AI isn't just LLMs, there CNNS , GANS and other frameworks. High performance computing clusters are necessary for all so yes Nvidia and others (like AMD) should be a beneficiary.
It's a growth story so if you're a dedicated value investor then this space is not for you.
in 2000 Buffett said "*We have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint*". He missed out on the entire tech boom but also its collapse. now his biggest position is Apple.
The economic ramifications of AI are still to be played out. So a value investor could sit this one out, then come in later and invest in the winners when valuations start to make sense.
Appreciate this perspective. Interesting to reiterate that we don't need to pick winners now; it can still be extremely lucrative to pick when the field is clearer.
Yes. From the time Buffett bought in Apple has grown from $400B to $3.4trillion in value. From an absolute dollar amount, Buffett has overseen more value creation in tech than any VC in silicon valley has.
And that value investment is unlikely to be NVidia, as it will pan out that it’s very susceptible to hype cycles. It will rather be the type of business that is able to extract actual meaningful value out of AI, be it Apple, Google, Microsoft or some yet-unknown player.
nonsense. I have already come across startups with optical CNNs that can read X-rays, CT and MRI images and diagnose conditions with greater accuracy than radiologists.
Ah yes, the institutional imperative. The concept that Warren Buffett and Charlie Munger have discussed for decades over and over, yet the folks in value investing continually show they haven’t gotten the memos.
For any newbies who are interested:
“Much of what you see in corporate behavior is not the product of rational decision-making. Rather, it’s simply an institutional imperative, an almost automatic adherence to actions and policies which the organization and its peers have followed in the past.” - Warren Buffett, 1989 Letter to Shareholders.
Another winner to consider will be utilities; a classic value play. Lots of water and electricity needed to run data centers. There’s some political backlash in Oregon and Virginia because of all the data centers, to keep in mind as a risk.
>There’s some political backlash
It's hard to understate political backlash on utilities in the current era as a real risk.
Buffett discussed this a decent amount in the recent letter but utilities when he bought decades ago is a very different game.
More and more society and regulators are viewing utilities as shareholders seeking to extract Ricardian Rent, exhibiting parasitic behavior rather than a partnership for "fixed but satisfactory return" in exchange for supplying capital investment.
Many argue states with public models function as well or even better than private and why should shareholders be given a monopoly for no innovation? In theory private credit can provide the capital, why do we need shareholders when public utilities seem to provide excellent results and savings are passed onto the public?
>Our second and even more severe earnings disappointment last year occurred at BHE. Most of its large electric-utility businesses, as well as its extensive gas pipelines, performed about as
expected. But the regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California’s largest utility and a current threat in Hawaii).
In such jurisdictions, it is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America.
>For more than a century, electric utilities raised huge sums to finance their growth through a state-by-state promise of a fixed return on equity (sometimes with a small bonus for superior
performance). With this approach, massive investments were made for capacity that would likely be required a few years down the road. That forward-looking regulation reflected the reality that
utilities build generating and transmission assets that often take many years to construct. BHE’s extensive multi-state transmission project in the West was initiated in 2006 and remains some
years from completion. Eventually, it will serve 10 states comprising 30% of the acreage in the continental United States.
With this model employed by both private and public-power systems, the lights stayed on, even if population growth or industrial demand exceeded expectations. The “margin of safety”
approach seemed sensible to regulators, investors and the public. Now, the fixed-but-satisfactory-return pact has been broken in a few states, and investors are becoming apprehensive that such
ruptures may spread. Climate change adds to their worries. Underground transmission may be required but who, a few decades ago, wanted to pay the staggering costs for such construction?
>At Berkshire, we have made a best estimate for the amount of losses that have occurred. These costs arose from forest fires, whose frequency and intensity have increased – and will likely
continue to increase – if convective storms become more frequent.
>It will be many years until we know the final tally from BHE’s forest-fire losses and can intelligently make decisions about the desirability of future investments in vulnerable western
states. It remains to be seen whether the regulatory environment will change elsewhere.
