The “Spooky” Side of AI

[The Bleeding Edge]( The “Spooky” Side of AI By Colin Tedards, Editor, The Bleeding Edge Dear Reader, Welcome to the weekly mailbag edition of The Bleeding Edge. If you have a question you’d like me to answer in a future edition, write to me by clicking [right here](mailto:feedback@brownstoneresearch.com). Let’s get started… Colin just wrote about CoreWeave. It would be helpful to give us its symbol! – Tim L. Thanks for writing in, Tim! CoreWeave is a company I wrote about in [Wednesday’s edition]( of The Bleeding Edge. It’s still a private company that has a reported $100 million investment from Nvidia. Even if the company was public, it likely wouldn’t be a great investment in the long run. It takes significant amounts of money and requires massive scale to achieve profitability in the cloud server business. Google Cloud, for example, just turned an operating profit more recently, and the company started that business in 2008. I mentioned CoreWeave not because I thought it was an interesting investment. Rather, it was a good example of the dynamics in the cloud market. Public cloud server margins are also going to compress as more GPUs and competition hit the market in 2024. As the larger public cloud companies – such as Google, Amazon, and Microsoft – build out their AI cloud offerings, pricing will continue to trend downward. CoreWeave is a great example of a company that wisely pivoted away from crypto mining to AI cloud services, but that market is going to continue to be dominated by just a handful of stocks. Hurray for Claude. What’s the point of AI? What’s the endgame? My 34-year-old son just discovered the healing of God’s mercy. And his response was that it would be great to have an algorithm that could convey that kind of peace. Spooky stuff, Bud. I’ve been to seances where the table answered questions while communicating with the dead. Was that okay? Is it okay to contact the spirits? Just because we can? No. I put AI in the same category. It’s not necessary for a fulfilling life, and it’s dangerous. I’ll drive my own car. Thank you. – Sid C. Sid, thanks for the message. There’s certainly going to be a lot of discussion around AI and its impacts on society. With all new technology, there are going to be some use cases that aren’t for the better. It will be easy to focus on these, and the news stories about it will get a lot of attention. Recommended Link [“Amazon Loophole” Allows Anyone to Collect Payouts]( [image]( Amazon. It’s one of the most profitable companies on Earth. Yet, according to Brad Thomas, a multi-millionaire, best-selling author, and former economic advisor to President Trump... What few people realize is, thanks to a little-known IRS loophole — billions of dollars get paid out each year... Required by law! With the next payout scheduled to go out on September 10th! Brad has been featured on Bloomberg, Fox & Friends, Barron’s, CNN, Kiplinger, NPR, MSNBC, and Forbes... But he’s never revealed this secret anywhere... Until now... [Watch the Video Now (Brad Reveals Amazon “Payout” Loophole)]( -- You bring up some interesting questions. They’re philosophical, spiritual in nature. Let me offer one more potentially “spooky” implication of AI. Someday soon, it could be possible to “raise the dead.” That’s because an AI could – in theory – be trained on all written and spoken material from a public figure. Combine this with realistic generative images (deep fakes), and we might be able to speak and converse with long-dead figures, perhaps even our relatives. That’s pretty heavy to think about. And you’re right, the power of this technology is going to feel very uncomfortable at times. But there are also benefits… The truth is AI will democratize access to knowledge in ways we’ve never seen before. As computers can perform the tasks of lawyers, teachers, and doctors, they will bring access to knowledge people have never experienced before. If AI gives a father or a mother 10 extra minutes per day removing a mundane task from their life, they can spend that extra time with a child. This will have a profound impact on the world. The average lifespan of a commercial truck driver is 16 years lower than the national average. Not only are self-driving cars safer than humans, but they will help replace a job that is actually unhealthy for humans to do. Time is the most valuable resource we have. AI is going to give people more of that. What someone chooses to do with that time is obviously a personal choice – but most people are good, and therefore the outcome of AI is likely to be as well. Recommended Link [Market Wizard crushed the market in 2022. What’s he got in store for 2023?]( [image]( Market Wizard Larry Benedict crushed the market in 2022… He delivered a perfect track record to his One Ticker Trader readers, going 11-for-11. Previously, he went 20 straight years on Wall Street without a single losing year. And when the market plummeted 37% in 2008, he delivered 23% returns… Now he’s sharing an over-the-shoulder “demo” of his winning strategy in action. He calls it the One Ticker Retirement Plan… And it takes less than 10 seconds to demonstrate. [Watch it here.]