AI Is Accelerating

Your Financial Plan Was Built for a Different World.

What every business owner needs to understand about the next 3 to 5 years—and why the right preparation today could be the most important financial decision you make this decade.
By Michael Hixson, Financial Advisor
 

Something Shifted This Month
 
On February 5, 2026, two of the most important AI companies in the world—OpenAI and Anthropic—released major new AI systems on the same day. Within hours, people who build AI for a living started saying publicly what they'd only been saying privately: this technology just crossed a threshold that changes the timeline for everyone.
 
Matt Shumer, a tech CEO who has spent six years building AI products, published a piece that has now been viewed over 85 million times. His message was simple and unsettling: the AI that exists today made everything before it feel like "a different era," and the disruption that tech workers have experienced over the past year is the disruption everyone else is about to experience.
 
An organization called METR, which rigorously measures AI capability, tracks how long a task (measured in human-expert hours) AI can complete independently. A year ago, the answer was about ten minutes. By late 2025, it was approaching five hours. The doubling time has accelerated from roughly seven months to approximately four months. If that pace holds—and it has held consistently since 2019—we're looking at AI that can work independently for days within a year, and weeks within two.
 
I'm not an AI developer. I'm a financial advisor. But I've spent the last year studying the economic implications of this technology—not the hype, but the mechanics. What happens to labor markets, business models, pricing structures, and financial plans when the cost of cognitive work drops by 90%?
 
The short answer is: a lot.
 
This article is my attempt to walk you through what I've learned, why it matters to you as a business owner, and what I think the practical implications are for your financial life over the next three to five years.
 
The 500-Year Pattern That Should Calm You Down
 
Before I talk about what's different this time, I want to talk about what isn't.
 
In 1589, an English clergyman named William Lee invented a mechanical knitting frame that could produce stockings far faster than any human hand. He brought it to Queen Elizabeth I, hoping for a patent. She reportedly refused, fearing it would ruin hand knitters and "make them beggars".
 
She could see the workers who would lose their immediate livelihood. She could not see the Industrial Revolution that would follow—the factories, the merchants, the engineers, the global trade networks, the rising middle class, and the modern economy that the knitting machine helped set in motion.
 
In 1811, skilled textile workers called the Luddites smashed factory machines with sledgehammers, terrified that mechanization would destroy their livelihoods. Parliament deployed thousands of soldiers to stop them. The Luddites were crushed. And the British textile industry didn't shrink—it exploded, eventually employing far more people than it had before mechanization.
 
The same pattern has repeated with almost comical consistency:
1920s: Headlines asked "Will Machines Devour Man?" What followed was mass electrification, the automobile revolution, and modern medicine.
 
1960s: President Johnson formed a national commission to study whether automation would cause permanent mass unemployment. What followed was the postwar boom, the space age, and the computing revolution.
 
1970s: ATMs were predicted to eliminate 75% of bank tellers. Between 1985 and 2002, ATMs grew from 60,000 to 352,000—and teller employment grew from 485,000 to 527,000.
 
1990s: The internet was predicted to destroy retail, publishing, and travel. It created a multi-trillion-dollar digital economy and millions of jobs that didn't previously exist.
 
The French economist Frédéric Bastiat explained this pattern in 1850, and his insight remains the single most important idea for understanding technology-driven change:
"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."
 
When a new technology arrives, the disruption is immediately visible. You can see the job being eliminated. You can see the business model being undercut. This is what Bastiat called "the seen."
 
What you cannot see—because it doesn't exist yet—are the new industries, the new business models, the new jobs, and the new forms of value that the technology makes possible. Bastiat called this "the unseen."
 
Every technology panic in history has been driven by people staring at the seen and failing to imagine the unseen. And every time, the unseen has dramatically outweighed the seen.
 
If history is any guide, AI will create more prosperity, more opportunity, and more meaningful human work than existed before. That pattern has held for over 500 years. I have no reason to believe it stops now.
 
Why the Speed Makes This Time Genuinely Different
 
So if the long-term outcome is almost certainly positive, why am I writing this?
 
Because the transition period—the messy, disruptive stretch between "old world" and "new world"—may be compressed into a timeframe that catches people off guard.
 
Previous technology transitions played out over decades. The power loom took 40 to 50 years to fully reshape the textile industry. Electrification took 30 years. The internet took roughly 15 years to go from novelty to dominant economic force.
 
The data suggests AI is moving on a timeline of months to years, not decades.
 
Here's what that pace looks like concretely:
2022: AI couldn't do basic arithmetic reliably.
2023: It passed the bar exam.
2024: It could write working software and explain graduate-level science.
2025: Leading engineers reported handing over most of their coding work to AI.
February 2026: New AI systems arrived that tech workers describe as a completely different category from what existed even six months prior.
 