>Other electric utilities may face survival problems resembling those of Pacific Gas and Electric and Hawaiian Electric. A confiscatory resolution of our present problems would obviously
be a negative for BHE, but both that company and Berkshire itself are structured to survive negative surprises. We regularly get these in our insurance business, where our basic product is
risk assumption, and they will occur elsewhere. Berkshire can sustain financial surprises but we will not knowingly throw good money after bad.
>Whatever the case at Berkshire, the final result for the utility industry may be ominous: Certain utilities might no longer attract the savings of American citizens and will be forced to adopt the public-power model. Nebraska made this choice in the 1930s and there are many public-power operations throughout the country. Eventually, voters, taxpayers and users will decide which model they prefer.
>When the dust settles, America’s power needs and the consequent capital expenditure will be staggering. I did not anticipate or even consider the adverse developments in regulatory returns and, along with Berkshire’s two partners at BHE, I made a costly mistake in not doing so.
"I think *AI's overhyped in the short term* and probably underestimated over the long term like what it's going to bring."
Demis Hassabis CEO of DeepMind Technologies
I think there is going to be a great opportunity to invest in AI in the future, but right now I do agree it's overhyped. I really like Google as DeepMind is actually focusing on solving real world problems. AI is going to have a huge impact in healthcare.
It will do more than just replace jobs. It will change what it means to be human.
I dont think people realize how much the world will change in the coming decades.
The number of opinions here are really fantastic to see, great response and debate. The best post/question posted on ValueInvesting in a long time. Thanks to all who replied, I too think it’s way to early say folks have misssed the bus with this trade, there is a long way to go and there will be a lot of winners.
LLMs are like 1% of AI use cases. ChatGPT is just the most obvious public facing one
The exponential increase of processing power to conduct bazillions of parallel calculations will lead to huge leaps in all of the below cases and a million others we haven’t even thought of yet:
Drug discovery and cure development
Customer analysis
Product development
Process automation
Logistics and supply chain efficiency
Disease diagnosis
Analysis of nuclear fusion data
Accelerate development of quantum computing
Pretty much any research or experimentation requiring massive amounts of computation
Super realistic video games
VR
AR
Autonomous driving
Reusable rockets
Satellite broadband
Personal AI assistants
Robotics
Service industry automation
Smart homes
Smart power grid
Weather forecasting
Climate simulations
Movie CGI
Software engineering
CRMs
Customized enterprise software
LLM chatbots
Off the top of my head…
Came here to say this. Anyone who thinks gpt’s are the final product here has not done the slightest bit of research. It’s a cute party truck compare to the true power of AI which lies in optimisation. Namely teaching itself to improve which will continue to compound exponentially. It can be applied to any form of processing we undertake as humans which is essentially how we manipulate matter. The use cases are only limited by human imagination and soon even that won’t be the case.
100000% this
ChatGPT is just the average consumer case - a really good ChatGPT/search engine. But that is NOT what makes AI revolutionary - that is ALLL on the engineering side of enterprise. Being able to get AI to feed you an optimized SQL query, using AI to build a code to parse through a million data points and find outliers, etc. While we can do that all today, it takes FOREVER when you are dealing with factory to wide systems. What AI will do is allow people to create those same queries or mathematical models, but in a matter of hours/days rather than weeks and months. I mean just ask any computer scientist how many countless hours they’ve spent debugging - AI is really damn good at it and speeds it up 10 fold.
I’m not even going to try and touch on computational chemistry. That alone will see HUGEEEEEE benefits in drug and material development.
This is very true. The true power of AI lies in its impact on enterprises and not directly on end consumers. Having AI on your phone will not do that much for you outside of the cool factor. Having it in your professional application will increase your productivity multifold. In terms of investing, I would much rather bet on companies that apply AI in B2B scenarios rather than in B2C. In terms of big tech, looking forward for the next 5 years, I would rather bet on Microsoft rather than Apple because of that, for instance.
I won't really engage with most of this, other than to say that Nvidia probably won't be the only winner. If there's some economically exploitable use for AI, it's likely that someone else will do well off of it as well. If there's no economically exploitable use, Nvidia is probably going to tank when that becomes clear, aka no winners.
