Although the biggest players in the tech world have sunk trillions of dollars into AI research and development, none of them has made a dime. Will they ever? That’s a reasonable question, considering no one really knows how AI will reshape the economic world, other than eliminating many millions of jobs. The investment frenzy continues to gain momentum nonetheless, recalling the South Sea Bubble of the ‘roaring’ 1720s. A widely quoted item from that era was a prospectus for a company claiming to be carrying on “an undertaking of Great Advantage but no one to know what it is.” One could argue that it’s different this time, but is it really? Quite possibly not, considering that Bitcoin, a currency with no intrinsic value, has increased in value from an initial $0.003 in 2010 to a current $118,000. These are crazy times, and nothing drives people crazier than the prospect of thousandfold returns on their savings. However, before you plunk down your own hard-earned dollars on a flight of fantasy, check out my recent interview on Howe Street. (Note: I make an exception for Nvidia shares, for reasons that are explained in the interview.)
“One could argue that it’s different this time, but is it really?”
The moment I read that question, the first thing to come to mind is the same question posed by someone else, maybe a decade ago.
A man named Rob Ager did a documentary on the AI scam and started with the history of the very first chess-playing “robot”. It was built and heralded as “the future”, either in the 1700s or 1800s, but was just a man dressed up as a mechanical man and making mechanical-like motions. Fast-foward to the late 20th century…
Mr. Ager then cited the famous Garry Kasparov vs Deep Blue controversy. One can look up “Deep Blue cheating” and read all about that. Nothing has ever been proven, but for people with nothing to hide, the IBM team sure did act guilty! It should be noted that, following Deep Blue’s alleged victory over a chess grandmaster, IBM’s stock rose substantially. If they had nothing to hide, they could’ve and would’ve dashed all allegations of cheating and seen an even bigger rise.
Ager then used the Deep Blue example to show that things hadn’t much changed from the time of the very first chess-playing “robot”. And I’ll go a step further and say that Elon’s Grok is probably just a bunch of guys from India (Elon has a permanent hard-on for guys from India), perhaps utilizing limited capability AI and making extensive use of that revolutionary copy-paste feature.