We've Been Here Before: Let There Be Light and Lessons of Electrical Revolution

The lights flicker. The Wi-Fi drops. Your laptop battery dies. Suddenly, life grinds to a halt. It's a reminder of how dependent we are on electricity. What we take for granted today would have seemed like magic to someone 150 years ago. Yet the transition from gas lamps and steam power to electric “everything” was not a walk in the park. Inventors’ battles, labor unrest, and completely new ways to work were the reality of the day - sound familiar? What might we learn from the Electrical Revolution of 1870 - 1914 to inform our experience of the AI Revolution of 2025?

Edison Met His Match and Went to War

Once upon a time (or in the 1880s-1890s, to be more precise), Thomas Edison's direct current (DC) system was battling Nikola Tesla and George Westinghouse's alternating current (AC). This became known as the "War of the Currents." Edison, convinced his DC system was superior, went to publicly electrocute animals to demonstrate AC's dangers. How cruel! This might have been the original "fear, uncertainty, and doubt" marketing campaign! 

But Tesla's AC system had an advantage - it could transmit power over long distances efficiently. By 1893, Westinghouse's AC generators lit up the Chicago World's Fair, and the battle was pretty much over. The superior technology won, but not without a messy transition that split the industry and confused consumers. 

In 1920, just 35% of American households had electricity! And by 1929, almost 68% of American homes were electrified. If you don't count farms, about 85% of Americans had electricity by the end of the 1920s. The urban-rural divide was big. Of the roughly 6.3 million American farms in 1922, only about 3% had electricity (hence the culture of rising with the sun and finishing the day at sunset).

This revolution’s “tactic” was to replace candles and gas burners with light bulbs - a far safer way to bring light to society. However, it also had cross-sectoral ramifications through what economists call "distributed power." Before electricity, factories were organized around a single steam engine that drove all machinery through an elaborate system of belts and shafts. With electric motors, each machine could have its own power source. This enabled changes to factory layout and the assembly line production that would define the 20th century. And working days could be extended beyond sunset as lighting could safely and efficiently be brought to workplaces.

There were clear winners, losers, and plenty of unintended consequences: 

• New occupations: Electrical engineers, power plant operators, electricians, appliance repair technicians, and utility company managers became essential professions. Factory supervisors emerged to manage the new electrical production systems. Customer service representatives appeared to handle the complex billing for this new utility.

• Changed roles: Traditional craftsmen had to adapt to machine-paced work. Factory workers needed to learn electrical safety protocols. Office workers had to learn to use electric typewriters and lighting. Household work changed for good with electric appliances.

• Job displacement: Gas lamp manufacturers, candle makers, and ice delivery men saw their industries vanish. Traditional blacksmiths were for the most part replaced by factory metalworkers. Horse-related occupations declined as well with the electric streetcars taking over urban transportation.

Along came labor unrest. Workers struggled with the demands of machine-paced production. The famous 1919 steel strike involved 350,000 workers protesting the 12-hour shifts that electrical production had made economically attractive for steel companies.

Yet new forms of workers' organization emerged too. The American Federation of Labor (AFL) adapted its strategies to organize factory workers, and the National Electrical Workers Union (later IBEW) was founded in 1891 to protect workers in the new electrical trades.

Let’s Welcome the Modern Manufacturing

In 1913, Henry Ford combined electric motors with assembly line production. It changed manufacturing forever. Yes, he deployed a mechanical innovation, but its success depended entirely on electricity. Conveyors roared, power tools whirred, and the assembly line, with other time-saving devices, started rolling. Productivity is unleashed! The Highland Park plant brought in a whole new paradigm to manufacturing because electric motors could power individual stations along the assembly line. This innovation reduced the time it took to build a car from more than 12 hours to one hour and 33 minutes. The productivity came with a human cost. In 1913 alone, Ford had to hire more than 52,000 workers to keep up with attrition as the workers hated the factory line. To have a steady workforce of 14,000 is needed to keep production constant. This is an attrition rate of 380%! Workers hated the monotonous, machine-paced work and quit! Ford's response? He upped the company's wage to an unheard-of $5 per workday (more than double the going rate for factory workers), hired immigrants, trained them for required skills, and even taught them English in Ford’s school.

