Microsoft's (Not So) Hidden AI Warning

It seems every day there's a new concern or warning about artificial intelligence ('AI')... Just this week, news broke that computer scientist Geoffrey Hinton – often referred to as the "Godfather of AI" – had left his job at Alphabet's (GOOGL) Google, where he designed machine learning algorithms. As he explained in a tweet on […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] Microsoft's (Not So) Hidden AI Warning By Herb Greenberg --------------------------------------------------------------- [Overheard at Apple's Secret Meeting...]( A thousand people attended... NO CAMERAS were allowed! One invitee said every iPhone was wrapped with "tamper-proof stickers" to prevent photographs. At the event, Apple unveiled a device that "could eventually replace mobile phones." Apple codenamed the device "N421"... But Michael Robinson calls it "iPhone Killer." To see how you could potentially profit from iPhone Killer... [Click here before July 26](. --------------------------------------------------------------- It seems every day there's a new concern or warning about artificial intelligence ('AI')... Just this week, news broke that computer scientist Geoffrey Hinton – often referred to as the "Godfather of AI" – had left his job at Alphabet's (GOOGL) Google, where he designed machine learning algorithms. As he explained in a tweet on Monday... I left so that I could talk about the dangers of AI without considering how this impacts Google. Google has acted very responsibly. Google hasn't just been a leader AI development, but perhaps its biggest booster... writing in its annual report that AI will "assist people and benefit society everywhere." But when it comes to society, there's a dark side... and it's happening fast. It's not just Hinton who is concerned... OpenAI co-founder Elon Musk has raised alarms. And earlier this week, online education company Chegg (CHGG) watched its stock plummet after its CEO said... In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth and we were meeting expectations on new sign-ups. However, since March we saw a significant spike in student interest in ChatGPT. We now believe it's having an impact on our new customer growth rate. But the only AI developer that appears to have sounded a siren of sorts about AI's impact on society is Microsoft (MSFT). It's a warning none of its competitors have included even in their most recent quarterly filings – not Alphabet, not Amazon (AMZN), and not Meta Platforms (META). --------------------------------------------------------------- Recommended Link: [Shocking true story about a beverage manager...]( A guy named Hal K. spent 30 years with Coke... including roles in general and revenue management, strategy, operations, marketing, and sales. It turns out, Hal figured out an investing secret. He discovered a special way to increase the value of his shares from $39,000 into $627,260. Hal did NOT use day trading, options, leverage or anything complicated. And the crazy part? Anyone could've gotten in with Hal for the chance at the same 1,588% returns. In this short message, Whitney reveals his “blueprint” to show his readers how they could profit from this opportunity To get the "blueprint" for 10 times gains, [go here now](. --------------------------------------------------------------- I first [pointed this out]( back in February, when ChatGPT and generative AI was still emerging... But it's worth repeating given everything that has happened in the supersonic span between then and now... Starting with its July 2022 10-Q filing, months before OpenAI launched ChatGPT and before integrating ChatGPT into its revived Bing search engine, Microsoft tweaked the "risk factor" about how AI might "result in reputational harm or liability." Specifically, as you can see below, it added the line that AI could "result in incidents [that] cause harm to individuals or society." The disclosure was unchanged in the subsequent 10-Q in October but was altered again in January's 10-Q – after the ChatGPT hoopla hit. As the snippet below shows, "society" was mentioned a second time, almost as if you missed it the first time... that AI "may have broad impacts on society." Finally, in its most recent 10-Q from last month, while there were no new mentions of "society," this time Microsoft noted that the AI in question includes AI from "our strategic partner, OpenAI." I realize all of this is boilerplate, but I like to remind investors that boilerplates are there for a reason... and sometimes do become real risks. Among them, as it relates to society, is that AI could be coming after your job... Look no further than IBM (IBM), whose CEO Arvind Krishna told Bloomberg earlier this week that roughly 7,800 jobs, or 3% of its workforce, could be replaced by AI. As Bloomberg reported... Krishna's plan marks one of the largest workforce strategies announced in response to the rapidly advancing technology. More mundane tasks such as providing employment verification letters or moving employees between departments will likely be fully automated, Krishna said. Some HR functions, such as evaluating workforce composition and productivity, probably won't be replaced over the next decade, he added. The real surprise, of course, will be if the very engineers who design AI wind up disrupting themselves out of work... and the software industry itself. [I wrote as much in March]( quoting my friend Paul Kedrosky and his business partner Eric Norlin of SK Ventures as saying... We have nothing against software engineers, and have invested in many brilliant ones. We do think, however, that software cannot reach its fullest potential without escaping the shackles of the software industry, with its high costs, and, yes, relatively low productivity. A software industry where anyone can write software, can do it for pennies, and can do it as easily as speaking or writing text, is a transformative moment. It is an exaggeration, but only a modest one, to say that it is a kind of Gutenberg moment, one where previous barriers to creation – scholarly, creative, economic, etc. – are going to fall away, as people are freed to do things only limited by their imagination, or, more practically, by the old costs of producing software. This will come with disruption, of course. Looking back at prior waves of change shows us it is not a smooth process, and can take years and even decades to sort through. If we're right, then a dramatic reshaping of the employment landscape for software developers would be followed by a "productivity spike" that comes as the falling cost of software production meets the society-wide technical debt from underproducing software for decades. The obvious question is why all of this is happening now instead of before the ChatGPT rollout and surge of interest in generative AI... After all, AI has been around for years. As Paul puts it... Before November, people hadn't thought seriously about what current AI could do. Now, every board is demanding companies rethink all staff counts on a zero-based level... Too many people think AI is coming for someone else. That is a narcissistic error. These days, there's a lot of that going around. Regards, Herb Greenberg May 4, 2023 P.S. In a special presentation, my colleague Whitney Tilson explains how an $87 trillion wave of money is flowing into the AI sector... and how investors can take advantage with his five favorite stocks in the area. [Learn more here](. [Get a 60-day, 100% money-back trial to Empire Real Wealth by clicking here.]( --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2023 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 1125 N. Charles Street, Baltimore, Maryland 21201 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](