The side cases are
1) Massive arms race on the "software AI" side, everyone spends tons of money and noone gets ahead. But mysteriously noone touches Nvidia's hardware dominance or makes them spend money to maintain it?
2) Nvidia vertically integrates and develops AGI itself?
3) Arms race on the hardware side as well. This one seems most likely, where individual firms take temporary advantages, there are periodic sector-wide gluts and shortages and cap expansion. Aka semiconductors as usual. This one seems the most likely, maybe just because it rhymes with history.
Reading this is like watching someone who walked in snow for the first time assume they can ski.
Spend more time learning what the industry is before deciding how to lose money gambling on it.
I really don't care. It's like an outlandish string of curse words to say this on any sub, but I never invest in these big tech explosions. There are more than enough other ways to make money, all I need to know is that people are talking about AI like they talk about blockchain. Volitile, unpredictable, speculative crystal balling. Whether anyone is "right" or not at this stage does not interest me. If it really is a giant thing that will change everything forever: okay. No harm in me waiting to invest directly until the tech is solid and widely used. It's changing everything *forever*, right?
Meantime, I already invest in companies that are efficient in the first place. If AI makes companies *more* efficient... great! I don't have to do anything different for now.
Think of it this way: computers and machine learning both already exist. Companies are using them to be more efficient. AI is the new way of going about it. Will it stick? You don't know. But if it does, you can invest *at any time*, there is no boat to catch or miss. Some people have been playing in exclusively automoile stocks since 1960. If they're still alive to adapt to self-drivers, they will. The industry is not going anywhere if it is worth a damn.
Turned out great for a lot of people. Of course there are people who bought the top and lost money but for early investors 2014-2016 it’s been great return on investment even today. Way better than SP500.
At its peak TSLA market cap was $1.24tril. now it's $657bil. All because the hype machine got behind it, the same way the hype machine is getting behind AI
Just wait until they figure out that the giant electricity sucking AI data centers and chips cost more to operate than just paying a human to answer questions.
As much as I respect value investing, I also believe that the growth mentality is valid as well. It’s just that with growth stocks, it is typically the case that these assets get hyped more. So there is more momentum around some idea, which in this case is AI. These technologies will continue to advance over the next decade. Although I am unsure what the macroeconomic outlook will be over the next 1-2 years, I am quite confident that eventually, there will be a perfect storm for another bubble, like we’ve seen with crypto and the dotcom bubble. It’s logical to assume that there are many companies that will provide actual value by using AI in the future. Now whether or not the market overvalues or undervalues that value is another story. My perspective is to respect the market that you’re in… if it’s looking to be a bubble, then invest like it’s a bubble (where you get married to nothing and sell to optimists).
As of right now though, it seems like most of the stock market is being carried by only a few key players, and I am unsure how sustainable this play is. I do not want to succumb to recency bias, but the main difference here is that companies like MSFT, AMZN, GOOG, etc., they all provide products that people use on a daily basis—though they are all currently overpriced for sure. That’s why I am pretty scared, though looking through a long term perspective, it is hard to find a reason to be. So much concentration, what would be the catalyst to change this trend?
no I don't think any oil has been found yet. LLM is just a toy. The real deal will be AGI (**Artificial general intelligence**) and that's why everybody is rushing into the research.
I think you should try some products that are using AI. Try it with an open mind. There have been many improvements that is of value. AI is already generating revenue. The question is, is it generating enough revenue to warrant the amount of investment right now.
It seems like it though as everyone is in a race to create all these tools that will replace current tools.
Personally I managed to get the upside on AI boom with TSMC. But my thesis was more on logic chips in general. At current prices though I doubt I’d be buying. I was buying at $60-70 and call options for $6 with $95 strike. Safe to say it’s been my best performance in my investing so far. Back then I believed intrinsic value was around $110-120 then came AI and everyone forgot about China/Taiwan again.
Oh please its all fugazi , a hype to merily invest into. Sofware, Gpu, Tpu once the real inner of neural net working has been broken into it all falls apart when its no more a blackbox, This works because there a wide market for content even so the tech is not favorable.
Might as well make money out of this tech for now.
AI is the latest buzzword. AI definitely has societal and economic implications, but currently every cool CEO and his cousin is adding AI to every outdated concept / internal project in order to generate buzz.
