No. of Recommendations: 3
Then: how does the future of that company look? Eliminating the circularity and seeing that the capex rate is around two orders of magnitude higher than revenues, I think the issues would be much more evident.
The issue here is that you can think of this "All AI" company as a newcomer to the world. If its profits are to support its capex and ultimately market cap, then at some point it has to have commensurate revenues and ultimately profits. How big is that number in 5-10 years? This composite company's revenue is someone else's expenditure. Where the heck are those going to come from in the real economy?
Exactly
You cannot recommend a post more than once!
Unfortunate.
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To what extent does the manipulation and acting upon information contribute to the economic activity? How much is manipulation of information worth now? How much intelligence does it require? How much does it cost to acquire that intellect, human or otherwise? How does AI economic activity flow back into the broader AI sector, and broader economy? How much is intellect worth once it has been commoditized and what is the marginal utility of additional intelligence?
There are some unsettling and uncomfortable questions that pop out when pulling on those strings, and some are a bit bigger than investing or macroeconomics in nature.
