Happy Friday!
I’m packing for NYC for our first-ever artificial intelligence (AI) investing event.
I’ll be talking with several experts, including Dylan Patel at SemiAnalysis.
Dylan is the best chip analyst I know. The guy is an encyclopedia. I’m looking forward to discussing our updated take on Nvidia (NVDA), among other up-and-coming AI opportunities.
I hope you can (virtually) join us for the event. Go here to do so before the early bird ticket window closes next week.
This has been the busiest week for new AI developments in months. Let’s get after it!
- Turns out, AI isn’t a fraud.
The AI “App Store” wasn’t the only big announcement from OpenAI on Monday.
It also revealed GPT-4 Turbo, which is ChatGPT on steroids. The AI chatbot can now analyze more than 300 pages of text in one go. It also seamlessly switches between images, text, and speech.
I was once skeptical about AI. I’m always skeptical about tech that sounds amazing but that no one actually uses. That was the state of AI for a long, long time. As recently as last year, Nvidia was the only company making real money from AI.
Situation’s changed. Finally, we have real AI products attracting real users.
This time last year, ChatGPT didn’t exist. Now 100 million people use it every week. OpenAI will rake in $1 billion+ this year from ChatGPT subscriptions!
This rapid progress reminds me of the early days of the iPhone.
The iPhone launched in 2007. A year later, we got the App Store. Soon after came the ability to shop online and chat with friends from anywhere… and the rest is history.
But smartphone innovation is dead. The AI era is up next.
Here’s a prediction: OpenAI will shock people by announcing a new device within the next year.
AI won’t just come as an “app” we download to our smartphones. No way. It’ll involve a totally new computing device optimized for AI.
Invest accordingly.
- Is “Grok” the ChatGPT killer?
Elon Musk has entered the AI race.
His AI startup, xAI, is about to release a chatbot called “Grok.” A few thoughts…
ChatGPT is straight-laced. It’s programmed to avoid controversy and reflect mainstream ideas.
Grok, on the other hand, is like a rebellious teenager who isn’t concerned about being “politically correct.” How refreshing!
I LOVE the name Grok. My fellow sci-fi fans will recognize the word from Robert Heinlein’s Stranger in a Strange Land. It’s my second-favorite sci-fi novel of all time (Dune is #1).
For now, this is just a fun toy. Grok isn’t a serious competitor to ChatGPT.
But I think Elon is planning to build a “super app” around Twitter and Grok.
Twitter Premium users will soon have access to Grok. Twitter has also been granted “money transmitter licenses” in several US states.
In the not-too-distant future, you’ll give Grok the prompt, “Send @DisruptionHedge $100 for dinner and tweet out a picture of that Barolo wine we drank.”
Maybe Grok will hail you a Tesla (TSLA) robo-taxi too. Elon is making the AI race interesting!
- How Google blew it.
A recent study from AI platform Vectara measured how often the leading AI systems “hallucinate” (make up answers).
Google’s (GOOG) AI hallucinated 27% of the time. It answered one in four questions “wrong.” ChatGPT’s hallucination rate was just 3%.
Big embarrassment for Google. I’m more confident than ever “peak Google” is in the rear-view mirror.
It won’t go bust tomorrow. The company has deep pockets and is spending a ton of money on AI.
But its stock could be dead money for a decade. I’d avoid it.
If you’ve been following RiskHedge for a while, you’ll recognize this table. It charts the world’s largest companies by decade since the beginning of 1980:
Source: companiesmarketcap.com
See how the “Top 10” list completely changes every decade? Dominant companies always falter.
Google is still #4 today (not pictured). But it’s falling behind in the AI era and will be absent from these rankings by 2030.
Louis-Vincent Gave, founding partner of asset manager Gavekal, first showed me this chart at a conference back in 2017. It’s influenced how I invest ever since.
I’ll be talking with Louis about the stocks he thinks will make the “2030” list, and I’ll get his expert macro insights as part of our upcoming AI event.
- Today’s dose of optimism…
I’m reading C.S. Lewis’s The Screwtape Letters, and I can’t stop thinking about this sentence.
Reflecting on his life, one of Screwtape’s patients says, “I now see that I spent most of my life in doing neither what I ought nor what I liked.”
Note to self: You have one life. Find something you love to do and do it until the day you die. If you find a job that feels like play, you’ll never have to work a day in your life.
I’ll chat with you Monday.
Stephen McBride
Chief Analyst, RiskHedge