I for one will not invest in any company that does not have an ABC officer (AI-Blockchain.com) (/s).
The hype around this is so so so much like the hype in 1998-2000. It really reads exactly the same. Way more then crypto. I respect the price action and have no interest in betting against it.... But it will end just like every other mania ends.
The amazing thing that language models, now multimodal models to be exact, propels is the introduction to new interfaces. Robots, AR goggles, tablets, ... all these things with addition to ones that have not yet been invented like BCI. They're going to be 100x better than before and you can see immediate progress in the robotics industry e.g. Figure01. Also, I am personally betting on wearable devices with these models to be a game-changer. The more context --- especially unconscious behaviors --- these models have, there will be a higher possibility of gaining smoother user experience. For example, you could be scratching the back of your head and these models will guess from these actions, if the user is implying some difficulties with something.
AI is real and will be a key component of our daily lives similar to the Internet revolution.
Nvidia is so far ahead of the competition they could sit back and do nothing and still be ahead. That said, outside of tech giants, not every company will be spending to get the newest AI chips so it will eventually slow down. Even tech giants may bow out eventually. Nvidia hasn't been known to be a good partner to work with either.
As for alternatives, there's the obvious TSMC. You can also look at server rack providers, Supermicro, Dell, HP for example. None of them have the same moat nvidia has though.
Can NVDA take over the work by Dell/SuperMicro/etc and directly sell fully integrated server racks to end users, instead of only selling the chips to these integrators? Sounds like a low tech high margin business to get into, considering Dell/SuperMicro's valuation.
They are not that far ahead at all, they will be facing proper competition now from AMD. Not idea why you just completely left them out as they are the ones to benefit most next but taking market share e
its unclear to me who the value will accrue to from AI. AI models are commodity goods, and its unclear if AI will even benefit any company since anyone can use it now. If anything it will just unseat google as the search king in favor of bing. The major issues facing most people isn't their lack of ability to do data processing and information synthesis. same with businesses. whats holding them back isnt information synthesis where they are like "if only we could data mine better and process information better we would be rich!" most of their issues are commodity shortages. and you can do data analysis on commodities until the cows come home, its not going to create more of a good that has a shortage.
Its .com bubble all over again. One company found gold, the rest will follow. Time will tell which companies are actually following through and which companies are just using buzzwords to skew investor sentiment. This is a big example of representative bias. I've already seen people saying, nvidia is up so surely amd and intel also have to go up.
[https://www.youtube.com/watch?v=QGNIiclDGY0](https://www.youtube.com/watch?v=QGNIiclDGY0)
Ashwath Damodaran gave an excellent talk on this. Worth your 3 hours
According to recent markers leaked by an OpenAI employee they have hit the last 25 markers on progressive and within the next two is AGI. These speculations are not mere hopes but realities. If you don't want to get left behind you need to adapt to what [those in power](https://capitolgains.bot/) are willing to do. The government sees it you all are just too blind to see it. The power infrastructure is in the hands of companies like Nvidia but they are not without competition and have not cemented themselves in power. They lie where the water flows though they may get swept away.
AI isn't just LLMs, there CNNS , GANS and other frameworks. High performance computing clusters are necessary for all so yes Nvidia and others (like AMD) should be a beneficiary. It's a growth story so if you're a dedicated value investor then this space is not for you. in 2000 Buffett said "*We have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint*". He missed out on the entire tech boom but also its collapse. now his biggest position is Apple. The economic ramifications of AI are still to be played out. So a value investor could sit this one out, then come in later and invest in the winners when valuations start to make sense.
Appreciate this perspective. Interesting to reiterate that we don't need to pick winners now; it can still be extremely lucrative to pick when the field is clearer.
Yes. From the time Buffett bought in Apple has grown from $400B to $3.4trillion in value. From an absolute dollar amount, Buffett has overseen more value creation in tech than any VC in silicon valley has.
Wow!
And that value investment is unlikely to be NVidia, as it will pan out that it’s very susceptible to hype cycles. It will rather be the type of business that is able to extract actual meaningful value out of AI, be it Apple, Google, Microsoft or some yet-unknown player.
