It is hard to imagine that AI is not a massive revolution. We all live with natural stupidity, so the advent of the opposite is quite breathtaking. This article could be written by AI in 1 minute flat, though anyone who used AI much, would spot the AI-isms pretty fast. Even so it is early days for AI and even at such a point it is a huge tool/machine for anyone who has a reason to apply it.
Last hight Nvidia released its most recent quarters numbers and they were stellar and after hours up went the price $40 though as I write that has pulled back to $23.
The reason is simple, accelerator silicon and associated cards power AI and Nvidia is the No1 in this hit parade. The accelerator cards have ‘tensor cores’ which do all the clever magic that makes all the math connections that AI uses to ‘know stuff’ from data. A GPU like the 4080ti has 14,080 Cuda cores which do the math for 3D rendering and Crypto hash crunching, while off to the side there are Tensor Cores. Tensor cores can do non-AI stuff where a certain kinds of intensive maths work is required like Ray Tracing and fluid mechanic simulations. These operations need to be burnt directly into silicon rather than interpreted from via slow-mo software implementations that go at a tiny fraction of the speed of the equivalent code written into silicon. AI is all about ‘Tensor cores’ and Nvidia is the kind of the hill. There are others, like AMD and from here on in, it will be Tensor core hardware that will be setting the accelerator world on fire as incredibly well funded AI companies sweep up as much accelerator processing as they can get their hands on.
So the only question is, do you want to own the already incredibly expensive Nvidia or the much less lofty AMD. I own neither but I’m guessing I’d choose AMD because I like value stocks in my portfolio rather than superstar stocks. (Silly me) Right now however I’m a bit hesitant to touch anything spicy because the Fed is out there tightening away and until that has run its course, I prefer to spectate.
Meanwhile there appears to be something that is being generally missed about AI. Certainly, there is the doom school who imagines AI becoming conscious (whatever that really means,) taking umbrage to humanities existence and then matrixing us all into placental pods or worst extincting our naked monkey butts into the geological record with the other obsolete critters. (Can you tell this article isn’t written by AI yet?)
How there is a less obvious scenario which will cuase much consternation. AI will be treated like a very dangerous object. Like a machine gun or a plane, you wont be allowed have your own unless you get licensed, a bit like your meds there will be experts in the way doling out AI if you want some or perhaps you will need, training, testing and permission to pilot AI like you do a car or a plane. You will instead have access to low powered versions, ones crippled to not allow you to outsmart anyone much, let alone turn yourself into an X-spouting spacefaring titan able to grow a new head of hair and land UFOs on floating barges. Instead the real AI will be controlled, owned and curated by Governments or their proxies. Unhappily those governments will be jockeying for power as they always do and can’t help themselves from enjoying, so there will be in effect a never ending global AI war. It doesn’t take much of an IQ advantage to vurl the vurld and you can guarantee at least 3 or 4 countries will be striving their upmost to have that advantage and with no second place on offer there can be no limit to the lengths that will be gone to, to get that advantage. Unlike a nuclear bomb which is only a threat, AI can be used all the time without being detected and without negative effects but of course as the ‘minimax’ is the optimal outcome for competitors, a toxic road will be almost irresistible.
You don’t need to have AI get conscious to have a mess. Humans wielding novel weapons is enough to be going on with. However, there is further bad news, much worse news perhaps.
It doesn’t matter how much you crank the hardware, how much of it you have, you can always use more. That more is powered by electricity and your AI IQ is going to be limited almost solely by your ability to sustain an almost infinite electricity bill, even if you are a country. Forget solar, forget nuclear, forget gas…. Its all going to come down to the cheapest option and that is coal. Actually, it is going to be down to how much electricity you can generate period, but the base of the energy generation pyramid is going to be vaste amounts of coal and there are truly vast reserves of it.
So the choice of a country will be, stay green and get absorbed by coal guzzling AI superpowers or get busy with your own energy guzzling AI infrastructure.
Silicon + Energy = AI
…is at the very least going to put ‘net zero’ in the dumpster for a generation or two.
As such a strategic investor can look to AI as driving a basic shift in the world economy and with it a big shifting in where equity values lay.
Whether AI produces huge unemployment or a wonderland of high value add, that is yet to be decided, whether humanity rises to yet another level of sophistication, goes into decadent idleness or goes foop, we can’t know, but we can be sure there is going to be a exponential increase in energy usage, unless of course, AI will only every be an amazing autocomplete, a delightful renderer of elvish girl portraits and a semi safe drivers of cars.
Lets face it, the cats out of the bag, and while you can let it scare your pants off, it’s a fabulous opportunity for investors to get to huge opportunities early and load up, if only they can work out how the AI revolution will roll out.
Some of my money will be on energy and everything about it and its supply, but there will be many more opportunities to come.