No. of Recommendations: 7
The current stock market bubble is being blamed on AI.
In China, AI is generally used to benefit the regime and the population in-general. Whether to award demerits for jay-walking or find a new medical technique, its function is what is important.
In the US, it is assumed that the biggest, baddest "last man standing" will rule. Therefore a massive amount of money is being spent to attract users who, in turn will supply (divulge) content, increasing the power of that particular AI.
The usual characters (Microsoft, Google, Amazon, X, Meta and so forth) are large enough that the billions of bucks they are buying lottery tickets with don't significantly change their finances. The hardware winners include Nvidia and more recently AMD, Broadcom and others. Taiwan Semiconductor Corp. (TSMC) will win regardless as they make a majority of everyone's chips. OpenAI, the releaser of ChatGPT (Microsoft is a major investor, with a 49% stake in OpenAI's for-profit subsidiary) will eventually go public at a substantial premium.
My major play (as indicated on the portfolio statistics I recently posted) has been on global electrical infrastructure companies which will, by definition, be involved in major portions of data center design/build (as well as grid enhancements required by AI, Crypto-mining and EV popularity).
So, while the stock market seems to be in bubble territory, while the following is likely premature as a catalyst, AI is clearly a tool to increase worker productivity (sometimes by an order of magnitude). That is a polite way of saying that jobs WILL be lost to it. While there is a lot of rhetoric about the new jobs which will open up, it's clear to me that far more jobs will be lot (many of them "white collar" acquired at great cost (in the function of US higher education cost, others held by trained individuals who may not have received the "benefits of higher education - such as truck drivers, machinists and so on).
While it is presumed that companies of all types can become more efficient, that social aspects of a large swath of our population losing their jobs over a relatively short period of time has not been adequately addressed.
We are, indeed, approaching a point of inflection where our politics, social structure, personal and national finances and so on will be dependent on virtual entities whose decision-making process will be opaque - even to their creators and presumed bosses.
I am not arguing that the market is not irrationally high, but the chaos likely to come in the foreseeable future will create extreme volatility as the market tries to separate people from their money.
Jeff