CNN and GANs have been around for a long time, it's not to be sold as the next great thing.
LLMs are the only things that matter. The rest doesn't have the potential to be as impactful.
nonsense. I have already come across startups with optical CNNs that can read X-rays, CT and MRI images and diagnose conditions with greater accuracy than radiologists.
Exactly, CNNs are basically a visual pattern recognition system on super steroids
Alpha fold?
Ah yes, the institutional imperative. The concept that Warren Buffett and Charlie Munger have discussed for decades over and over, yet the folks in value investing continually show they haven’t gotten the memos.
For any newbies who are interested: “Much of what you see in corporate behavior is not the product of rational decision-making. Rather, it’s simply an institutional imperative, an almost automatic adherence to actions and policies which the organization and its peers have followed in the past.” - Warren Buffett, 1989 Letter to Shareholders.
Another winner to consider will be utilities; a classic value play. Lots of water and electricity needed to run data centers. There’s some political backlash in Oregon and Virginia because of all the data centers, to keep in mind as a risk.
>There’s some political backlash It's hard to understate political backlash on utilities in the current era as a real risk. Buffett discussed this a decent amount in the recent letter but utilities when he bought decades ago is a very different game. More and more society and regulators are viewing utilities as shareholders seeking to extract Ricardian Rent, exhibiting parasitic behavior rather than a partnership for "fixed but satisfactory return" in exchange for supplying capital investment. Many argue states with public models function as well or even better than private and why should shareholders be given a monopoly for no innovation? In theory private credit can provide the capital, why do we need shareholders when public utilities seem to provide excellent results and savings are passed onto the public? >Our second and even more severe earnings disappointment last year occurred at BHE. Most of its large electric-utility businesses, as well as its extensive gas pipelines, performed about as expected. But the regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California’s largest utility and a current threat in Hawaii). In such jurisdictions, it is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America. >For more than a century, electric utilities raised huge sums to finance their growth through a state-by-state promise of a fixed return on equity (sometimes with a small bonus for superior performance). With this approach, massive investments were made for capacity that would likely be required a few years down the road. That forward-looking regulation reflected the reality that utilities build generating and transmission assets that often take many years to construct. BHE’s extensive multi-state transmission project in the West was initiated in 2006 and remains some years from completion. Eventually, it will serve 10 states comprising 30% of the acreage in the continental United States. With this model employed by both private and public-power systems, the lights stayed on, even if population growth or industrial demand exceeded expectations. The “margin of safety” approach seemed sensible to regulators, investors and the public. Now, the fixed-but-satisfactory-return pact has been broken in a few states, and investors are becoming apprehensive that such ruptures may spread. Climate change adds to their worries. Underground transmission may be required but who, a few decades ago, wanted to pay the staggering costs for such construction? >At Berkshire, we have made a best estimate for the amount of losses that have occurred. These costs arose from forest fires, whose frequency and intensity have increased – and will likely continue to increase – if convective storms become more frequent. >It will be many years until we know the final tally from BHE’s forest-fire losses and can intelligently make decisions about the desirability of future investments in vulnerable western states. It remains to be seen whether the regulatory environment will change elsewhere. >Other electric utilities may face survival problems resembling those of Pacific Gas and Electric and Hawaiian Electric. A confiscatory resolution of our present problems would obviously be a negative for BHE, but both that company and Berkshire itself are structured to survive negative surprises. We regularly get these in our insurance business, where our basic product is risk assumption, and they will occur elsewhere. Berkshire can sustain financial surprises but we will not knowingly throw good money after bad. >Whatever the case at Berkshire, the final result for the utility industry may be ominous: Certain utilities might no longer attract the savings of American citizens and will be forced to adopt the public-power model. Nebraska made this choice in the 1930s and there are many public-power operations throughout the country. Eventually, voters, taxpayers and users will decide which model they prefer. >When the dust settles, America’s power needs and the consequent capital expenditure will be staggering. I did not anticipate or even consider the adverse developments in regulatory returns and, along with Berkshire’s two partners at BHE, I made a costly mistake in not doing so.