( -- The truth is that all technologies come with trade-offs. They make our lives easier and more efficient. But they also introduce some fundamental changes that can make us feel uncomfortable. The best thing we can do is try to understand and mentally prepare for this brave new world. Hi, Would like to hear your thoughts re: GPU shortages and markets for decentralized computing. Can centralized markets keep up with demand? How to play it? – Brendan V. Good question! On the AI GPU side, clearly, demand is outpacing supply, and all indications point to that continuing into 2024. This will keep demand for GPU hardware high, although some of that is priced into these stocks. Gaming GPUs, more typically found in gaming systems and for decentralized crypto mining, have fairly robust supply. Pricing appears to have stabilized more recently, showing either a pickup in demand or possibly the manufacturers starting to ship less into the channel. Nvidia is rumored to have pulled back on manufacturing its gaming GPUs to lend that capacity to its wildly popular AI GPUs. Recommended Link [Reverse ‘money machines’ popping up across America]( Machines like the ones in this picture are popping up all across America. [image]( If you’ve been to a concert venue, stadium, or airport, you’ve almost certainly walked by one without knowing. The experts are calling it a ‘Reverse ATM’. They’ve been installed at places like Citizen’s Bank Ballpark in Philadelphia… They’ve even been used at the Super Bowl. Why are these machines suddenly appearing out of nowhere? And what does it mean for your money? We’ve recently arranged an interview with former Goldman Sachs managing director, Dr. Nomi Prins, to get her take. There’s nobody in America who’s more aware of the inner workings of the banking system. In the interview, [Dr. Prins explained these strange ‘reverse ATMs.’]( And she said she expects them to play a key role this Summer as our nation’s financial system is overhauled for the first time since 1971. According to her research, many Americans will be blindsided by what’s to come. BUT, folks who understand the ‘Reverse ATM’ phenomenon before it becomes obvious to the average American could actually profit in the weeks ahead. To help folks prepare, she’s recorded a briefing that explains exactly what she sees coming, how it will play out, and how much time you have to prepare. [Click here now to see Dr. Prins’ free presentation.]( -- No matter the short-term fluctuations, the GPU hardware market has several years of durability left. Margins will compress, and more competition will come, but the demand for computing power continues to exponentially grow. I’ll be covering a wide range of hardware makers and suppliers in Exponential Tech Investor and Near Future Report. Hi Colin, Loving the newsletter and the fact that we still get to enjoy the Investor Channel to its fullest. Recently, I have been buying DIS at the $85/$86 level. DIS has not traded below, let’s say, $80 since 2014, touching that level only a couple of times in nine years. I see potential upside to $120, with a stop set at around $75. Good risk/reward IMO. Initially, I was looking at this purely from a medium-term trade lens, but you brought up the fact that Apple may potentially acquire the entertainment giant’s streaming/ESPN business. What longer-term impact do you think this would have on Disney’s share price, growth opportunities, balance sheet, etc. if this were to happen? And would you anticipate DIS getting a fair price for the package? Would love to know your thoughts on the above. Regards, – Rhys M. Rhys, really good question and great timing. As you know, I can’t offer personalized investment advice. But I can speak generally on Disney (DIS). There’s been quite a bit of news surrounding Disney and ESPN in particular over the past week. It’s rumored that the company is negotiating with the major sports leagues – such as the NFL, NBA, and NHL – to take an equity stake in the sports network. It’s a risky move for the leagues. They primarily earn revenue from television deals and having networks bid against each other each time the license to show certain games comes up. If the leagues were to own ESPN, it might alienate some networks. While I see partnering with a league as a possibility, it doesn’t really solve the underlying issues Disney has with ESPN and the fact that league sports rights continue to climb, while affiliate fees from traditional cable subscriptions fall. I still believe the best outcome for ESPN is for Disney to sell it (or spin it out into a separate company/IPO). And [as I wrote]( I think the most likely acquirer would be none other than Apple. In either case, that would be beneficial to a Disney shareholder. First, it would allow Wall Street to fully appreciate the wildly profitable parks business. Second, Disney would be wise to focus on content it owns and can monetize both on screen and inside the parks. The sports content is essentially leased, and it’s become less profitable. Regards, Colin Tedards Editor, The Bleeding Edge --------------------------------------------------------------- Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com. IN CASE YOU MISSED IT… [Do You Bank in Any of these 110 Banks?]( [These 110 banks]( have enrolled in a controversial pilot program that could have drastic implications for your money. If your bank is on this list, you’ll need to move your cash before September 20th… or risk your entire life savings. [Click here to see the full list.]( [image]( [Brownstone Research]( Brownstone Research 55 NE 5th Avenue, Delray Beach, FL 33483 [www.brownstoneresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Brownstone Research welcomes your feedback and questions. 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