This is Bloomberg Opinion Today, a lucrative portfolio of Bloomberg Opinionâs opinions. Sign up here. Why tech giants rule AI. The hardest-w [Bloomberg](
This is Bloomberg Opinion Today, a lucrative portfolio of Bloomberg Opinionâs opinions. [Sign up here](. Todayâs Agenda - Why tech giants [rule AI](.
- The [hardest-working]( princess.Â
- [Tesla sales]( hit a wall.
- Canadaâs [immigration boom](. The Future Isnât Scary, Being Locked in Your Home by AI Is
Donât panic, Jen. Source: YouTube If youâve been watching a lot of American college basketball over the past couple of weeks (reader, I have), youâve also been subjected to multiple viewings of three terrifying ads in which artificial-intelligence bots threaten actors portraying college students with (1) [home imprisonment](, (2) [brain takeover]( and (3) â[your demise](,â only to back off and reveal that all they meant was (1) donât forget your protein shake, (2) you still have to study for your chemistry exam and (3) Iâm going to do a poor job of defending you one-on-one. âThe future isnât scary, not investing in it is,â goes the less-than-reassuring tagline of the commercials for Invesco Ltd.âs QQQ exchange-traded fund, the âOfficial ETF of March Madness.â The backstory of why an ETF â supposed to be the lowest-cost of investment options â spends more than $125 million a year on TV ads and other marketing was [told and told well]( last August by Bloombergâs Katie Greifeld. Short version: QQQ, which tracks the Nasdaq 100 Index, was created by the exchange in 1999 as a âbranding exercise.â Its [prospectus]( dictates that 40% of the proceeds of its relatively high 0.2% expense ratio go to Nasdaq as licensing fees and another 40% be spent on marketing. But is owning the 100 or so (there are 101 in QQQ at the moment) biggest non-financial stocks on the Nasdaq really the best way to profit from the AI boom? Sadly, it might be. As Parmy Olson [explains it]( (free read), âonly a few companies have the resources and talentâ to create and improve the so-called foundation models that are driving most AI progress these days, and apart from upstart OpenAI, theyâre all legacy tech giants. The four she mentions  â Microsoft Corp., Alphabet Inc., Amazon.com Inc., and Meta Platforms Inc. â happened to make up 23.6% of QQQâs value as of this morning. The main hope for breaking this oligopoly is open-source AI, but open source by its very design tends not to generate huge windfalls for those who invest in it. Another place to look for investment returns is with the companies that supply the proverbial pickaxes and shovels of the AI gold rush. Chipmaker Nvidia Inc. has of course been the main beneficiary of this approach, but Thomas Black [points out]( that several big industrial companies, whose products are essential to building and maintaining the data centers where AI magic is created, have seen big gains as well. Those with their fingers in the data-center pie include Caterpillar Inc. (generators), Trane Technologies Plc (cooling systems) and Eaton Corp. (power-supply gear). The purest play of the lot is Vertiv Holdings Inc., which makes almost everything you need to get a data-center up and running (except the computers), and has seen its stock price rise 498% since the beginning of 2023. Bonus AI/Sports Reading: Parmy also [weighs in]( on OpenAIâs [announcement]( that it has developed a voice-cloning system so convincing that the company has decided not to release it. âThis was an area OpenAI should have steered clear of entirely,â she writes. âThe problem isnât the technology, but OpenAIâs broader insistence on getting AI into the hands of everyone it can.â If all that college basketball on TV has made you long for college basketball thatâs (mostly) not on TV, Adam Minter [wants you to know]( that the overwhelming majority of US college athletes (320,000 of them!) participate in Division II and Division III programs that âpreserve the amateur ideal that the NCAA claims to embrace.â They also help preserve the NCAAâs tax-exempt status, he notes. Shohei Ohtani is very good at baseball but terrible at crisis PR. The latter failing is pretty common among Japanese institutions faced with bad news, writes Gearoid Reidy, and [probably shouldnât be taken as a sign]( that Ohtani is guilty of any gambling-related misdeeds. The Hardest-Working Princess With the UKâs King Charles III and his daughter-in-law both battling cancer, 73-year-old Princess Anne is putting in overtime this month opening parks, visiting museums and tech companies, attending fundraisers and graduations and making all manner of other ceremonial visits. Howard Chua-Eoan [applauds her efforts](, which he says are crucial to helping the country make sense of itself. âUnlike political leaders, who come and go with elections, the Windsors have got genes in this game,â he writes. âThe family embodies a commonality â decked in elite fashion â that connects spaniel breeders to solar energy engineers to people digging an enormous sewer.â Bonus Hard-Working Writing: Two of our hard-working writers have two columns today. Youâve already seen Parmyâs duo; now itâs Marc Championâs turn. First, he [argues that]( while Turkeyâs âastonishingâ weekend election results are a big setback for President Recep Tayyip Erdogan, itâs wayyyyy too early to count the resilient populist leader out. Then, he [makes the case]( that Israelâs deadly attack on Iranian military commanders in Syria is an indication that Iran canât escape blowback from the proxy wars it keeps waging around the Middle East. Telltale Charts Tesla Inc. released its first-quarter earnings today, and the news wasnât great. Vehicle deliveries were down 20% for the quarter, well below analystsâ estimates, and the company has now produced more vehicles than it has sold in seven of the past eight quarters. The bad news came [without warning](, says Liam Denning, unless you count Chief Executive Elon Muskâs leaked email last week mandating that all US Tesla buyers be given a short demonstration of Teslaâs âfull self-driving,â or FSD, driver assistance technology before getting their vehicles. FSD cannot in fact fully drive a car without supervision, but it does cost $12,000 to turn on and Tesla clearly needs the money to justify its still-high valuation. Immigration has supercharged population growth in Canada lately, and self-described âcosmopolitan and classical liberalâ Tyler Cowen [thinks thatâs great](. He does wonder how long Canadians will accept these high inflows, as they require big economic and cultural adjustments in exchange for benefits that in some cases wonât become apparent for generations. But there has been one big immediate plus: better food. âMy point is not to make travel recommendations (though the restaurants in the [town of Scarborough]( remain a particular favorite),â Tyler writes, âbut to show how Canada is connected to many global trends that will help keep it vital.â Further Reading Donât count out a Disney-vote [plot twist](. â Beth Kowitt Health care [costs too much]( in the US. â Bloombergâs editorial board KPMG and Abrdn need vowels and [some time apart](. â Chris Hughes [Putinâs new war front]( is in the Balkans (free read). â James Stavridis Why â3-Body Problemâ [disconcerts China]( (free read). â Karishma Vaswani [Gig work stats]( depend on how you ask. â Justin Fox A hedge fund thatâs [also a newspaper](. â Matt Levine [Rates will stay high]( and thatâs OK. â John Authers ICYMI Simulations show [debt danger ahead]( for the US. [Biden, Xi talk]( about AI, Russia and fentanyl. Americans say they [need $1.5 million]( to retire. Kickers House GOPers want to [rename Dulles Airport]( after Trump. The war on [Bradford pears](. Medicare can now process [$99-million medical bills](. Notes: Please send comments and tips for escaping from AI chatbots to [justinfox@bloomberg.net](mailto:jkarl9@bloomberg.net). [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before itâs here, itâs on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals canât find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
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