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This Is Not Investment Advice
Apparently AI Already “got all the data” so it “knows everything” . . . . But It Never Learns or Remembers . . . . . Market Implications
From time to time I’ve discussed things that I sense could actually impede the ‘Melt Up’ and “run it hot” strategy as opposed to worrying about someone’s opinion on which AI stock they think will crash or should crash. I want to analyze with an open mind all possibilities.
I’ve tried to think through more than once if/how/when everyone simply trying to buy and use more chips than the competitor next door will ultimately shake out. At some point it generally seems like to me we are rubbing all these chips together expecting fireworks by just adding in more chips. Perhaps there are bottlenecks preventing AI from going beyond what much of society views it as right now.
From a recent article at ZeroHedge.com:
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Regarding AI Capex and the ROI from The Market Ear at ZH:
Here are a few snippets from a private market entity that claims to be bringing forth solutions to enable AI to grow through bottlenecks:
Perhaps AtomBeam will be wildly successful with their PCM offering to help the AI ecosystem, and perhaps they will fail. We do not know as of yet.
In a nutshell:
If we ignore worrying about hurting anyone’s feelings . . . . . AI is already hitting major bottlenecks and is fast approaching (or perhaps already has) a point where one really has to question whether added spend and muscle is simply trying to force one gallon of water to be . . . . . somehow more than one gallon of water
AI already scraped all the world’s data but it can’t remember a damn thing or ever learn . . . . . this will get old for consumers and businesses using it . . . . . so what is next?
Market Implications
To me this potentially plays out in addition to signals given by tech credit spreads and equity action. Right now, based on my senses and how it appears to me, we still have a viciously competitive kind of do or die “arms race” with AI where foes are determined to build it bigger, better, and stronger than the next guy. Much of this rests on presumptions that spending more will bring in more “good stuff” that also includes the actual good stuff like revenue.
If this changes, then things change significantly. If engineering challenges become so obvious they impact buyer behavior then we might have something. Can the industry thread the needle and resolve the bottlenecks before customers even notice a transition such that they essentially just keep buying the entire time? Time will tell.
In my view this is a broader and more general concept and discussion. Like the overall ‘Melt Up’ this is not something definitely determined in a snapshot or in one day or by tomorrow or next week. This is an ongoing challenge we need to monitor for many reasons not to mention using it to find new opportunities both long and short.
