AI Melt-up to Meltdown

AI is already smarter than the average human. Next stop, Chimpanzee...

Where to begin...

When OpenAI was founded ten years ago it was intended to be a non-profit organization scrutinizing the work of the AI industry to ensure the best outcomes for society. As has been thoroughly documented in the book Empire of AI by Karen Hao, over time OpenAI morphed from a non-profit to a partial profit to a take no prisoners porn purveyor which is where it is now. The safety concerns that OpenAI was tasked with monitoring fell into the following categories: societal impacts, environmental impacts, and economic impacts. Which I will use as the basis of this blog post. In addition, I am adding another category - financial market impacts. Because suffice to say no one predicted that AI would be moving global financial markets as it is now.

First off, the most lethal and worrying aspect of this AI financial arms race is that there is STILL no standard definition for Artificial Intelligence within the Tech industry, which means there is no agreement as to when it will be achieved. Therefore there is no actual finish line for the financial arms race taking place right now. It will be a race to see who implodes LAST. In the industry, they call the mythical AI nirvana "AGI" Artificial General Intelligence, implying that it will be so ubiquitous that it will be generally unquestioned. What part of the planet, the economy, markets and society will still exist in this digital Matrix is to be determined. The problem with AI is something called the "Scale of 9s", meaning that reaching finite precision becomes increasingly more difficult and costly the closer you get to "perfection". Here is an AI summary of the scale of nines problem in AI:

Google AI Overview:

"The "AI scale of nines problem" refers to the difficulty of achieving and verifying extremely high levels of reliability—often described using the "nines" metric—in artificial intelligence systems. While a system with "five nines" (99.999%) reliability is considered excellent for many applications, the tiny remaining failure rate becomes catastrophic when AI is used in high-stakes situations, like autonomous vehicles or medical diagnostics."

This is where for example self-driving cars could seem close in theory, but it could still take years for local governments to allow cars to be driven without anyone in them. Consider that passenger jets have been able to fly unattended for decades, but there are still pilots who are basically baby-sitting the airplane.

Among the impacts that OpenAI was chartered to monitor are the impacts to society at large. How does AI affect mental health for example? The company started out with a firm commitment to ensuring the safety of all users. However, ten years later and now they are turning to the porn model to bolster their paltry revenue. Recall that they have $13 billion of revenue against a commitment of $650 billion in future infrastructure costs.

"Sam Altman is free to pursue his goal of using artificial intelligence to cure cancer after signing off on another apparent priority: allowing OpenAI to create pornography."

Plans change, right?

I won't go fully into the environmental impacts of AI but suffice to say the plans for AI hyper scaling will be catastrophic not just to electricity consumption and carbon output but also to local water supplies. We all know that climate deniers don't want to do anything to reduce carbon output, but AI is actually going to ACCELERATE carbon output and it's now driven by the liberals in Silicon Valley who were chartered to do no harm. Thanks to them we are now accelerating in the wrong direction on the environment.

Here is the cost of electricity in the U.S. already going parabolic.

On the economic side we are getting daily headlines reminding us of the decimation of white collar jobs due to AI. Nowhere was that more poignant than the news this week that Amazon will shed 30,000 office jobs so it can ramp up AI spending to $100 billion per year. Wall Street loved the plan.

Which gets us to the financial impacts of AI that are now moving global markets on a daily basis thanks to Sam Altman/Jensen Huang and their serial pump and dumps of the largest mega cap Tech stocks in the world. One after another we've seen parabolic moves by Nvidia, Taiwan Semi, Oracle, Broadcom, Seagate, Palantir, AMD, Micron, KLAC Tencor, Lam Research, SK Hynix, Microsoft, Google.

Now after hours Amazon and Apple.

Why? It was their turn.

Today it was Google. But as we see it ended at the lows of the day:

Here we see Micron record overbought.

You get the idea.

But what I've shown on Twitter is that while these AI beneficiaries make parabolic moves and enjoy their newfound riches, the remainder of the market is already imploding deja vu of February.

In summary, the plan is to build hundreds of massive new environmentally disastrous data centers deploying millions of Nvidia GPUs to generate AI porn, until we reach the yet to be defined AI "nirvana". At which point the economy will be destroyed and replaced by AI bots, who never go shopping.

OR, this financial bubble collapses like a cheap tent, sooner than later.

Position accordingly.