if they were grouped as a sovereign nation, would place them “fifth place on the global list [of energy users], between Japan and Russia.” In Virginia, considered by many to be the data center capital of the world, data centers enjoy a very favorable tax exempt status. Despite one party controlling the Governor’s mansion and safely securing both houses of the state legislature, a dispute over the financial and environmental impact of data centers, and their perceived political power, has created an impasse wherein the State has no budget for the next fiscal year as of this article’s publication.

Of course, feuds regarding AI-related issues are not limited to the political sphere. In Oakland, California, a recently concluded lawsuit regarding the future OpenAI, the company best known as the developer of ChatGPT, illustrated the market value, current and potential, of AI. In this lawsuit, tech-savant Elon Musk sought to keep the company, valued at over $800 billion, as a non-profit, open source AI company to “benefit all of humanity” and to avoid a “Terminator outcome” where one or few elite corporations controls the potential destructive power of generative AI. The defendant OpenAI, led by other tech leaders including former Musk-protégé Sam Altman, argued that the company needs a profit source to keep the AI accessible to many; Musk Attorney agreed that a profit function is necessary, akin to a museum gift shop supporting the museums altruistic aims but argued that OpenAI has gone well beyond that. The lawsuit concluded in a jury verdict against Musk, opening the door for an OpenAI IPO that could exceed $1 trillion.

Many celebrities, not the least of whom include Taylor Swift, have turned to filing for protection of their voice and image with the U.S. Patent and Trademark Office. They are concerned that AI “deep fakes” will be used, without their approval, in false commercial advertising, political endorsements, or more nefarious reasons. No matter how the OpenAI case is decided or how Ms. Swift’s efforts conclude, these efforts and those like them will affect how advances in AI will proceed.

Artificial intelligence, and its effects, will have an impact everywhere, on everyone, for a foreseeable future. We do not need to become coders or completely versed in AI, but we should be aware of its foundations, how it works, and what it can do. It will be ubiquitous in our lives.
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1. Edward C. Baig, E., AARP, (Dec. 17, 2024), “How AI Can Help You Navigate the System Like a Pro”; https://www.aarp.org/personal-technology/navigate-the-system-with-ai/

2. Heather L. King and Tom Daley, (June 2025), Texas Bar Journal, “AI Evidence in Texas Litigation
Admissibility challenges in the age of generative AI.”; https://www.texasbar.com/AM/Template.cfm?Section=articles&ContentID=68073&Template=/CM/HTMLDisplay.cfm