The Power (Literally) Behind the AI Revolution

Today's AI transformation has the same challenge: electricity. In the 1910s, we needed massive electrical infrastructure to power assembly lines. Likewise, the 2020s are all about having enough electrical capacity to power AI data centers. These data centers are power-hungry. A single large language model training run can use as much electricity as thousands of homes consume in a year. ChatGPT's daily operations require roughly the same amount of electricity as a small city, consuming over half a million kilowatt-hours daily to handle approximately 200 million requests. This power hunger is driving what some experts call "the greatest electrical infrastructure challenge since rural electrification."

And in the modern version of the "War of the Currents," the tech giants are racing to secure power agreements, with some companies paying premium rates for dedicated electrical capacity. Access to reliable, abundant electricity has become a key factor in AI supremacy.  

So what are the opportunities and challenges?

Environment: The electrical revolution relied heavily on coal, creating big environmental consequences. Today's AI boom promises solutions to climate change through better modeling and optimization, yet its training and operation consume massive amounts of energy. How do we ensure AI's electrical demand accelerates rather than delays the transition to clean energy?

Infrastructure: In the 1910s, we saw innovation in power generation, transmission, and distribution. Today's AI electricity demands are triggering similar innovation in renewable energy, battery storage, and grid management. Companies are investing in dedicated solar and wind farms for data centers, developing more efficient cooling systems, and exploring nuclear power options. Extra bonus - new industries and jobs created in the process.

Geography: During the electrical revolution, regions that had abundant water power (for hydroelectric generation) also had significant advantages. Today, areas with cheap, clean electricity are becoming the new "Silicon Valleys" of AI development. Iceland, with its geothermal power, and regions with access to solar or wind resources are attracting AI infrastructure investments. This is changing the global technology geography.

New energy workforce: Data center technicians, renewable energy engineers, grid optimization specialists, and electrical infrastructure planners are among the fastest-growing job categories. The AI power revolution is creating new specializations in energy-efficient computing, sustainable data center design, and AI-optimized electrical systems. The electrical revolution led to transformations resulting in the mass hiring of electrical engineers, energy managers, and sustainability specialists. Today, utility companies are recruiting AI specialists to optimize grid operations. Renewable energy companies are expanding to meet data center demand. The intersection of AI and electrical infrastructure has become one of the most dynamic job creation engines of our time.

What Lessons Can We Bring to Today?

1. Strategy - Infrastructure Ecosystems

Then: The most successful regions during electrification weren't those with the best generators, but those that built comprehensive electrical ecosystems. Cities like New York and Chicago prospered because they invested in power generation, distribution networks, skilled workforce development, and regulatory frameworks - all at the same time.

Franklin D. Roosevelt made this issue part of his 1932 presidential campaign and worked with Congress to establish the Rural Electrification Administration (REA). Rather than simply build power systems, the REA made loans to electric cooperatives that were repaid over 30 years. This cooperative model enabled communities to pool resources and share risks - a brilliant lesson for today's organizations struggling with AI implementation costs.

Today: Successful AI transition will require building data infrastructure, developing AI literacy across all types of workers, creating governance frameworks, and encouraging cross-functional collaboration. It also requires securing reliable electrical capacity. Companies should think more strategically about energy partnerships, renewable power agreements, and sustainable computing practices.

2. Policy - Managing the Transition

Then: In the early 1900s, few standards targeted health and safety in the workplace. Lack of federal regulation and (often) unresponsive legal system left workers with little recourse when injured on the job. But as electrical machinery proliferated, comprehensive safety laws emerged. Workers' compensation laws at the state level, together with the Occupational Safety and Health Act at the federal level, have contributed to making working conditions much safer in the US. Business leaders like John D. Rockefeller Jr. also drove change, creating institutions like Industrial Relations Counselors (IRC) that pioneered welfare capitalism and established the field of personnel management. 

The challenge was balancing innovation with protection. Too much regulation could stifle technological progress; too little could lead to worker exploitation and social unrest. Successful policy approaches during the electrical era included:

• Safety standards that evolved with the technology, rather than trying to predict all risks upfront

• Worker protections that provided economic security during the transition period

• Educational programs that helped workers develop new skills (like electrical safety training)

• Cooperative structures (like the REA cooperatives) that shared both risks and benefits

Today:  If we are to learn from the electrical era, successful policies need to be adaptive, inclusive, and focused on building capabilities rather than just preventing harm. How do we protect workers from AI displacement while encouraging innovation? How do we ensure AI's massive electricity demands don't undermine climate goals? How do we ensure access to essential infrastructure? How do we balance private innovation with public benefit? How do we manage environmental impacts while encouraging technological progress? The answers are impacting everything from renewable energy incentives to data center zoning laws to international AI competitiveness strategies.

