That chip on your dog’s shoulder? It's a bubble

Either Nvidia is the next Boo.com or AI takes over the NFL. [Bloomberg]( This is Bloomberg Opinion Today, a $60 tracking chip implanted between Bloomberg Opinion’s opinions. On Sundays, we look at the major themes of the week past and how they will define the week ahead. Sign up for the daily newsletter [here](. [Tiny Bubbles]( When I first met my wife, she was wearing this T-shirt: Source: The ‘80s. No, she wasn’t the [lead guitarist]( for Metallica. Nor was she a trucker-hat-wearing hipster — another example of generational appropriation by millennials from Gen X[1](#footnote-1). Which leads us (yes, it’s a stretch) to other kinds of bubbles, and whether they may also succumb to the sorts of centrifugal forces of the early 2000s that devastated Fogdog, Webvan and Boo.com — and shredded poor Mr. Bubble in the washer.  John Authers had a chat with [Simeon Hyman]( of ProShares, who told him that the 2000 tech bubble that wiped out many an E-Trade portfolio “turned out to be not just a stock price bubble, but also a bubble in fundamental performance.” Déjà  vu, anybody? We all know where to look: the [gaming chipmaker]( that turned the hideous acronym FAANG+/MAMAA into the mellifluous Magnificent Seven (which has since devolved to the [Magnificent Six](). “There is a clear comparison from 2000,” John [writes](. “Cisco Systems Inc. built routers, the picks and shovels of the internet, and in early 2000 it briefly became the world’s largest company on the back of enthusiasm for it. Comparing the valuation back then to Nvidia’s over the last few years, both peaked at a trailing p/e of more than 200 (not sensible).” So, will our new canary in the chip fab collapse into mere profitability like Cisco, which today languishes around 50th place globally with a market cap of a mere $200 billion? “Nvidia is doing something special, and selling real products to people who want to buy them,” writes John. “This isn’t the pre-[Great Financial Crisis] banking boom. But it’s hard to see how growth like this can be sustained.” As Matt Levine [would say](, that is not investing advice. Nvidia has one thing on its side: geography. To wit, it isn’t located in Holland or Virginia. “Europe’s largest tech firm, chipmaking-machine supplier ASML Holding NV, has sent the Dutch government [into a panic]( after warning it can’t commit to growing in its home country unless the political climate becomes more amenable to attracting foreign talent,” Lionel Laurent [writes](. “ASML has even reportedly threatened to move to France, which isn’t typically a good sign.” Ouch! Meanwhile, Liam Denning [spots]( some more bubbly behavior. “The fervor for all things AI has finally spread to a sector whose own heady start-up phase came about 160 years ago: Pipelines.” What could possibly connect AI madness to the year William Tecumseh Sherman [burned]( Atlanta? For one, the Mountain Valley Pipeline, which after a history of delays is finally set to bring Appalachian gas to market. “Big metal tubes filled with flammable vapor aren’t an obvious element of the artificial intelligence vision,” Liam notes. Nvidia “is worth about four times the market cap of the entire North American midstream energy sector. But without electricity, all those data centers are just big sheds. And not only are many sited in states like Virginia that the MVP will serve, gas is also the single largest source of electricity generation in the US.” Speaking of electrical needs: AI will force the rest of us to recharge our fraud detectors. “History is littered with innovations that were exploited by unscrupulous marketers,” [writes]( Parmy Olson. “The telephone opened up the floodgates to robocalls and e-mail to spam. Generative AI seems to have opened the door to a new era of fantasy typified by [alien-looking shellfish](.” Also, this: “It is bad enough for people ... to have their identities stolen and publicized without permission,” Parmy warns. “But even low-level fakery, like the unappealing, inauthentic food, poses a new challenge for consumers. One way to address the problem is to become far more skeptical about ads on the web-based platforms.” I must admit I’m not terribly bothered that AI is tarnishing the Slavic cheekbones of aspiring influencers. But sports is a different matter. Adam Minter [conjures up]( this scenario: Imagine it’s crunch time at the end of the fourth quarter of the Super Bowl. One team faces third-down and goal, five