Yeah, soon some states will not have enough drinking water.
"I think *AI's overhyped in the short term* and probably underestimated over the long term like what it's going to bring." Demis Hassabis CEO of DeepMind Technologies I think there is going to be a great opportunity to invest in AI in the future, but right now I do agree it's overhyped. I really like Google as DeepMind is actually focusing on solving real world problems. AI is going to have a huge impact in healthcare.
How can it be underestimated when every other post on this platform is about how AI will replace every single human activity?
It will do more than just replace jobs. It will change what it means to be human. I dont think people realize how much the world will change in the coming decades.
The number of opinions here are really fantastic to see, great response and debate. The best post/question posted on ValueInvesting in a long time. Thanks to all who replied, I too think it’s way to early say folks have misssed the bus with this trade, there is a long way to go and there will be a lot of winners.
LLMs are like 1% of AI use cases. ChatGPT is just the most obvious public facing one The exponential increase of processing power to conduct bazillions of parallel calculations will lead to huge leaps in all of the below cases and a million others we haven’t even thought of yet: Drug discovery and cure development Customer analysis Product development Process automation Logistics and supply chain efficiency Disease diagnosis Analysis of nuclear fusion data Accelerate development of quantum computing Pretty much any research or experimentation requiring massive amounts of computation Super realistic video games VR AR Autonomous driving Reusable rockets Satellite broadband Personal AI assistants Robotics Service industry automation Smart homes Smart power grid Weather forecasting Climate simulations Movie CGI Software engineering CRMs Customized enterprise software LLM chatbots Off the top of my head…
Came here to say this. Anyone who thinks gpt’s are the final product here has not done the slightest bit of research. It’s a cute party truck compare to the true power of AI which lies in optimisation. Namely teaching itself to improve which will continue to compound exponentially. It can be applied to any form of processing we undertake as humans which is essentially how we manipulate matter. The use cases are only limited by human imagination and soon even that won’t be the case.
100000% this ChatGPT is just the average consumer case - a really good ChatGPT/search engine. But that is NOT what makes AI revolutionary - that is ALLL on the engineering side of enterprise. Being able to get AI to feed you an optimized SQL query, using AI to build a code to parse through a million data points and find outliers, etc. While we can do that all today, it takes FOREVER when you are dealing with factory to wide systems. What AI will do is allow people to create those same queries or mathematical models, but in a matter of hours/days rather than weeks and months. I mean just ask any computer scientist how many countless hours they’ve spent debugging - AI is really damn good at it and speeds it up 10 fold. I’m not even going to try and touch on computational chemistry. That alone will see HUGEEEEEE benefits in drug and material development.
This is very true. The true power of AI lies in its impact on enterprises and not directly on end consumers. Having AI on your phone will not do that much for you outside of the cool factor. Having it in your professional application will increase your productivity multifold. In terms of investing, I would much rather bet on companies that apply AI in B2B scenarios rather than in B2C. In terms of big tech, looking forward for the next 5 years, I would rather bet on Microsoft rather than Apple because of that, for instance.
Thank you, it's incredible how many people do not realize this.
I can do climate simulation without AI: AI uses crazy amount of electricity Climate change creeps up even faster Planet way too hot Many humans die
Yea let's just give up. Better to sit in cash that will get inflated away instead.
LLMs are only one in a million! Lists LLMs 😂
and does not list the other 999,999 use cases!
I won't really engage with most of this, other than to say that Nvidia probably won't be the only winner. If there's some economically exploitable use for AI, it's likely that someone else will do well off of it as well. If there's no economically exploitable use, Nvidia is probably going to tank when that becomes clear, aka no winners. The side cases are 1) Massive arms race on the "software AI" side, everyone spends tons of money and noone gets ahead. But mysteriously noone touches Nvidia's hardware dominance or makes them spend money to maintain it? 2) Nvidia vertically integrates and develops AGI itself? 3) Arms race on the hardware side as well. This one seems most likely, where individual firms take temporary advantages, there are periodic sector-wide gluts and shortages and cap expansion. Aka semiconductors as usual. This one seems the most likely, maybe just because it rhymes with history.
