Item — HN Reader

The analogy assumes you already know where the gold is.

Right now companies are spending a ton of money trying to find gold, and that costs capital. That's why they're slapping the word "AI" onto everything to see if it sticks. And re:

> a toolmaker can't be making more money then the companies using those tools to make money.

Every historical gold rush has had exactly that happen which is the point of the analogy. You have a bunch of broke pioneers, a few people that struck it rich on their stakes, and then a saloon owner that rakes in steady income from alcoholic prospectors.

In the historical gold rush, you also had speculators funding prospectors. That might just be personal savings, friends and family or investors. Similar to the current AI rush, you have VCs and corporate profits from companies pivoting into AI that, theoretically, could all go bust. But there still is a whole lot of capital to expend even if the investments are never profitable.