AI hubris has got itself in a bind, trapped between two conflicting stories, neither of which seems likely to end well. One story has the boys in the billionaire’s club throwing untold sums of money at a technology that seems increasingly unlikely to produce commensurate returns. The other story has been threatening whole sectors of the economy with creative destruction: software development, financial, legal and accounting services, money management, entertainment and even trucking. Each day, there’s a menacing new headline about some industry whose workers, mostly white-collar, are about to be replaced by thinking machines.
The recent trucking news concerned the logistical problem of routing vans so that they are filled with cargo all the time. Artificial intelligence has taken on this challenge, squeezing out inefficiencies in ways that human workers could not have imagined just a few years ago. The shares of companies that do this work crashed last week, victims of AI’s Grim Reaper. It won’t end there, either, since driverless fleets of trucks are coming, and soon. Humans will be needed to load and unload them — that is, until Musk robots come along to relieve them of their jobs.
A Chimpanzee Reflex
Whenever creative-destruction stories hit the tape, the chimpanzees entrusted with America’s 401(k) savings instantly dump the shares of all companies likely to be impacted. The trouble is that the list is growing so fast that it has become hard to imagine an area of the economy that will not be affected. We are talking mainly about job losses, and there seems to be no end to the number and variety of positions in AI’s crosshairs.
So what’s an investor to do? Our money is on Musk, arguably the only player with a strategy imaginative enough to encompass and integrate AI’s myriad possibilities while also tackling its biggest challenges. Some laughed at his demand for a trillion-dollar paycheck, but it grossly understates his ambitions. With plans to be on the moon in just a few years, he is thinking not only outside-the-box, but outside-the-planet. Lunar manufacturing and assembly done by robots will not only solve the problem of how to cool and power GPU server farms, but also provide a low-gravity launching pad to slingshot building supplies to Mars. Humans will get there in rockets, already engineered, that can be refueled and reused within hours of returning to Earth.
Musk has repeatedly demonstrated that he can take multibillion-dollar losses without flinching if an idea hits a dead end. The tens of billions he supposedly overpaid for Twitter has come to seem like relative chump-change for him. And he has the technological means to put Uber, Lyft, Waymo and even Apple out of business in mere months if he wanted to. But he has bigger fish to fry. Musk will be the last man standing when the huge AI shakeout now under way buries the Billionaire Boy’s Club (although not Palantir’s Alex Karp, whose mind is as sharp as Musk’s). Musk makes them all look like amateurs, and the planned merger of SpaceX and xAI, his AI startup, will be the most significant business deal ever hatched. Take a piece of it and you can’t lose. [Here’s a link to my latest interview with Jim Goddard at HoweStreet. The headline alludes to ‘downside targets for silver and gold,’ but that was but a minor concern in this interview. RA]
