AI Could Be the Railroad of the 21st Century. Brace Yourself.

Derek Thompson

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AI Could Be the Railroad of the 21st Century. Brace Yourself.<br>In the 1800s, the railroads took over the economy, changed the way we work, and reshaped American politics. Sound familiar?

Derek Thompson<br>Nov 04, 2025<br>∙ Paid

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“American Progress”, John Gast, 1872<br>Ours is a remarkable moment in world history. A transformative technology is ascending, and its supporters claim it will forever change the world. To build it requires companies to invest a sum of money unlike anything in living memory. News reports are filled with widespread fears that America’s biggest corporations are propping up a bubble that will soon pop. Behind the scenes, a political backlash is fomenting, as the forces of anti-oligarchy and anti-monopoly are rising.<br>Is this the artificial intelligence boom of the 2020s? Or the transcontinental railroad construction of the late 1800s?

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Between the 1860s and the 1900, the transcontinentals transformed America. They populated the west, birthed the modern corporation, turned the U.S. into a coast-to-coast dual-ocean superpower, and revolutionized modern finance. As the historian Richard White wrote in his epic history of the transcontinentals, Railroaded, “they created modernity as much by their failure as their success,” leaving behind “a legacy of bankruptcies, two depressions, environmental harm, financial crises, and social upheaval.”<br>In the 2020s, AI is already transforming America in a similar fashion, driving overall economic growth and powering the stock market to all-time highs. As a share of US GDP, the AI build-out is on track to exceed every major technology since—you guessed it—the railroads.

If artificial intelligence changes the 21st century as much as the railroads changed the 19th century, we should brace ourselves for something deeply strange:<br>The railroads changed forever the way we think and work. In Time Travel: A History, the author James Gleick suggested that the railroads so warped our sense of time and space that humankind invented the concept of time travel as a reaction to the compression of distance and the invention of time zones.

The railroads also changed the way we organized and managed work, giving rise to the occupation of “manager.” In The Visible Hand, the historian Alfred Chandler argued that the railroad (along with the telegraph) made necessary large, professionally managed corporations, thus creating modern managerial capitalism.

The railroads changed politics, by creating the modern lobbying industry and transforming the government’s relationship to the private sector. In his 19th century histories Railroaded and The Republic For Which It Stands, the historian Richard White argues that the railroads were the industrial chrysalis from which sprung from entire Gilded Age and the second industrial revolution.

Today, I’m running an edited and polished transcript of a recent conversation I had with the historian Richard White about the age of the railroads and what their history might tell us about the age of artificial intelligence. As you’ll see, the number of parallels are uncanny. Our conversation touches on:<br>Why the original goals of the transcontinental railroad had little to do with the final construction

How the politics of anti-monopoly evolved into the Progressive Era and the New Deal

How trains changed our sense of time, space, and work

Why the railroad bubble popped—again and again—and what its popping might tell us about AI

Throughout our conversation, I’m going to include annotations that connect the history of the railroads to the modern story of the AI build-out.

THE AGE OF THE RAILROADS

Derek Thompson: How did the transcontinental railroads get started? Why did we want to build them, in the first place?<br>Richard White: Initially, the reason the government financed the transcontinentals was to keep California in the Union during the Civil War. The railroads get started in 1864 when the war was still going on. But the war was long over by the time the railroads were going to be completed in the late 1860s. The transcontinentals were supposed to let the nation move goods across the continent more cheaply than it could by going across Panama. In fact, eventually the western railroads, Union Pacific and the Southern Pacific, would buy up the Pacific Steamship Company to raise rates, because they could not compete with a steamship company moving goods across the country.<br>The railroads were supposed to introduce an age of competition, individual fulfillment, and small farming. But in fact what they did is they created large corporations—both incredibly competitive and monopolistic—that controlled the economy.

“Dale Creek Bridge,” by photographer Andrew J. Russell, part of photographs taken during construction of the Union Pacific Railroad, 1864-1869.<br>Thompson : With the Pacific Railway Acts of 1862 and 1864,...