[htormey]

To summarize what I think the author is trying to say with this article:

1) The stock market is in a bubble due to a decade of low interest rates and tax slashing by “right wing” governments.

2) Big tech in particular has been doing well but this is not sustainable.

3) AI is in a bubble. People are pinning their hopes on it to keep tech and I presume big tech growing.

4) A bunch of references to academic papers from 2000 about why AI is hard.

5) Gen AI requires a lot of compute which generates a lot of carbon and is bad for the environment.

Thus his statement: “ I think I’m probably going to lose quite a lot of money in the next year or two. It’s partly AI’s fault, but not mostly. ”

Which I disagree with. Because A) I think in the long term (5+ years) the investment in AI will be a positive ROI. B) if the stock market crashes in the short term it’s likely going to be for non AI reasons. 3) His arguments as to why AI isn’t going to pan out long term are a bit weak.

Having lived in the Bay Area for over 13 year's, I’ve seen a few cycles: social, mobile, cloud, gig economy etc.

The cycle pattern is always the same: a) a big new exciting tech idea comes along. b) investors pile in money. c) 95% or more of the companies they invest in go bust and if the space has legs some companies do really well.

How is this any different with the current wave of AI companies?

Today the big winners in AI are the incumbents, some examples:

Microsoft: is making money being the hyperscaler of choice for AI companies (on prem ChatGPT, mistral, etc), it’s co pilot lines and enterprise subscription products.

Nvidia is making bank being the current standard on which all of these companies run their models. They have some recent competition from Groq but are still likely going to be crushing it for the next year or two. Mainly due to precommits from the hyperscaleralers.

Meta: seem to have been able to leverage AI to claw back advertising revenue due to Apples crack down by improving targeting.

As someone who has raised venture capital to do an AI startup I’d say yes there is a lot of hype in this space. Yes a lot of these startups are going to go out of business but it’s also early days.

I also think working AI into this poorly written article about how the stock market is going to crash is a bit of stretch.

I’m concerned about a market crash myself but I am more worried about it being caused by a combo of a) the upcoming US election. B) the war in the Ukraine. C) conflict with Iran. D) interest rates in the USA being high.