XCON goes into production at DEC

A VAX minicomputer in 1980 was ordered as a list of parts, and getting the list right, the right cables, the right backplane slots, the right power supplies, took a technician days and was often wrong. John McDermott at Carnegie Mellon wrote a program that did it from rules. R1, later called XCON, went into use at Digital Equipment Corporation in January 1980 with about 750 rules; by the mid-1980s it had ten thousand and configured almost every system DEC shipped. The company estimated the savings at $25 million a year.

XCON was the first expert system to make serious money, and it changed the question from whether the approach worked to how fast it could be sold. Companies formed to build systems and to sell the shells and Lisp machines they ran on; by 1985 American corporations were spending around a billion dollars a year on AI, most of it on expert systems.

The problem showed up inside XCON itself. Rules interacted in ways nobody could predict, and by the late 1980s DEC needed a large team simply to keep the system consistent as products changed. The maintenance cost of hand-written knowledge was the expert-systems industry's fatal flaw, and its collapse from 1987 was the second winter.