yards from a game-winning touchdown. On the sidelines, the head coach and his gut say run the ball, but he’s unsure where to send the running back. So, he turns to an assistant coach and asks: “When you spoke to our AI chatbot this morning, what did it think we should do in this scenario?” Obviously, crunching data has been a big part of the big leagues for a long time, from [Moneyball]( to [fourth downs]( to [three-pointers](. But the profusion of new data, particularly from video, gives AI an opening. “In an average National Hockey League game, there are over 3,000 different measures of player strengths and weaknesses,” Adam writes. “What makes AI analytics different is two-fold. First, the tips come from a much deeper pool of information. Second, the results aren’t delivered as a table or chart; rather, they are presented in simple, direct and actionable language. When a situation requires a split-second decision, that straightforwardness can build confidence in a coach’s intuition about the right choice.” That’s the important thing: A human being still makes the final call. Because nobody wants depend on an oompa loompa when it’s fourth and goal. Bonus [Fish ‘N’ Chip]( Reading: - Solar Success [Is a Curse]( for China’s Manufacturers — Tim Culpan and David Fickling - America’s TikTok Addiction [Isn’t Just China’s Fault]( — Karishma Vaswani [What’s the World Got in Store](? March 17: Russian election (sic) results - Russia May Have [Targeted Ukrainian Civilians](. And That's a Crime — James Stavridis - The Hypocrites [Are Crying Hypocrisy]( on Gaza and Ukraine — Marc Champion March 20: Fed rate decision - The Fed [Will Slow QT](. What Matters Is Where It Stops.— Bill Dudley - Rate-Cut Bets [See June]( as the Kindest Month — Marcus Ashworth - Why the Stock Market [Doesn’t Care]( About Rate Cuts — John Authers - Fed’s [Data Dependence Fails]( When the Data Isn’t Dependable — Jonathan Levin March 21: Existing home sales - Biden’s Housing [Tax Breaks Are a Start](, Not a Silver Bullet— Jonathan Levin - [Pandemic Homeowners]( Are the New Envied (and Hated?) Elite — Conor Sen [I Wanna Be Your Dog]( If all the microchips in my house were to implode — MacBook, iPhone, iPad Air, iPad Mini, Apple TV 4K (yes, I am a slave to fashion) — there would only be one travesty. The one in this guy: Meet Rizzo! Thanks to EU laws on dog tracking, and the fact that the lady in the Mr. Bubble T-shirt never travels without him, Rizzo has a $60 tracking chip implanted between his shoulder blades. What he is obviously not sporting is a leash, which might be a problem this summer. “Pity the poor dog owners!” Stephen Carter [writes](. “As warm weather descends, communities from California to Arizona to Michigan have announced stricter enforcement of leash laws. I don’t have a dog in this particular fight, but I do have an interest in bits of social history that tend to be overlooked. And a glance at the history of leash laws tells us why they’re likely to stick around: Because someone always comes up with a new reason why they’re important.” From the late 19th century — when fear of rabies was, well, rabid — to recent concerns among environmentalists that unleashed canines will introduce disease (and sharp teeth) into wildlife habitats, lots of leash laws make it on the books. The catch is that nobody follows them. “There’s some evidence that leash laws [make little difference]( in the degree of biodiversity, but most studies [find]( [quite]( the [opposite](,” Stephen reports. “Perhaps the difficulty in pinning down a clearer answer is because the laws are widely ignored. A 2017 study of a lakeside recreation area found a compliance rate of just [16%](.” So, will this year’s crackdown change things? “It’s generally a bad idea to have laws that are all bark and no bite,” writes Stephen. “But whether you love leash laws or hate them, I wonder whether we're fighting over the environment or the dogs themselves. Depending on the answer, one might just say that the contretemps is a case of the tail wagging the ... well, you know.” Thanks, Stephen, for sparing me the effort and coming up with three dad jokes to end things. Notes: Please send fish ‘n’ chips and feedback to Tobin Harshaw at tharshaw@bloomberg.net. [1] Other examples include flannel, Burning Man and Ren & Stimpy. Gen Z seems only to have filched Friends, which they are more than welcome to. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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