Thankfully it feels like a distant memory now, but Covid was a very challenging time for live events, and the outlook for any business that existed to bring people together was bleak. Concerts, sporting events, theaters — every format built on gathering crowds faced an uncertain future, and a similar cloud of doubt hung over business travel. Michael Dell, the Dell Technologies chief executive, famously captured the mood by asking why anyone would leave home when they could fly across the world on “Zoom Airlines.” Public health concerns understandably kept people away from crowded venues and non-essential travel until the pandemic ended. But the longer-term assumption was more consequential: that life and work would remain fundamentally changed, and that the so-called experience economy was headed for a major reset.

The experience economy as traditionally conceived is indeed undergoing a seismic shift — just not in the way forecasters imagined. As long-time investors in the space, my colleagues and I at Providence Equity Partners, a private equity firm, have found that people emerged from the pandemic with a renewed appreciation for experiencing life in person. Both personally and at work, people are seeking more opportunities to come together, not fewer. They are doing so despite another wave of uncertainty, this time driven by the rise of AI, which has once again prompted projections of a changed, digital-dominant world. Yet demand for experiences that bring us together “in real life” is booming.

So why does conventional wisdom keep missing the mark? The answer, in our view, lies in the rise of what we call the “IRL Economy.”

The experience economy — a term that gained currency in the late 1990s — gave a name to the age-old tradeoff between buying goods and buying experiences long before AI entered the picture. The IRL Economy does not follow the same zero-sum logic. It is rooted in a deeper set of forces: humans are hardwired for connection and community, and this need is remarkably durable. The stronger the push toward a frictionless, digital-first world, the stronger the pull toward real life. Seen through this lens, rising demand for in-person connection amid the rapid expansion of technology is not a contradiction — it is exactly what we should expect, and it is what we are witnessing.

Providence estimates that the market for concerts and theater, live sports, and trade shows — roughly $700 billion in 2024 — could grow to about $1.0 trillion by 2030, an increase of nearly 50%. One telling example comes from a corner of the IRL Economy that has been repeatedly out: in 2025, more than 17.5 million people attended a show at one of London’s West End venues, the famed theater district, nearly 15% above pre-pandemic levels. A format once thought to be in structural decline has not only recovered but is now attracting record audiences.

There are many reasons for this momentum, but two stand out. First, the world is in the middle of a global reassessment of what a healthy relationship with technology looks like. The conversation gained steam in the context of social media, and it is now intensifying with the proliferation of AI. A growing body of research — including the U.S. Surgeon General’s advisory on social connection — points to in-person connection as a fundamental pillar of health, increasingly viewed as essential alongside exercise and nutrition. In turn, much of what was once considered discretionary is being recategorized as something closer to non-negotiable, as a source of connection and community.

Second, technology is making time spent in the real world more visible, shareable and, in some cases, even profitable. People want to get out into the real world in part because they can share it. Some of the most engaging online content today features people documenting what they are doing offline: the concerts and sporting events they attend, the restaurants where they eat, the places they travel. This is as true for casual, everyday users of social media platforms as it is for paid influencers. In that sense, real-world experiences enrich digital lives by giving people something worth sharing from their phones or computers.

That positive feedback loop is fueling soaring demand and creating a powerful engine of economic growth. Like the AI buildout, the expansion of the IRL Economy will require substantial capital to build and modernize venues, bring successful concepts to new markets and create entirely new offerings.

Where the two differ, interestingly, is in how that growth is distributed. Much of digital media broadly, and the AI industry specifically, is concentrated among a relatively small number of dominant players. The IRL Economy, by contrast, is largely decentralized, creating opportunities for businesses and communities across the country and indeed throughout the world. At least 28,000 companies in the U.S. have as their primary function staging live performances, running spectator sports, promoting events or organizing trade shows. In other words, there are no hyperscalers of the IRL Economy.

There are large companies, to be sure, such as Live Nation, the live-entertainment giant. But some perspective is in order: despite attracting scrutiny comparable to that directed at Big Tech, Live Nation’s market capitalization is a fraction of Google’s. Behind every live event sits a vast, complex network of businesses spanning production, logistics, staging, technology and venue operations, many of them relatively small and specialized. The result can be stronger companies and better choices for consumers and enterprises alike.

As with any part of the economy, there are risks. Legitimate concerns exist about seemingly limitless ticket price increases making events less accessible, and the drive to build ever more high-end hospitality could come at the expense of the shared game-day experience. Those who try to exploit their fan base will probably get burned. But the underlying demand is not going away.

That is why the simultaneous rise of AI and the IRL Economy may be one of the more consequential economic developments of our time. The two are often framed as competing forces, but something more interesting may be underway: each may reinforce the value of the other. And for all the amazing accomplishments of AI, it will never replace human nature.

A screen can give us extraordinary access to information, entertainment and one another, but it cannot reproduce the feeling of being in a stadium when the home team scores, hearing a favorite artist in a packed venue or connecting with a new business partner over coffee instead of over video conference. Consumers and companies appear to understand this intuitively. The more abundant digital interactions become, the scarcer genuine human connection can feel. Those who create compelling reasons for people to come together in the physical world have an enormous runway ahead.

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This story was originally featured on Fortune.com.