How Time Became the Next Great Asset Class

In 1915, a Wall Street analyst named Benjamin Graham saw an opportunity. Guggenheim Exploration was trading as a single stock, but it held shares in multiple copper mining companies worth far more than the parent company’s price. Graham bought the undervalued parent, shorted the overvalued components, and waited. When the structure dissolved, he captured the spread exactly as he had hoped (and projected). Everyone was happy, especially Graham.

That trade launched Graham’s career and established him as the de facto father of value investing. Over the next several decades, his Graham-Newman Partnership would generate above-average annualized returns by doing one thing very well: finding inefficiencies in markets and moving fast enough to capture them before those windows closed.

From 1980 through 2003, Graham’s most famous protegee, Warren Buffett, used the same arbitrage principles to produce Berkshire Hathaway’s own above-average annualized returns. He did that by taking a page from Graham’s playbook: find investments with spreads between what it’s trading for today and what it’s worth tomorrow, then monetize the difference.

Financial markets are built on spreads, the differences in price, risk or timing that smart investors use to create value. The best investors do not invent opportunity. Instead, they look for market inefficiencies and move fast enough to capture them before the market corrects.

Now, a similar kind of spread has opened up in the daily lives of people and businesses.

That difference, the time spread, can be captured, reinvested and compounded.

And it has nothing to do with currencies, stock markets or interest rates. It’s about the spread between what something once cost in time spent and what it costs now in time saved in the age of Gen AI.

Gen AI is giving people and businesses the capability to produce more, faster and better, with less time and effort. That difference, the time spread, can be captured, reinvested and compounded.

It is the newest form of asset class: time arbitrage.

The Economics of Time Arbitrage

In financial markets, arbitrage works because inefficiencies exist. In everyday life and business, inefficiency exists too. It shows up as friction. The waiting and reworking, the different hoops to jump through, the endless clicks and scrolls, approvals that take days and weeks to finalize, the hopscotching between apps and web sites and forms. It all amounts to the waste of the most precious of human assets: our time.

Consider this from the business perspective. The average U.S. worker earns roughly $45 an hour and works roughly 1800 hours a year. If Gen AI eliminates just 15% of their low-value effort, that’s 270 hours of time returned per person. Or, using this formula, about $12,000 in annualized value for each worker.

Across 163 million U.S. workers, that’s more than a $1.9 trillion productivity dividend, equal to 6.4% of the U.S. GDP. In other words, time that can be released for other productive work which can, in turn, boost GDP.

To paraphrase the immortal words of Muhammad Ali, that ain’t nothing.

Consumers experience the same phenomenon in their daily lives.

Each year, they spend three hours just opening apps, and another six managing billing errors, rescheduling appointments, and fixing travel plans.

That’s a more than a full workday of lost effort every year.

Gen AI will erase much of that lost time, compressing mundane tasks into milliseconds.

Gen AI can eliminate much of that, compressing mundane tasks that took hours and days into milliseconds.

Those reclaimed hours are the time spread, whether they are coming from improved business productivity or greater consumer productivity. They are the fuel for new value creation.

So, there is no longer the question of whether we’ll save time. We will. The question becomes how people, businesses and the economy will reinvest it.

Time as the Next Asset Class

Time has always been finite, but Gen AI has made it more liquid. It frees trapped capacity the same way financial innovation once freed trapped capital.

Benjamin Franklin said, “Lost time is never found again.” But in a Gen AI-powered world, time can, in a sense, be reclaimed, multiplied and redeployed.

Time arbitrage turns hours into capital that can be redeployed. Just as compound interest transformed investing, compounding time will transform productivity and creativity. Every hour saved using advanced AI becomes an hour that can be reinvested. In learning, invention, spending time with family, training a new pup, reading a book or doing absolutely nothing at all.

And as with financial capital, the real advantage comes not from saving time, but from what consumers and businesses do with those extra hours.

The New Market Makers of Time

In finance, market makers create liquidity. They match buyers and sellers, price risk, and profit from the spread.

In the time economy, the large language models such as GPT, Gemini, Claude, Mistral, and others are the new market makers. In a sense, they set the “exchange rate” between human effort and machine output.

The real advantage comes from what consumers and businesses do with those extra hours.

A prompt can be thought of as the bid. An answer, design, video, ad copy or insight is the ask. Each interaction defines a new unit of efficiency. How much time it takes to achieve a result.

ChatGPT turns a two-hour analysis into two minutes of synthesized context. Copilot organizes and prioritizes an overflowing inbox. Gemini drafts an investor brief or product roadmap in real time. Perplexity and Claude summarize hundreds of pages in seconds. All of these models are exploring how to monetize the spread in different ways, through subscription revenues or transaction fees on ecommerce purchases and on advertising.

These models don’t just perform tasks; they create liquidity in  time and they will monetize the friction they reduce or eliminate. And by doing that, they give every worker, creator and consumer a personal time arbitrage opportunity. And those models a way to monetize the spread.

How Businesses Monetize the Time Spread

Despite media hype to the contrary, the most sophisticated companies aren’t just asking, “How do we save time?” They’re asking, “How do we reinvest our collective workforce capacity to become a different company?” Part of the answer may be that they don’t need as many workers, who then become available for other companies that do.

When Klarna reported that it had deployed AI agents to handle customer service inquiries, the company claimed to have freed 1.4 million workhours annually. It said that it reallocated that capacity into fraud prevention innovation, new product development in business banking, and advanced credit risk analytics. Klarna claims that the value of that time arbitrage resulted in an estimated $40 million of annual profit improvement.