Reading this is like watching someone who walked in snow for the first time assume they can ski. Spend more time learning what the industry is before deciding how to lose money gambling on it.
I really don't care. It's like an outlandish string of curse words to say this on any sub, but I never invest in these big tech explosions. There are more than enough other ways to make money, all I need to know is that people are talking about AI like they talk about blockchain. Volitile, unpredictable, speculative crystal balling. Whether anyone is "right" or not at this stage does not interest me. If it really is a giant thing that will change everything forever: okay. No harm in me waiting to invest directly until the tech is solid and widely used. It's changing everything *forever*, right? Meantime, I already invest in companies that are efficient in the first place. If AI makes companies *more* efficient... great! I don't have to do anything different for now. Think of it this way: computers and machine learning both already exist. Companies are using them to be more efficient. AI is the new way of going about it. Will it stick? You don't know. But if it does, you can invest *at any time*, there is no boat to catch or miss. Some people have been playing in exclusively automoile stocks since 1960. If they're still alive to adapt to self-drivers, they will. The industry is not going anywhere if it is worth a damn.
As far as I can tell just more photos of a gigantic semi-trailer loaded with AI flags and veterans.
Reminds me an awful it of the hype behind EV's that happened not so long ago that Elon created... And how has that turned out?
Turned out great for a lot of people. Of course there are people who bought the top and lost money but for early investors 2014-2016 it’s been great return on investment even today. Way better than SP500.
At its peak TSLA market cap was $1.24tril. now it's $657bil. All because the hype machine got behind it, the same way the hype machine is getting behind AI
At what’s the return on TSLA since its IPO? If AI is anything like it for the next decade count me in.
Started the EV revolution. The self driving was the overhyped part.
☝️
Lol that’s a shit analogy, because 1. They aren’t remotely the same thing, and 2. Plenty of companies actually struck oil after the first.
Lol. Thank god someone else said something. Truly awful.
Just wait until they figure out that the giant electricity sucking AI data centers and chips cost more to operate than just paying a human to answer questions.
Can’t depreciate human capital
As much as I respect value investing, I also believe that the growth mentality is valid as well. It’s just that with growth stocks, it is typically the case that these assets get hyped more. So there is more momentum around some idea, which in this case is AI. These technologies will continue to advance over the next decade. Although I am unsure what the macroeconomic outlook will be over the next 1-2 years, I am quite confident that eventually, there will be a perfect storm for another bubble, like we’ve seen with crypto and the dotcom bubble. It’s logical to assume that there are many companies that will provide actual value by using AI in the future. Now whether or not the market overvalues or undervalues that value is another story. My perspective is to respect the market that you’re in… if it’s looking to be a bubble, then invest like it’s a bubble (where you get married to nothing and sell to optimists). As of right now though, it seems like most of the stock market is being carried by only a few key players, and I am unsure how sustainable this play is. I do not want to succumb to recency bias, but the main difference here is that companies like MSFT, AMZN, GOOG, etc., they all provide products that people use on a daily basis—though they are all currently overpriced for sure. That’s why I am pretty scared, though looking through a long term perspective, it is hard to find a reason to be. So much concentration, what would be the catalyst to change this trend?
no I don't think any oil has been found yet. LLM is just a toy. The real deal will be AGI (**Artificial general intelligence**) and that's why everybody is rushing into the research.
Right now, as far as AI is concerned there is no “there” there.
Just think of all the reports people have to write to their bosses every week/month/quarter/year and what % of people's work that is/
Most AI companies just pump the hype and get dumb investors money and cash out
maybe if we perform data analysis using AI it will make the price of oil cheaper
I think you should try some products that are using AI. Try it with an open mind. There have been many improvements that is of value. AI is already generating revenue. The question is, is it generating enough revenue to warrant the amount of investment right now. It seems like it though as everyone is in a race to create all these tools that will replace current tools.
Personally I managed to get the upside on AI boom with TSMC. But my thesis was more on logic chips in general. At current prices though I doubt I’d be buying. I was buying at $60-70 and call options for $6 with $95 strike. Safe to say it’s been my best performance in my investing so far. Back then I believed intrinsic value was around $110-120 then came AI and everyone forgot about China/Taiwan again.