3. Programs - Skills Development

Then: The electrical revolution required massive educational programs to help people adapt to new technologies. Appliance manufacturers hired home economists to educate consumers in using the new electrical household devices. Home economists wrote instruction manuals, marketing materials, and recipes. The REA tried to spark rural Americans' interest in electrification with educational outreach like the Electric Circus, a traveling carnival-like event to teach rural families about electric appliances.

This wasn't product training. It was comprehensive skills development. To be able to use electric appliances in the home, rural women began to learn about science and electricity. These fields were often restricted to men at the time. Universities developed entirely new curricula around electrical technologies. From the beginning, Iowa State's program was built around a fundamental assumption that women could and should acquire a practical yet scientifically based understanding of household technologies. Faculty created a context in which coeds were required to take apart and reassemble machinery to appreciate details of its construction, operation, and repair.

The scale of this educational effort was enormous. It was a systematic approach to upskilling an entire society for the electrical age. 

Today: Organizations need similar comprehensive approaches to AI literacy, combining technical understanding with practical application skills. But there's an additional layer: energy literacy! As AI becomes central to business operations, understanding the electrical requirements, environmental impacts, and sustainability implications of AI systems becomes ever more important for responsible deployment.

Measuring Transformation

In the U.S. from 1870 to 1880, each man-hour was provided with .55 hp. In 1950, each man-hour was provided with 5 hp, or a 2.8% annual increase—a nearly ten-fold increase in power per worker over 80 years.

Manufacturing productivity grew as electric motors replaced steam-driven belt systems. Assembly line efficiency increased dramatically with electric power at each station. Urban productivity jumped as electric lighting enabled 24-hour operations.

Price reductions were just as dramatic: in 1908, the Model T was priced at $850, but by 1914 it sold for $490, and by 1924 the price had dropped to $260—a 70% price decline in 16 years, enabled by electrical manufacturing.

Modern metrics show similar patterns for AI:

• Knowledge worker productivity increases in AI-assisted tasks

• Cost reductions in content creation, analysis, and routine cognitive work

• Time savings in research, writing, and data processing

• New role creation in AI ethics, human-AI collaboration etc.

• Massive job creation in AI-electrical infrastructure. This includes data center construction, renewable energy development, and grid optimization

• Electrical demand growth - the AI electricity demand from AI-optimised data centres is projected to more than quadruple by 2030

Modern Challenges. Evergreen Insights

Perhaps the most important lesson is that technological transformation isn't just about technology but rather about the social systems that had to evolve around it. The effort was successful, as the percentage of electrified farms grew from only 3.2% in 1925 to 90% by 1950. Installing power lines was important. But it also required cooperative financing, systematic education, and new social institutions.

Transformation creates both displacement and opportunity. While some jobs disappeared, the overall effect was job creation on a massive scale. Electric power enabled new industries, new business models, and new forms of work. 

Most importantly, the electrical revolution succeeded because it enhanced human capabilities rather than simply replacing them. Electric tools made workers more productive. Electric lighting enabled longer and safer work. Electric appliances freed time for other activities. AI's most promising path likely follows a similar pattern. It augments human intelligence rather than replacing it entirely.

But there's a big difference: the electrical revolution's environmental costs became apparent only decades later, while AI's electrical demands coincide with urgent climate imperatives. AI's massive electricity appetite is accelerating the development of renewable energy, more efficient computing, and smarter electrical grids. The question is whether we can manage this transition fast enough to avoid the environmental mistakes of the past. 

Yes, humans always figure out how to navigate technological transformations. The key is remembering that while technology shapes the future, humans determine how that technology gets used. 

Before we go - a fun fact. The AC/DC band's name comes directly from the "War of the Currents." The Young brothers chose "AC/DC" after seeing it on their sister's sewing machine, which could run on both alternating current (AC) and direct current (DC). Over 150 years after Edison and Tesla's electrical battle, their competing technologies live on. Rock and roll! 

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This is the seventh post in our year-long series "We've Been Here Before." Subscribe to our newsletter to receive monthly insights about historical transformations and their lessons for the AI age.