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Imustaskforhelp

Exactly.

I feel like this tbh:

AI Skeptic: Sure its profitable but its a bubble...

AI guru: Sure it may be a bubble but its profitable...

Pick your sides logically because bubbles (by definition I think, are profitable till they aren't)

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Most people doing some investing have heard that diversification is important, but I think a lot of people forget that thit employment sector is part of that. I keep thinking of those Enron employees whose 401ks were all stock in their own employer.

As software engineer, that means there are reasons to avoid investing in AI stuff, regardless of what I think about its trajectory.

In this case I feel like it's the opposite. If generative AI really succeeds, most software devs will be out of job, in which case profits from those investments could become useful. If it flops, then there's a greater chance devs will be still needed.

If these things really become good enough to automate software engineering then it’s just a matter of time before they are used to automate all information work.

That would be such a radical societal transformation that I’m not sure we would come out of the other side even having a capitalist society.

They aren't symmetric sides of a coin though.

1. If you become unemployed because it "succeeds", then a diversified portfolio probably does well as other industries reap the benefits, and if you have to cover lost wages you're at least "selling high."

2. If you become unemployed because it "fails", then there's a crash/recession where everyone is spooked and you get screwed by being forced to "sell low" during the transition.

I suppose there's also the chance you're put out of a job by powerful AI, but the "winners" are all lesser companies you never invested in, so you lose both your job and investments.

As AI skeptic I must also present question how profitable? Unlike previous "tech" and products. There might not be marginal costs for extra units. Instead each generated answer or message use significant amount of power and needs large physical investment in infra.

And if generating those messages are cheap, well there might be competition as price maters more than quality to enough of users.

Yup.

See, I am not an AI skeptic in the sense that I don't think the tech is great, I mean its kinda great but its also a lot overhyped tbh, but I mean its definitely a mix bag of opinions for me imo

But there are some people who think that just because a tech is great fundamentally makes it oh so lucrative and profitable.

That is the one thing that I really really took away from intelligent investor. And I think he even paraphrased it that this should be the one thing you should take away from the book iirc but I am not sure

Its that, just as how historically airplane companies have been kinda bad in profit even though they are technologically marvels. It doesn't matter the tech if there is a P/E mis-match imo / stock price is overvalued.

The same goes for tech.

You can appreciate tech while still thinking that its sort of being a bubble/shit's not good.

What are your thoughts?

Truth: its only profitable for nvidia, everyone else is just setting cash on fire. talk of bubbles is irrelevant.

Phase 1: Collect underpants. Phase 2: ?? Phase 3: Profit.

Everybody has starry dollar signs looking at last part. CEOs are really bunch of pretentious little boys (and few girls) cargo culting each other, and showing very little innovation or originality... Clearly enough for markets, till its not.

There’s maybe a better way to phrase it but you’re 100% correct re: innovation/originality.

I think the article points quite well out, these profits cannot be taken at face value, if they are financend by Nvidia in the form of investments.

It's profitable for a large swath of hardware and datacenter adjacent companies. Look at AVGO, now trading at 1.5 trillion (which may or may not be overvalued, but the ryzen evaluation does reflect significant windfalls from AI spending). Optical interconnect/photonics companies, actual server rack builders, you name it, the pick and shovels companies are having an absolute boom in real terms, not just valuations.

… Wait, what on earth makes you think it’s _profitable_?! Are you using WeWork’s ‘community-adjusted EBITDA’ (a measure of ‘profit’ that was basically just revenue) or something?

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