Nvidia might have just gotten ahead of itself⦠[The Jolt with Stephen McBride] Like driving a Ferrari in Manhattan For decades, Americaâs largest industryâreal estateâhas been run by a cartel. [I first wrote about this in 2019.]( I expressed hope a company would come along and disrupt the monopoly that allows realtors to charge sky-high 6% commissions in the US. Good news⦠- Last week, the National Association of Realtors (NAR) settled a wave of commission lawsuits brought by home sellers. In short, it marks the end of the realtor cabal that artificially inflated fees. Middlemen are always at high risk of disruption. Just ask stockbrokers. âStockbrokerâ used to be a lucrative job. Then in 1975, The New York Stock Exchange abandoned its fixed-rate system. Commissions nosedived: Source: National Bureau of Economic Research Realtor commissions are next. Innovators will jump into the market and compete on price. Expect average realtorsâ commissions to gradually fall to between 1% and 2%. The great ones will command more, of course. Investors: Avoid stocks like Zillow (Z), which gets most of its revenues from realtors. Everyone else: Insist on a lower commission if youâre buying or selling a home. This is a great thing for America. The ending of the realtor cartel puts tens of billions of dollars back into the pockets of homeowners. But I wouldnât want to be a realtor today. - Nvidia just revealed its latest AI chip on stage⦠Itâs 3X to 4X faster than the best chip on the market today, and up to 25X more efficient. Hereâs CEO Jensen Huang holding the beast (left side): Source: Nvidia As you surely know by now, Nvidia (NVDA) is one of the best businesses in history. It buys silicon wafers from Taiwan Semiconductor (TSM)âwhich makes the chips from 3 tablespoons of sandâfor roughly $700 apiece. It then packages the chips and sells them to the likes of Google (GOOG) and Microsoft (MSFT) for $50,000! Itâs one of the biggest markups in historyâgreater than any Louis Vuitton bag or Rolex watch. But Nvidia is moving too fast for its own good. Its AI chips are 100X faster than they were a decade ago.  All the other parts that make up a data centerânetworking equipment that allows the chips to âtalkâ to each other and so onâhave only gotten about 4X faster. This creates a major bottleneck where Nvidiaâs chips can only work 30% of the time. The other 70% of the time, these $50,000 chips sit idle⦠but still take up full power. Itâs like driving a Ferrari in Manhattan. You can only go so fast. Nvidia will keep on winning. But I expect a lot of spending to shift toward the lagging parts of the data-center equation: cooling equipment, storage, next-gen fiber optic cables, and so on. We took profits on Nvidia (again) [inside Disruption Investor last month](. Itâs time to reinvest those profits into other AI infrastructure winners. - When it comes to AI, donât forget these 11 words... This is the WORST artificial intelligence is ever going to be. [I wrote that when the debut of ChatGPT stunned everyone last year.]( The latest AI models already blow that old dog out of the water. GPT-4 is 10X smarter than the âfreeâ version of ChatGPT. It can âseeâ images⦠analyze videos⦠talk to you with a natural-sounding voice⦠and remember questions you previously asked it. Iâm shocked by how fast AI is advancing. ChatGPT creator OpenAI had a big lead in AI. But in just the past month, two models that rival GPT-4 have been released. French startup Mistral AI went from zero to creating a GPT-4-level model in just nine months. Amazing. And last week, Anthropic released Claude 3, which beats GPT-4 on many tests. Iâve enjoyed using the âPiâ app on my iPhone. Itâs like an AI assistant you can talk to and ask questions on the go. Pi remembers our past conversations and always understands my thick Dublin accent. Start using AI in your daily lifeâseriously. Soon, people who donât know how to use AI will seem as ancient as folks who canât turn on a computer. If youâre on the âfreeâ version of ChatGPT (GPT-3.5), upgrade to GPT-4. It knocks the socks off its predecessor. GPT-4 and Claude both cost $20/month. Pick one and subscribe. AIs donât come with a âhow toâ manual. You just need to play around with them to learn how they can help. Think of âjobsâ that take up a lot of your time. Maybe itâs a mundane office task or helping your kids with their homework. See if AI can help. A recent survey found only 5% of firms are using AI. To butcher an old Jeff Bezos quote, âTheir laziness is our opportunity.â Today, we have a small window to master this powerful new technology before the other 95% of the world wakes up. What a time to be alive. - Todayâs dose of optimism⦠New data from the UN shows the number of kids dying before their fifth birthday fell below 5 million for the first time in recorded history: Source: World Development Indicators This is great news, but we must keep climbing. It makes me sick knowing 4.9 million children still die. When you dig into the data, the problem is clear. The under-five mortality rate in poor countries is 13X higher than in rich nations. To save kidsâ lives, we must embrace capitalism and innovation, which have proven to be the greatest wealth creators in historyâespecially for people at the bottom globally. Choose (real) capitalism. Stephen McBride
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