Be kinde to folk. This changeth the whole habitat.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 6
A massive amount of investment is taking place by the nations largest companies in AI (frequently on a incestuous basis) with little revenue coming in from those investments.
If AI, writ large, is successful, assuming there are any consumers left after potential mass layoffs, the companies who bet large on the right horses could control much of the economy of the US or the world.
These companies have generally been cash cows, but are now taking on debt in order to continue pouring money into AI ventures.
These companies are this decades "too big to fail", and if their horse doesn't come in, my guess is they will take a hell of a beating. At some point, I'm guessing they will ask for government backup to their bonds. That would put them into a "heads I win, tails I lose" with respect to the US taxpayer.
I there money to be made? Sure, there are piles of other people's chips all over the roulette table. Is there money to be lost? Yes, if the number with their chips doesn't come up and you have to bail out the bettor. Of course, if the bettor wins, there is no assurance that the increase in performance per employed worker is not at the expense of vast number s newly unemployed (and potentially unemployable in the new AI managed economy.
That trillion bucks that OpenAI is worth - despite its problems getting paying clients - and that's only the tip of the iceberg.
Jeff
No. of Recommendations: 22
Jeff,
Yes, your assessment is what many of us investors are seeing. It is in the too hard pile for me regarding making investments in the AI space.
However, AI is doing some amazing work for our little business. I was blown away recently by the volume of work it is doing in marketing research as well as other tasks in our fifteen person business. I have personally been using AI for product design work and it is enabling me to go far and fast in evaluating potential materials, rates of change under differing conditions and lots of other stuff being modeled that would have taken me 5X or more time to do. In our company's case, there are no job reductions, only more high value work being done.
My sense from these experiences is it may be an extinction event for those companies of all sizes who do not leverage the advantages of AI. Like you, I do not see how these AI companies make sufficient money to fund the AI "gift" presently being given to companies and to folks like us who use it. I'll let them deal with how to make money. For now, AI is doing wonders on my non-investment (the actual usage of AI) side of the ledger.
Thoughts?
Uwharrie
No. of Recommendations: 5
I admit to AI potentially increasing the productivity of personnel at all levels of a company. In some cases, this will cause those companies using AI to excel at the expense of their competitors. The challenge will be taking a national audit to see how many physical employees are required in total.
But lets put the social aspects on the side.
WendyBG just posted the following:
https://www.shrewdm.com/MB?pid=222445586&wholeThre...It is her concern that it is not the company's say-to-day business which creates risk, but rather the vast amount of debt which is being generated - and potentially hidden from most casual observers. It is the potential for these loans to overwhelm parts of our economy deemed "too big to fail" which she feels may be the catalyst for a major market upheaval. It is a similar case of misdirection to what fractured the market a couple of decades ago.
Jeff
No. of Recommendations: 2
I work at a software company, and can confirm that demand for AI technology is very high - so I don't expect a major issue with earnings in this sector for the short term; there are questions about the value it will provide long term however (IMO).
Some risks
* Companies don't get the return on the investment they need, and cut back spending in this area
* Results in a overbuild of infrastructure
* Results in a big issue for those that invested heavily in that infrastructure (not just the hyper scalers)
tecmo
...
No. of Recommendations: 1
In our company's case, there are no job reductions, only more high value work being done.
How much more value? In other words, what's your ROI? Did revenues/profits go up by 10%? 20% 30% since beginning to use the AI?