AI revolutionized vaccine development by turning years-long processes into weeks using advanced algorithms. Moderna used them to develop its COVID-19 vaccine in just 42 days using 750+ active AI models. Pfizer’s Smart Data Query system analyzed data from 44,000 trial participants in real time, cutting trial validation from 30 days to 22 hours. These data-driven efficiencies compressed vaccine development to under 9 months, setting a new benchmark for AI-powered biomedical innovation.

And new capacity for innovative thinking.

The same workforce doesn’t do 15% more of the same work. It may do entirely new work that generates returns.
Consumers as the New Supply Side

Platforms like Uber, Lyft, Door Dash, Fivvr and others give consumers the ability to monetize idle capacity, on demand and as it suits them. Marketplaces and streaming platforms like Amazon, eBay,  Etsy, and Spotify provide distribution for microprenuers to create and make sales. Gen AI has the potential to expand consumer capacity for those platforms and others by monetizing their “time equity.” Every free minute becomes a new potential opportunity for personal, business and economic growth.  They are expanding the supply of ideas, products and services that fuel growth.

Consumers don’t just create demand for products and services anymore. They create supply and do that at scale. The solopreneur building a brand on new found evening hours. The student launching a micro-SaaS business with weekend capacity. The retiree turning expertise into an AI-powered consulting practice. The single mom converting wait time at her daughter’s dance classes into a side-hustle.

It’s a flywheel: Gen AI saves people time. People reinvest that time into creation, education or starting new businesses. Those outputs feed demand for smarter and better tools. Smarter tools save more time. More time equals more creation, education, businesses and business outcomes.

In the industrial economy, supply was constrained by labor. In the time arbitrage economy, supply grows with every person who reinvests their time.

McKinsey research suggests that if U.S. businesses shifted from extracting time savings as cost reductions to reinvesting them to support innovation, the economy could generate an additional $2 to 4 trillion in new output by 2030. Not from working more hours. From monetizing the time arbitrage. The space between what used to take days and what now takes minutes.

More Failures Faster

Companies that use Gen AI only for cost reduction will see diminishing returns. The ones that reinvest time into innovation, using automation and autonomy to fund experimentation, R&D and creativity, will reap the benefits of the compounding of time across their workforce.

This creates a compounding effect that traditional ROI doesn’t capture. Companies don’t just get more innovation per dollar; they get more kinds of innovation. From more people. With more perspectives. And that opens the door to bigger, more diverse breakthroughs.

Return on Innovation is measured by how much more time can be spent moving from an idea to a finished product.

That’s the new kind of ROI, Return on Innovation, measured by how much more time can be spent moving from an idea to a finished product.

When projects that once took months can now be tested in days, failure becomes affordable. When experiments cost hundreds of dollars instead of hundreds of thousands, people and companies are more willing to take calculated risks. When the time from idea to prototype shrinks from quarters to days, innovation stops being something only special teams do. It becomes part of everyone’s job, happening all the time, across the organization.

With Gen AI, it’s possible for people  work at the speed of their ideas. Previously, the lag between conception and manifestation created friction. Someone would have an idea, spend hours bringing it into being, getting consensus and building the business case. By the time they saw it realized, the thinking had moved on. Maybe so had the market opportunity.

Time arbitrage makes creativity move in parallel streams. People can explore multiple paths at the same time. Test assumptions in real-time. Follow hunches without committing days and weeks to what could turn out to be dead ends.

The Aha Moment and the Reordering of Time

In a February 2025 Scientific American article, researchers published a study of the neuroscience of “aha” moments. We’ve all had them. The new idea that pops into your head out of the blue. On a run, or while making dinner or walking the dog. Scientists say that these flashes of “brilliance” are the result of a burst of high-frequency activity in the right temporal lobe, that palm-to-the-forehead moment that envisions a new twist or unsticks something that felt stuck. The brain, having stopped focusing on the task at hand, responds to being unincumbered by reassembling old information in a new way.

Gen AI has the potential to create more of those moments. By handing off the mundane parts of day-to-day management at home or at the office, people can use their time arbitrage to focus on new thinking. Gen AI doesn’t create the aha moment, but it could give more people more opportunities to have them.

The Future of Time as Capital

Ben Graham spent his career teaching investors how to turn a dollar into two. He taught them to calculate intrinsic value, identify the spread and capture it before markets corrected. His students, like Warren Buffett, built fortunes on this single insight: inefficiency is an opportunity that can be monetized at scale.

People can use their time arbitrage to focus on new thinking.

Graham died in 1976, decades before ChatGPT, Claude or Gemini existed. But he would have understood the impact of those tools on his thesis.

The greatest market inefficiency we’ve ever seen isn’t in commodities or finance. It’s in how human time is valued and spent. Time has always been the scarcest yet most ubiquitous form of capital. Every person has a supply of time to spend. Now time is becoming the most liquid. In the Gen AI era, reclaimed time can be found, multiplied and reinvested.

What used to take hours now takes minutes. What used to take days now takes hours. What used to require teams now requires prompts. The spread between old time costs and new time costs is massive. And it’s available to anyone with access to these tools.

The question for every person and business is the same one Graham and his protegees asked about every investment: How to capture and reinvest the spread?

For individuals, the return is new opportunity. For businesses, it is a new source of competitive advantage. For economies, it is the compounding effects of innovation with the potential to touch everyone and deliver change. At scale.

 

How will you spend your time? Until NEXT time.

Join the 18,000 subscribers who’ve already said yes to what’s NEXT.

 

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