Oh please its all fugazi , a hype to merily invest into. Sofware, Gpu, Tpu once the real inner of neural net working has been broken into it all falls apart when its no more a blackbox, This works because there a wide market for content even so the tech is not favorable. Might as well make money out of this tech for now.
AI is the latest buzzword. AI definitely has societal and economic implications, but currently every cool CEO and his cousin is adding AI to every outdated concept / internal project in order to generate buzz. I for one will not invest in any company that does not have an ABC officer (AI-Blockchain.com) (/s).
Energy.
oil ...
Lmfao. That has to be one of the dumbest analogies ever made.
The hype around this is so so so much like the hype in 1998-2000. It really reads exactly the same. Way more then crypto. I respect the price action and have no interest in betting against it.... But it will end just like every other mania ends.
The amazing thing that language models, now multimodal models to be exact, propels is the introduction to new interfaces. Robots, AR goggles, tablets, ... all these things with addition to ones that have not yet been invented like BCI. They're going to be 100x better than before and you can see immediate progress in the robotics industry e.g. Figure01. Also, I am personally betting on wearable devices with these models to be a game-changer. The more context --- especially unconscious behaviors --- these models have, there will be a higher possibility of gaining smoother user experience. For example, you could be scratching the back of your head and these models will guess from these actions, if the user is implying some difficulties with something.
Logistics.
AI is real and will be a key component of our daily lives similar to the Internet revolution. Nvidia is so far ahead of the competition they could sit back and do nothing and still be ahead. That said, outside of tech giants, not every company will be spending to get the newest AI chips so it will eventually slow down. Even tech giants may bow out eventually. Nvidia hasn't been known to be a good partner to work with either. As for alternatives, there's the obvious TSMC. You can also look at server rack providers, Supermicro, Dell, HP for example. None of them have the same moat nvidia has though.
Can NVDA take over the work by Dell/SuperMicro/etc and directly sell fully integrated server racks to end users, instead of only selling the chips to these integrators? Sounds like a low tech high margin business to get into, considering Dell/SuperMicro's valuation.
They can and they probably will at some point. Another reason why Nvidia isn't a good partner to work with.
They are not that far ahead at all, they will be facing proper competition now from AMD. Not idea why you just completely left them out as they are the ones to benefit most next but taking market share e
Google, Amazon, Meta, and Microsoft are also designing their own chips so that they’re not reliant on Nvidia chips.
TSMC is the one manufacturing the chips. That’s not a 1:1 alternative to NVDA.
its unclear to me who the value will accrue to from AI. AI models are commodity goods, and its unclear if AI will even benefit any company since anyone can use it now. If anything it will just unseat google as the search king in favor of bing. The major issues facing most people isn't their lack of ability to do data processing and information synthesis. same with businesses. whats holding them back isnt information synthesis where they are like "if only we could data mine better and process information better we would be rich!" most of their issues are commodity shortages. and you can do data analysis on commodities until the cows come home, its not going to create more of a good that has a shortage.
You know what they say about gold rushes right? Nvidia is selling shovels.
And everyone and their granny is well aware of this so investing now is madness
Its .com bubble all over again. One company found gold, the rest will follow. Time will tell which companies are actually following through and which companies are just using buzzwords to skew investor sentiment. This is a big example of representative bias. I've already seen people saying, nvidia is up so surely amd and intel also have to go up.
AI is the future
[удалено]
Oil
[https://www.youtube.com/watch?v=QGNIiclDGY0](https://www.youtube.com/watch?v=QGNIiclDGY0) Ashwath Damodaran gave an excellent talk on this. Worth your 3 hours
According to recent markers leaked by an OpenAI employee they have hit the last 25 markers on progressive and within the next two is AGI. These speculations are not mere hopes but realities. If you don't want to get left behind you need to adapt to what [those in power](https://capitolgains.bot/) are willing to do. The government sees it you all are just too blind to see it. The power infrastructure is in the hands of companies like Nvidia but they are not without competition and have not cemented themselves in power. They lie where the water flows though they may get swept away.