This could be the death of AI⦠[The Jolt with Stephen McBride] We can’t let them win Signs of spring are in the air. For the first time in months, there was a glimmer of light in the sky when I was cycling home from the gym. Letâs get after it⦠- Confirmed: Silicon Valleyâs best days are behind it. Tech giants Microsoft (MSFT)⦠Apple (AAPL)⦠Google (GOOG)⦠Amazon (AMZN)⦠and Meta (META) reported results last week. Decent growth apart from Apple: But trouble lies ahead. While the headline numbers were solid, there was much talk on earnings calls about slashing expenses. That should have investors saying, âUh-oh.â Every business peaks at some point. My friend Jared Dillian lived through it on Wall Street. In his new book [No Worries](âwhich Iâm currently readingâhe recalls how, at one point, banks couldnât spend lavishly enough. Then they got rocked by the financial crisis and started focusing on saving money instead of making it. This marked the beginning of the end. Read this quick excerpt: Big tech is going through the same transition today. These are no longer the fast-growing tech disruptors we once knew. Meta even announced its first-ever dividend and a $50 billion stock buyback. This is Meta basically admitting itâs out of ideas. It doesnât know what to do with its money, so itâs returning it to shareholders. This doesnât mean its stock is doomed anytime soon. Companies that donât invest in the future can boost profits, at least in the short term. And Wall Street only cares about what happens next quarter. Thatâs why Meta and Amazonâs stocks surged higher after earnings. But these big tech companies are retreating from the (innovation) frontier, like once-great empires in decline. There are much better opportunities to be found buying up-and-coming disruptors profiting from megatrends. Itâs like buying Apple or Amazon a decade ago. [Thatâs what weâre doing inside Disruption Investor.]( - The AI killer that must be stopped⦠Iâm seeing renewed calls for the government to regulate artificial intelligence (AI). I hate the idea of the government regulating AI. Rule #1 for tech innovators: DONâT LET THE BUREAUCRATS IN. Theyâre innovation killers⦠Hereâs an updated version of what I call âthe chart of the century.â It tracks changes in 14 important prices going back to 2000: Source: AEI Every industry the government touches turns to stone. You can see healthcare and college costs (in red)âboth heavily regulated and warped industriesâsurged faster than anything else. Compare this to the industries that are mostly free from government interference (in blue). Prices down; quality up. AI has the potential to transform America. It can create personalized tutors that turn our kids into straight-A students. It can develop lifesaving drugs at warp speed ([and already is](). It can also create trillions of dollars in wealth for companies and investors. But if the bureaucrats get a stranglehold of AI, forget about progress. Innovation will be replaced with endless ethics committees. This New York Times headline flashed across my screen last week: Source: The New York Times To butcher a line from my favorite sci-fi book, Dune: âBureaucracy is the innovation killer.â We canât let them win. Time to regulate accelerate. - Can you believe these words came out of a politicianâs mouth? My wife and I used to live in Argentina, and we still have many good friends there. A century ago, Argentina was one of the richest countries on Earthâand as wealthy as America. But thanks to decades of socialist policies, Argentinaâs economy is now about as good as war-torn Libya. No bueno. But itâs on the cusp of a major change. Argentina just elected a new president, Javier Milei. Heâs a big fan of capitalism and freedom. Milei recently delivered what techno-optimist Marc Andreessen called âthe speech of the 21st centuryâ at The World Economic Forum. You should [watch the whole thing](, but hereâs my favorite line: âFar from being the cause of our problems⦠capitalism as an economic system is the only instrument we have to end hunger and extreme poverty across our planet.â The worst lie ever told is that capitalism is bad for poor people. Truth is, itâs the best system in history for the less fortunate. Itâs lifted billions of people out of poverty over the last 500 years. I discussed this with a good friend in New York last week. He reminded me just how quickly things can change: âYou wouldnât believe how bad things were in the US and the UK in the â70s. Everyone was predicting Americaâs decline. The IMF had to step in and rescue the UK in 1976.â Then, two pro-market politiciansâRonald Reagan and Margaret Thatcherâgot elected, shook things up, and the vibes shifted from bad to good. America and London roared back, kicking off the historic 1982â2000 bull market, which saw the S&P 500 surge 900%. Iâm hopeful Milei can catalyze a similar shift toward optimism. Not only for Argentina, but the world. Speaking of how quickly things can change, the Global X MSCI Argentina ETF (ARGT) has surged 30% since Mileiâs election. I donât own any, but maybe itâs worth a small punt: Talk to you on Wednesday. Stephen McBride
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