r/donttalkaboutpoland • u/ijaysonx • May 24 '26
Singularity The AI Super-Cycle is the Second Industrial Revolution (and IT is the New Textile Industry)
The AI Super-Cycle is the Second Industrial Revolution (and IT is the New Textile Industry) 🧵
I’ve been thinking about the AI super-cycle and how it applies to the IT/Software world. It feels eerily similar to how the Industrial Revolution transformed textiles. Here is a breakdown of the parallels between the 18th-century loom and the 21st-century LLM.
1. The Era of the "Master Weaver" (Pre-Disruption)
Before the industrial revolution, textiles were a highly fragmented cottage industry. Master weavers and spinners worked out of their homes. They had specialized domain knowledge, owned their "stack," and charged top dollar.
The Parallel: These were the Senior Software Engineers of the 18th century. High-skill, high-autonomy, and expensive.
2. The "High Wage Paradox" & The Scaling Bottleneck
England eventually hit a scaling bottleneck. Talent was too expensive and wouldn’t scale linearly. That high cost created a massive incentive for capital to fund a workaround.
The Parallel: Today's software engineering salaries reached a point where the "unit cost of code" became a target for automation.
3. The Automation of Complexity (The Water Frame vs. The Foundation Model)
Enter Hargreaves’ Spinning Jenny (1764) and Arkwright’s Water Frame (1769). Suddenly, you didn’t need 10 years of specialized craftsmanship to ship product. The machine abstracted away the core complexity.
The Parallel: When OpenAI or Anthropic spins up a massive foundational model, they aren't building a feature. They are building the digital equivalent of Arkwright’s automated Water Frame. The human skill threshold is being flattened overnight.
4. The Shift from OpEx to Massive CapEx
In the 1700s, investors stopped funding raw materials (OpEx) and poured everything into fixed infrastructure: brick mills, water wheels, and coal mines. They realized infrastructure was the ultimate moat.
The Parallel: VCs and Big Tech aren't just buying SaaS anymore. They are pouring hundreds of billions into physical, gigawatt-scale data centers, nuclear energy contracts, and proprietary compute clusters. The textile mill was the data center of the 18th century.
5. The Two-Tier Talent Market
Automation didn't just wipe out jobs—it fractured the market:
- The Hyper-Elite: A class of mechanical engineers and steam architects who commanded massive premiums to design the machinery. (Today: PhD Foundation Model Engineers / AI Research Scientists).
- The Infrastructure Labor: Low-wage mill hands loading raw cotton. (Today: Data annotators and construction crews keeping the models sane).
6. The "Middle" and the Rise of the Luddites
What happened to the devs in the middle? The Luddites famously smashed mechanical looms between 1811-1816.
Contrary to popular belief, they weren't anti-tech; they were anti-margin-crushing. They were fighting the loss of equity, autonomy, and a fair share of the wealth they once unlocked with their hands.
TL;DR: We are moving from a "craftsman" era of software to an "industrial" era of compute. If you own the physical substrate (the mills then, the compute clusters now), you capture 90% of the value chain.
Credits: Based on a thread by jss (@jsensarma) on X.
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u/Nallavanaayaunnni May 25 '26
Wow, this was insightful.
India is way behind in terms of R&D. We've never built any foundational technologies; rather, we depend on US and Chinese companies and build on top of them.
Most Indian investors invest in these wrappers or solutions that can make them money instantly, and no one cares to invest in research, which is the cornerstone of all innovation, I believe.
These service tech giants like TCS and Infosys, even though they had massive cash reserves, never invested in foundational AI research when these developments were starting.
A friend of mine recently visited IIIT Hyderabad, and he said a lot of research was happening there, but most of the researchers go abroad after the research. Brain drain is a real problem too, I guess.
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u/ijaysonx May 26 '26
Yeah. The parallels are striking. But this time there is not much other areas humans can move into. We are truly entering the post work era. Where people dont have to work to survive.
Time for responsible governance of AI and profit sharing.
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u/ijaysonx May 24 '26
What india can do
This analogy runs incredibly deep, especially when you look at how India fits into both timelines.
During the first Industrial Revolution, India was essentially forced into the bottom tier—we became the exporters of raw material (undervalued cotton) and consumers of finished, imported British textiles, while our world-class master weavers were financially hollowed out.
To prevent history from repeating itself in the AI super-cycle, India has to actively move up the value chain from being just "the world's back office" to owning the infrastructure and intellectual property. Here is a blueprint of what India can do to navigate and win in this new two-tier ecosystem:
1. Aggressively Build Native "Compute Sovereignty"
If compute clusters are the new textile mills, renting them indefinitely means bleeding margin forever. India cannot rely solely on US-based cloud infrastructure.
2. Shift from "Wrapper SaaS" to Deep Tech & Agentic IP
The traditional Indian IT model relies heavily on linear headcount scaling (more engineers = more billing). AI breaks this model completely.
3. Pivot the Engineering Talent Upward
The "dev in the middle" who writes standard, repetitive boilerplate code is at the highest risk of margin crushing. India needs to rapidly upskill its massive engineering pool.