Episode #38: From IBM to AI: How Business Lost Its Mind and Found the Algorithm

Welcome to Stewart Squared podcast with the two Stewart Alsops. In this episode, they track the transformation of business from the IBM-dominated 1980s to today's AI-driven landscape, exploring how personal computing, the rise of the internet, and eventually search and social media changed the way companies operate. The conversation moves from early account control tactics to the disruptive power of Google Search and the monetization model sparked by Bill Gross, all the way to current questions around AI's role in search, advertising, and persuasion. Along the way, they unpack shifting cultural attitudes toward NDAs, the evolution of email protocols, and the structural consequences of tech monopolies under regulatory scrutiny. The episode features reflections on digital infrastructure, geopolitical standardization, and how a changing information ecosystem could impact future business models.

Check out this GPT we trained on the conversation

Timestamps

00:00 The Tech Landscape of the 80s: IBM's dominance, minicomputers, and the dawn of PCs.
04:10 The Rise of the Internet: How the internet began to dissolve the lines between the tech industry and the broader economy, leading to the second convergence.
09:56 Business in the Pre-Internet Era: Relying on telephones, faxes, and crucial personal connections.
16:00 The Email Revolution: How adopting new technologies like email, despite early proprietary systems, became a competitive necessity.
19:45 Standardization and US Hegemony: The US role in setting global tech standards, like email protocols, during its period of global influence in the 90s.
23:32 The Dollar as Reserve Currency: Discussing its resilience, the historical context, and the current lack of viable global alternatives.
28:20 Evolution of SEO: Tracing search engine optimization from buying search terms with Google to demographic targeting on social media.
31:50 AI's Impact on Search and Persuasion: How AI is poised to change information access and the concerning potential of AI-driven persuasion.
34:40 The End of Social Media?: My thoughts on why the era of social media's dominance might be waning.

Key Insights

1. Business Has Been Rewritten by Tech—More Than We Realize: The conversation highlights a major shift in how business has operated from the 1980s to today, emphasizing that early practices centered around monopolistic control, like IBM’s account control, have been replaced by tech-driven dynamism. The evolution of the personal computer and the internet didn’t just create new tools—they completely reshaped the rules of engagement across industries. Business norms are no longer just culturally or economically constructed but increasingly technologically defined.
2. SEO Emerged From the Commercialization of Search: Search engine optimization wasn’t inevitable—it came from the discovery that search could be bought. Bill Gross’s innovation to monetize search by selling keywords laid the foundation for Google’s eventual advertising empire. What began as an informational utility became a battleground for visibility and commerce, fundamentally altering how companies think about presence, relevance, and value in the digital space.
3. The Medium Really Did Change the Message—and the Messenger: From fax machines and FedEx to iPhones and digital maps, the medium of business communication has continually reshaped expectations and behaviors. One anecdote recounts how finding a restaurant in Hong Kong via an iPhone marked a turning point—not just in convenience, but in how information access alters our experience of place and decision-making. The mediums businesses use now define the kind of relationships and decisions they make.
4. Social Media Killed SEO—Until AI Killed Social Media: There’s a compelling argument that while SEO once ruled digital visibility, its power was overtaken by social media’s targeted advertising. But now that social media itself is fragmenting—partly due to regulatory pressure, partly due to user disillusionment—AI is disrupting both. The episode touches on how tools like ChatGPT with memory are creating individualized knowledge and influence channels, raising questions about what optimization even means in an AI-mediated world.
5. AI’s Persuasion Power Raises New Kinds of Risks: The discussion around AI agents and their potential to persuade humans touches on an underexplored frontier—how machines might be used not just to inform, but to influence. The shift from targeting groups (as in social media) to profiling individuals emotionally and perceptually introduces new cognitive security threats. What’s at stake isn’t just privacy but autonomy and belief formation.
6. Trust, Not Contracts, Built the Old VC Model: An important moment in the conversation points out that in earlier eras, venture capitalists didn’t need NDAs. The business ran on trust and reputation—if a VC violated that trust, they’d be out. This points to a broader theme: the erosion of informal norms that governed the old economy and the slow build-up of bureaucratic safeguards to compensate for declining interpersonal trust.
7. Standardization Was a Form of Soft Power: The global adoption of internet protocols and email conventions was shaped by U.S. dominance in the 90s, reflecting not just technological leadership but geopolitical influence. Standards became instruments of global alignment, akin to the U.S. dollar’s status as a reserve currency. This reveals how deeply intertwined technology, business, and power structures have become—and how changes in one domain ripple through the others.