Remember this message if nothing else⦠[RiskHedge Report] [Stephen McBride]
The most important 11 words of the AI boom By Stephen McBride - RiskHedge When it comes to AI, you canât forget these 11 words... Over the past few weeks, Iâve shown you where we are with AI today, and where itâs going... I showed you how to profit. And why you canât ignore whatâs happening, even if you donât plan on buying an AI stock. But hereâs the overarching message I want you to remember if nothing else: This is the WORST artificial intelligence is ever going to be. There are all kinds of problems with ChatGPT, the new AI tool taking the world by storm. The chatbot, which can have human-like conversations, became the fastest-growing product in history... gaining 100 million users in just two months. But itâs politically motivated. It talks like a San Francisco liberal... and is often flat-out wrong. To some, it may seem like a silly toy. None of this matters. The important thing to understand is right now, ChatGPT is the worst it will ever be. These systems only improve over time. And the speed at which these advancements are happening right now is truly incredible... We saw how rapidly AI systems are improving in the past few weeks. OpenAI, the creator of ChatGPT, debuted GPT-4 last month. It blows away the first ChatGPT. Researchers put both systems through a gauntlet of real-world tests, including the bar, SAT math, and GRE business school exams. ChatGPT barely passed most of these tests. GPT-4 blows them out of the water. It scored in the top 10% on the bar exam. Thatâs remarkable when you consider the chatbot didnât undergo any specific training. Bryan Caplan, professor of economics at George Mason University, put ChatGPT through its paces in December. It could only muster a D grade on his midterm. Not only did GPT-4 score an A on Caplanâs new exam, but it achieved the highest grade of any student! GPT-4 is the real deal. Itâs not your fatherâs clunky AI. OpenAIâs new system comes with new capabilities, too. For example, it can understand âcontextâ in images, as shown in this example: Source: OpenAI Using GPT-3, UK-based startup DoNotPay built a chatbot to negotiate fines like unwarranted parking tickets for customers. It kind of worked. But the bot often needed manual intervention. DoNotPay adopted GPT-4 and achieved a major milestone. The bot âtalkedâ to Comcastâs online customer service and managed to save someone $120 on their broadband bill. According to the startup, itâs the first time a bill has been negotiated purely by AI. How is GPT-4 so superior to its predecessor? My colleague Chris Wood and I talked about the new âAI lawâ in [this RiskHedge Report](. In short, with every 10X increase in the amount of data you feed into an AI system, its quality doubles. So to boost AI performance, researchers are using ever-greater amounts of data. When it comes to AI, bigger is better. Researchers didnât stuff 10X more data into GPT-4. GPT-3 has 175 billion parameters, while GPT-4 has 100 trillion parametersâa roughly 500X increase. Other AI tools are advancing rapidly, too. Take image generator Midjourney, for example. Midjourney V1 debuted less than a year ago. Look at how much better V5 is at creating photorealistic images of Mr. Bean: Source: Wired AI isnât some far-off tech with the potential to change the world in 10 years. Real breakthroughs are happening now. GitHub Copilot is an autocomplete tool for coders built on OpenAIâs tech. Instead of humans having to write every line of code themselves, the software predicts what theyâre trying to code and offers suggestions. Coders using Copilot finished tasks in 55% less time, on average. Imagine a tool which could boost your productivity by 50%. Thatâs a total game-changer. Iâm predicting there will soon be âCopilotsâ for lawyers, accountants, doctors, and everyone else. Vast fortunes will be created by companies harnessing this powerful new technology. Hereâs a useful analogy on how to profit from AI⦠Refrigeration was one of the most disruptive inventions of the 20th century. Being able to preserve food totally changed how Americans ate and cooked. But do you know who invented the refrigerator? It was a company out of Detroit, Michigan, called Kelvinator, which youâve probably never heard of. Investing in Kelvinator wasnât the best way to make money from the rise of refrigeration. Instead, you wanted to bet on upstarts harnessing this powerful new technologyâlike Coca-Cola (KO), which built a $270 billion empire making cold, refrigerated drinks. In my Disruption Investor advisory, weâll continue to invest in companies powering the AI revolution, like Nvidia (NVDA) with its specialized GPU computer chips. Weâll also invest in firms currently using this breakthrough tech to disrupt massive, important industries. If you missed my talk with Chris Wood on thisââHow to Act on the AI Revolutionââyou can still watch it [right here](. Stephen McBride
Chief Analyst, RiskHedge In the mailbag⦠Over the weekend, we heard from several readers about our recent RiskHedge Report, â[How I learned to stop worrying and love AI](.â Here are what a few folks had to say: I think the risk from AI is that it could lead to political dominance. Kinda like Google achieved in search. Musk knows all the players leading the AI research and probably also knows that a pause is impossible with so much money and power at stake. At least by proposing the pause, he is positioned with the good guys if the outcome turns bad. All the good stuff you point outâand probably a lot moreâis also true, but let's get to nuclear power without the bomb. âRay Alec wrote: I agree with you and also eagerly await the advances AI is going to enable, from biotech to healthcare, software developer to educator, lawyer to executive assistant. And hopefully even fed fund rate setter. However, I also agree with the pause idea after listening to Max Tegmark on a recent Lex Fridman podcast. The pause is to allow society to start figuring out what sort of âseatbelts and guardrailsâ this new technology requires to keep all safe. If AI stays at this inert machine-learning level, then the pause is moot. The problem is IF it makes the jump to AGI and then we have a super-intelligent, conscious, non-human species on our hands. Then it becomes much more than just a better pattern-matcher than humans. Maybe it will never make the jump to AGI, but six months is nothing in the scheme of things to pause to do some reflecting on the issue just in case we do happen to create an existential threat. Thank you for your optimistic articles. âAlec Angela said: Feels like the people asking for a pause have some selfish motive. They are late to the party and will appreciate a pause so that they can catch up. âAngela Mark wrote: If we don't use AI to help solve the problem of climate change, we won't be around long enough for AI to harm usâor perhaps AI will put us out of our misery. âMark And hereâs Dwayneâs take: AI can and will do great things, BUT we are creating a whole new sentient being that can be controlled by maniacal fanatics, and therein lies the danger. If all people were good, caring individuals, I would have very little concern. Unfortunately, thatâs not the case. It will impact so many things and blur the line between what is real and what isnât. Its power to control people will be immense. Once the control is established, I see freedoms being violated and a world like 1984 [becoming] a real possibility. It needs immense oversight, and that may not even matter. âDwayne Suggested Reading... [One Week to Go:
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