METR's benchmark data shows AI task-completion capability doubling approximately every four months across multiple domains—coding, science, math, and more. A competing academic analysis argues this could plateau around mid-2026, following more of an S-curve than an exponential one. That July 2026 timeframe is a critical watch date: if the exponential pace continues through summer, the transition timeline compresses significantly.
 
This speed matters because institutions don't adapt at the same pace as technology. Banks can't restructure lending standards in four months. Employers can't retrain workforces in four months. Governments can't redesign tax codes in four months.
 
When the technology moves at one speed and everything else moves at another, you get a gap. And in that gap, real financial damage can occur—even if the long-term destination is prosperous.
 
The skilled weavers who fought the power loom were wrong about the long run. But many of them didn't survive the transition to see it. My job is to make sure that doesn't happen to you.
 
What This Means for Your Business
 
If your work involves information processing, analysis, project management, estimating, communication, sales, or administration—and most businesses involve some combination of these—AI is going to change how that work gets done.
 
This doesn't necessarily mean your job or your business disappears. History's clear lesson is that businesses and workers who adopt new technology tend to thrive, while those who resist tend to struggle.
 
But the window for adoption is shorter than in previous transitions.
 
Construction and Real Estate
AI tools for estimating, project scheduling, permit research, and design are already shipping. The construction business that learns to use these tools now gains a significant competitive advantage—faster bids, more accurate estimates, the ability to take on project types that were previously too complex or time-intensive.
The risk isn't that AI replaces construction. Physical work remains stubbornly human for now. The risk is that a competitor uses AI to operate at twice your efficiency and undercuts you on every bid.
 
Auto Dealerships
AI is already capable of handling significant portions of finance and insurance workflows, inventory optimization, and customer acquisition. Manufacturers are beginning to explore AI-enabled distribution models. The dealer who builds AI into their operations now can expand into new revenue streams—online sales, vehicle sourcing, fleet management—that were previously too expensive to pursue.
 
Manufacturing
Supply chain optimization, inventory management, custom order handling, and quality control are all areas where AI delivers immediate value. The manufacturer who uses AI to handle custom orders that were previously too expensive to quote opens up entirely new market segments.
 
The Opportunity Side
Here's what most of the fear-driven articles miss: AI doesn't just threaten existing work. It makes entirely new work possible.
 
The construction company owner who uses AI for estimating and scheduling can now bid on projects in markets they couldn't previously cover. The manufacturer who uses AI for design can offer custom products at mass-production prices. The business owner who used to need a team of twenty to launch a new product line can now do it with three people and AI tools.
 
Bastiat's "unseen" isn't theoretical. It's already happening. The question is whether you're positioned to capture it.
 
Five Possible Paths for the Next 3 to 5 Years
 
I don't believe anyone can predict exactly how this unfolds. But I do believe we can identify the most likely scenarios, understand what each means, and prepare for a range of outcomes rather than betting on a single prediction.
 
Based on extensive research—including analysis from the Bank for International Settlements, institutional forecasters, and the people building AI themselves—here are five transition scenarios I'm tracking, along with their current estimated probability:
 
Scenario 1: Smooth Adjustment (~20%)
AI adoption is fast enough to boost productivity but slow enough for labor markets to adjust. Prices fall gradually, real incomes rise, and the economy enters a productivity boom similar to the late 1990s. This is the best-case transition—everything goes right simultaneously.
 
What it means for you: Business as usual, but better. Your costs drop, your output increases, and if you adopt AI early, you're ahead of competitors.
 
Scenario 2: Two Economies (~35%)
This is the most likely scenario based on current data. AI collapses the cost of anything digital—analysis, marketing, software, administrative work—by 50 to 90% within two to three years. But physical-world costs (housing, healthcare, energy, materials) continue rising.
 
What it means for you: Your business may simultaneously face falling prices in some areas and rising costs in others. Employees in knowledge-work roles face wage pressure. Business owners who adopt AI see margins expand. Those who don't see margins compress.
 
Scenario 3: Government Fiscal Stress (~25%)
Job displacement outpaces the government's ability to respond. Tax revenues fall as unemployment rises. Government spending surges. Deficits expand dramatically. The result is a confusing mix of falling private-sector costs and rising government-driven inflation.
 
What it means for you: Your purchasing power becomes unpredictable. Financial planning based on stable assumptions about inflation, interest rates, and tax policy becomes unreliable.
 
Scenario 4: Credit System Stress (~13%)
If displacement is fast enough, consumer defaults rise, credit markets tighten, and asset prices fall—which triggers more defaults. This is the most severe transition scenario and the one that requires the most defensive preparation.
 
What it means for you: Leverage becomes dangerous. Variable-rate debt becomes a liability. Cash and hard assets become critical. The businesses and individuals who survive are the ones with low debt and high liquidity.
 
