Money & Markets: AI is the investors’ Next Big Thing

Back when I was a child the first published piece I wrote was an AI short story in the July 1982 issue of Practical Computing.

AI is rapidly becoming the next big thing in financial markets, and it's not hard to see why. With the ability to analyse vast amounts of data and make decisions faster than any human could, AI is transforming the way that financial institutions operate.

No wait… I didn’t write the above paragraph; OpenAI’s ChatGPT did (see sample video online), and if you type ‘Write an 800 word article about AI being the next big thing in financial markets’ you will get an article the length I’m writing that will take you through the whole enchilada, without the use of the cliché, ‘the whole enchilada.’

It is clear now that AI has made a step-change in potency. Dictation was the early sign AI was starting to be real, and self-driving cars seem spookily clever to old fogies like me, but to watch a computer write very passable articles in seconds, even if they are voiced like a patronising schoolteacher, is borderline jaw-dropping.

Couple this type of text with the other new AI tech like deep-fake presenters and AI-generated images and music, and suddenly all kinds of opportunities open up. Even then that is just the tip of the iceberg, an iceberg made of pure gold, which of course is not a phrase an AI would write, at least not yet.

And the AI said ‘Let there be spam’. Get ready for that, because that is what AI is writing now, but as we know, ‘There is money in that thar spam.’

ChatGPT agrees: “It is unfortunately true that some individuals and organizations are using AI to create spam for financial gain. They may do this by using AI to generate large volumes of spam emails or by using AI to create fake online profiles…” I asked it to write 2,000 words on it, but it only agreed to give me 400 and it didn’t mention that the spam is going to be glib but long articles on any subject that will generate SEO (search engine optimisation) or human traffic.

The thing about the markets is they are driven by technological epiphanies fired by use, and as ChatGPT rips through human consciousness as it is doing now, at some point soon investors will pile in. This may take longer than normal because the tech markets are midway through a financial crash, and greed and markets work best when they are rising rather than beating down on their participants. However, it is just a matter of time before the balloon goes up.

In comparison to the havoc AI will wreak, crypto is going to seem like a ‘nothing-burger’. This should be the headline.. but let’s ask ChatGPT. Apparently, it should be: ‘The Dark Side of AI: How Artificial Intelligence Could Cause Havoc in the World.’

(This is me now by the way.) The havoc is currently framed as a classic luddite fear of lost jobs but we should know by now that automation creates more and better jobs. The real havoc comes about because AI = energy because ‘tensor cores’ on silicon create two things from electricity, results and heat. In ‘winner takes it all’ competitions like business, politics or war, if AI truly transcends human smarts like it does in chess, then those with the most AI win everything. There is no second place. The winner will be the competitor with the most AI and they will be the competitor with the most computing and therefore the most energy consumption, just like it is in crypto mining. There won’t be any mechanism to defang AI’s energy consumption arms race and no way to control it at, for example, state level. The type of folks quite happy to rain down death on opponents since recorded history are not going to play nice with AI.

The point where a serious AI energy consumption arms race commences is probably a long way off, but if AI is real and practical, and it is hard to argue it isn’t now, then that moment has to come. Between then and now, and until AI puts us thick violent monkeys back in our box, there are vast new fortunes to be made.

The AI agrees:

There are many fortunes to be made from AI. As AI continues to advance and become more widespread, there will be numerous opportunities for entrepreneurs, investors, and companies to profit from the technology. Some of the ways that people are already making fortunes from AI include:

• Developing and selling AI-powered products or services: Many companies are already using AI to create innovative products or services that are in high demand. For example, companies that develop AI-powered software for use in industries such as healthcare, finance, or transportation are likely to see strong demand for their products.
• Investing in AI-focused companies: As AI becomes more prevalent, companies that are focused on the development or use of AI are likely to see strong growth. Investors who are able to identify these companies early on and invest in them are likely to see significant returns.
• Starting an AI-focused business: There are also many opportunities for entrepreneurs to start their own businesses focused on AI. Whether it is developing a new AI-powered product or service, or using AI to improve existing products or processes, there are many ways to leverage AI to create a successful business.

Overall, it is clear that AI is creating numerous opportunities for people to make fortunes. By staying informed about the latest developments in AI and identifying opportunities early on, it is possible to capitalize on the technology and achieve significant financial success.

(Back to natural stupidity)… but there is hope for humanity yet because the real answer is, invest early in listed players, sell out when the mania strikes and valuations go incredibly high, let the bubble collapse, then buy back into the survivors. For now human = terse and profound, AI = glib and long winded.

So say I.