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From Coal to Code to Creativity
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04 June 2025
How IP Fuels the AI Revolution
- Ideas have driven progress throughout history, and today they are the foundation of the IP economy.
- Intellectual property (IP) is now the most valuable resource, powering AI much like coal fueled the Industrial Revolution.
- AI depends on high-quality human-made IP to generate meaningful outputs, making IP the new reserve currency.
- The rapid growth of AI has sparked an IP crisis, with copyright infringement and expropriation threatening creators.
- To ensure sustainable growth, we must create systems that protect IP and incentivize its fair use in the AI age.
Welcome to the IP Economy
Ideas have always been the engine of human progress—but today, they’ve become the economy's central resource. Ideas tamed fire in the plains of Africa, and ideas melted iron in the blast furnaces of Youngstown. Ideas catapulted us into the skies, made us cross the endless waters, let us scrape the skies with fingers of steel. Ideas ease our pain, they let our loved ones live, and they guide us to a better future. Ideas are and always were the decisive tact in setting forth mankind.
In the 21st century, ideas have become the most valuable resource in the world: intellectual property (IP). It’s not oil, it’s not gold, it’s not silicon—it’s IP that propels our economies and forms the bedrock of the future order: the IP economy. That’s because IP is no longer manually made by people to be manually consumed by people; IP is now also made automatically by machines and consumed automatically by machines—the most powerful machine the world might ever see: artificial intelligence (AI).
Behind the backdrop of the AI revolution, a new economy unravels in front of our eyes, with IP bound to become its lingua franca, its reserve currency. The first movers of this new order will not only be their founding fathers but will also shape the market structure. Now’s the time to build the trading rails, the onramps, and offramps to this new economy and help shape a system that incentivizes sustainable value creation over large-scale expropriation. One thing is sure: IP’s inevitable.
History shows that each new economic era is built on three elements: a transformative resource, revolutionary distribution systems, and a defining technology. The advent of a new market usually leads to a crisis in the early stages of the economy, where the first movers of the stage exploit on a large scale.
The Industrial Economy: Coal, Blast Furnaces, and Railroads
The Industrial Revolution introduced mechanical production, creating unprecedented growth and scale. Human labor was no longer decisive in crafting physical goods: the productivity ceiling grew to unimaginable heights when machines could spit out physical goods at a rate that not hundreds of human workers could produce.
Coal became one of the most sought-after resources during the Industrial Revolution, as it was needed in large amounts to generate energy that would power steam engines, locomotives, blast furnaces, and a whole arsenal of other machinery. Hungry for coal, the mining towns boomed, and with it, an entire system of railroad tracks sprang up as the distribution network of the new industrial economy.
The crisis of this industrial economy resulted from monopolization and power asymmetries between factory owners and workers. 16-hour shifts, insufficient safety procedures, and low wages dominated the workers' lives while owners built bigger, more centralized business empires with their factories. As an answer to these issues, the worker began to organize, forming unions that would give a voice to their plight.
The Digital Economy: Data and Networks
Not more than a century later, the advent of the Internet, paired with advances in personal computing, turned the industrial economy, which was mostly focused on the production of physical goods, into the digital economy. From the dotcom bubble to the rise of Netflix, the digital economy introduced the scalability of digital goods, which would yield social media platforms and other apps immense returns on their investments.
The main resource needed for the flourishing of the digital economy was data: social networks soon became profitable businesses, as they were able to capture an immense amount of manual, user-inputted data and generate metadata about their usage behaviors. As companies were increasingly able to use data for their business goals, data analytics was considered one of the most important disciplines for growth.
The distribution network of this era was the Internet. Its rapid expansion mirrored the railroad boom, linking billions of users globally. With widespread networks, data became the digital oil that fueled this economy.
The digital economy crisis also culminated in monopolization and expropriation. Large tech conglomerates like Meta, Alphabet, and Amazon were able to consolidate their power to shape the economic realities of creators, manufacturers, and consumers worldwide.
The IP Economy: Intellectual Property and AI
Today, AI represents the Industrial Revolution of the knowledge society. Just as blast furnaces turned coal into steel, models from OpenAI, Anthropic, and others are transforming intellectual property into infinite creative outputs. The shift to the IP economy has made IP the most valuable resource of our time.
But what sets IP apart from data? Unlike raw data, intellectual property refers to creations of the mind—original ideas, art, music, writing, and inventions. While the machines of the early digital age were always able to produce and consume data, they were not able to intelligently come up with intellectual property. This changed with the advent of AI: Suddenly, there were large language models that would create songs, movies, articles, posts, and much more.
For Al to generate meaningful outputs, training on high-quality, human-made IP is required. The more ideas Al consumes, the better it becomes at creating new ones. That’s why we can refer to this as the IP economy.
The crisis of the IP economy comes in the form of expropriation and copyright infringement. As large language models grow, the strategies for obtaining IP for training become more aggressive, leading to copyright infringement in millions of cases. The legal system, designed for a slower, analog world, cannot keep pace with AI’s rapid evolution. This development worsens, disincentivizing IP holders and IP creators to publish creative content. A tragedy of the commons looms over the rise of the IP economy, and the time to lay the foundation for sustainable growth is now.
Coda
As this article has shown, the revolutionary shifts from industrial to digital to IP economy have similarities that cannot be ignored. Learning from the past might help us ensure that the rising economy, and IP as its most important resource, grows in a fair and sustainable manner. On the bright side, ideas become the new reserve currency of the economy to come, and if you’re diligent about your own intellectual property, the possibilities are endless.
Welcome to the IP economy.