Scenario 5: Managed Transition (~7%)
Governments proactively implement retraining programs, tax reform, and support systems that smooth the transition. This is the most optimistic institutional scenario—and the least likely, given the speed of change and the historical pace of government adaptation.
 
What it means for you: If this happens, your planning assumptions largely hold. But I would not build a financial plan that depends on government competence at this pace.
 
The Destination: Why Long-Term Optimism Is Warranted
 
Beyond these transition scenarios, there's a broader picture that I want to be clear about: the most likely long-term outcome is significantly more prosperity, not less.
 
Every historical pattern points in this direction. When the cost of a fundamental input drops dramatically—energy, transportation, communication, and now intelligence—the economy expands in ways that are difficult to imagine in advance but obvious in retrospect.
 
The businesses that survive the transition will operate at dramatically higher efficiency. New industries will emerge that we can't yet name. Consumer costs for most goods and services will fall. The entrepreneur with a good idea and basic AI literacy will be able to build what previously required a large team and significant capital.
 
The people who will participate most fully in that expansion are the ones who:
Survived the transition financially (low debt, adequate reserves, diversified income)
Adopted AI early (competitive advantage during the transition, positioned for growth after)
Maintained flexibility (liquid enough to seize opportunities as they emerge)
 
What I'm Recommending to Clients Right Now
 
I want to be straightforward about what I think prudent preparation looks like. None of these are dramatic moves. They're the kind of positioning that makes you stronger regardless of which scenario unfolds.
 
Protect the Foundation
Stress-test your income. If revenue dropped 30% over 18 months because of competitive pressure or market contraction, how many months could you sustain operations? How many months could your household sustain its lifestyle?
 
Reduce fragile debt. Variable-rate loans, high-interest obligations, anything that becomes dangerous if conditions tighten—pay it down or restructure it now while conditions allow.
 
Build a larger cash reserve than feels comfortable. The standard advice of three to six months of expenses may not be sufficient for a period of rapid structural change. I'm encouraging clients to think in terms of 12 to 18 months.
 
Position for the Transition
Diversify beyond traditional allocations. A portfolio built for the last 50 years may not be calibrated for the next 5. We should be having a specific conversation about whether your current mix accounts for the possibility of simultaneous deflation in some sectors and inflation in others.
 
Consider productive hard assets. Land, income-producing property, and tangible assets that generate real economic value tend to hold up well across multiple economic scenarios—both inflationary and deflationary.
 
Review your portfolio's assumptions. Most financial plans assume your income grows steadily, inflation stays moderate, and asset classes behave within historical ranges. Those assumptions may not hold during a structural transition.
 
Capture the Expansion
Start using AI in your business now. Not next quarter. Now. The competitive advantage of being an early adopter is real but temporary—it disappears once everyone catches up. The business owner who walks into a meeting and says "I used AI to cut this process from three days to two hours" is the most valuable person in the room.
 
Think about what you can build that you couldn't before. AI dramatically reduces the cost of expanding into new markets, new project types, new service offerings. What was too expensive or too complex to attempt a year ago that might be feasible now?
 
Invest in what AI cannot do. Relationships, trust, physical presence, judgment, leadership through ambiguity—these become more valuable as AI handles everything else. Double down on the human skills that differentiate your business.
 
How Prepared Are You? Take The 500-Year Stress Test.
 
Since you've read this far, you already know more about what's coming than most business owners. But knowing and being prepared are two different things.
 
Every technology disruption for the last 500 years has followed the same pattern: new technology arrives, fear and opportunity collide, jobs are displaced, the world predicts collapse, productivity surges, new jobs replace old ones, and economic growth follows. Every single time. The only variable is how fast the cycle plays out — and this time, it's playing out faster than any previous disruption in history.
 
The businesses that survived every previous wave weren't the ones that predicted the future perfectly. They were the ones that were financially prepared to adapt — liquid enough to ride out the shock, curious enough to move early, and clear-eyed enough to see that standing still was the most dangerous option of all.
 
I built The 500-Year Stress Test to help you find out where you stand in less than two minutes. It's five questions covering the five things that help determine whether a business survives disruption or gets swept away by it: cash reserves, technology readiness, revenue concentration, key-person risk, and exit preparedness.
 
Every business owner I've shown this to has had at least one "aha" moment. That moment is the beginning of preparation.
 
Take The 500-Year Stress Test →
Free. No login required. Takes less than 2 minutes.
If two or more of the questions reveal a gap, I'd like to schedule 30 minutes with you to talk through what it means for your specific situation — your business, your balance sheet, your plans.
 
Not to make dramatic changes. Not to predict the future. But to make sure that whatever comes, you've thought it through, stress-tested it, and positioned yourself to survive the transition and capture the expansion on the other side.
 
I'd rather have this conversation six months early than six days late.
 
Schedule a 30-Minute Business Resilience Conversation →