dkrich

This five year prediction seems odd to me. Autonomous vehicles have to navigate in a world that was designed for human driven vehicles. If you were to design an autonomous transportation system in the middle of New Mexico from scratch it would almost certainly look nothing like what we have today which is comprised primarily of visual cues designed to be highly noticeable to human eyesight. That’s to say nothing of cars themselves being designed around the assumption of a human driver.

I guess what I’m trying to say is that it’s very difficult to imagine that if AVs take over let’s say over the next 30 years that the end result will still be running on the same infrastructure we rely on today and that if we will still be a society where most people drive most of the time that AVs will really be all that transformative in the first place since they would be filling a sizeable but still relatively small use case- taking a cab around a major city. I can’t tell whether it’s the amazement of seeing a driverless vehicle or the actual utility of it that generates the excitement

This has been a phenomenon of the endless liquidity train of the past 3-4 years. People doing very stupid things with money knowing more is always coming. There are certain stocks like palantir that are very obviously in bubbles where the market celebrates its inclusion in a stock index and sends the shares up 15%. The CEO just self produced a video recognizing retail traders and using the term “tendies.” The mistake this cycle though has been to assume that won’t work

The other main difference that I can’t get past is that the Internet and cell phone were so obviously useful to a layman that you didn’t really have to explain the value proposition.

The ability to type an email for instance, and send it instantly to someone on the other side of the planet for free was something that was in such contrast to the tools of the time it can’t really be understood by someone who didn’t live through that period.

AI to me is really hyped up by some very highly regarded CEOs with strong track records in other domains and tech enthusiasts who seem hell bent on being able to look back and say they called the next Industrial Revolution. In short everyone thinks they’re the counter to Paul Krugman saying the internet would be as useful as the fax machine. Credulity levels are off the charts. It’s gotten to the point where skeptics are automatically assumed to be wrong.

But what’s missing is the obvious amazement that should come to an ordinary person and frankly I still don’t see most people naturally gravitating to these tools.

Perhaps that could be explained by how amazingly fast technology has advanced in recent years but then that in and of itself seems to call into question whether this technology that’s being called AI is truly revolutionary when compared to what’s already available.

It’s valuable for use cases where the problem is “I don’t know the answer to this question and don’t know where to find it.” That’s not in and of itself a multibillion dollar business when the alternative doesn’t cost that much in the grand scheme of things (asking someone for help or looking for the answer).

Are you suggesting a chatbot is a suitable replacement for a teacher?

Let’s call it for what it is- taking poorly organized existing information and making it organized and interactive.

“Here are some sharepoint locations, site Maps, and wikis. Now regurgitate this info to me as if you are a friendly call center agent.”

Pretty cool but not much more than pushing existing data around. True AI I think is being able to learn some baseline of skills and then through experience and feedback adapt and be able to formulate new thoughts that eventually become part of the learned information. That is what humans excel at and so far something LLMs can’t do. Given the inherent difficulty of the task I think we aren’t much closer to that than before as the problems seem algorithmic and not merely hardware constrained.

This sounds good in theory. Then you try to use these tools and they don’t really make you more productive. More like asking someone for help, them giving a half baked response, giving up and walking away.

I had a conversation recently about this very thing. They were complaining that Salesforce is very hard to learn, even for simple tasks.

I asked why not use AI assistants? Because in practice they just aren’t capable of connecting the dots between documentation and configuration to complete the task at hand at the required level of customization. And that gap that exists between how things are stated to work and what’s actually required is where a lot of jobs are done and AI isn’t close to fixing. Which is why I still remain convinced that what’s being called AI is nothing more than a marketing tool to sell enterprise software and that jobs are going to be destroyed by it.

Right now I’d say it’s 5% functionality and 95% marketing hype for companies that want investors to believe they are innovative. For the most part these companies are just incorporating chat bots and inaccurate abstraction layers into their platforms and calling it the greatest transformation in history. What feels off to me is that most of these people don’t have great track record with these types of predictions and are historically trend followers.

The most interesting thing about this is that everyone just forgot all the anger about the spying from a few years ago during the Cambridge analytica thing. Did that just go away?

We are at a very unique time. The stock market has basically been in a bull market for 15 years with some very short-lived sell-offs along the way. During that time we've had some incredible innovations such as the iPhone, FANG stock dominance and unprecedented profitability for years.

You've also had three or four bona fide bubbles in that span, starting around 2017. First was Bitcoin along with the stock market as a whole (with Nvidia being one of the leading stocks of that bull market advance).

Then you had Tesla go parabolic and lots of people become rich. Then you had the whole post-COVID speculative mania.

The result of this has been extreme credulity by the average person. Today's keynote is the perfect summation of this phenomenon. I saw multiple people who almost certainly couldn't explain in any level of detail how Nvidia GPUs are used for training and inference, but rather rely on the secondhand talking points like CUDA that they've learned by watching Jim Cramer, watching this keynote with excitement and anticipating how much it would pump their shares or call options.

Contrast this with Steve Jobs keynotes from 15 years ago when Apple's best days were well ahead of them. Most keynotes were questioned, in some cases even mocked. When Tesla stock broke out, many people couldn't make sense of it. Ditto for cryptocurrencies. But now, taking their cues from those cycles, the average person wants to ride the next bubble to riches and is trying to catch the wave and so now believes every story attached to a rising asset price.

CEO's aren't blind to this and are using every opportunity to create favorable storylines. The leadup to a keynote like this carries with it an enormous amount of pressure to deliver. Hence a company like Nvidia leaning into generative artwork and straight up made up storylines like robot development.

At the end of the day, I'm afraid that there likely isn't all that much substance and the evidence is beginning to pile up that the megacap tech stocks have run out of ideas which is why they are laying off people en masse and appealing to the AI hype cycle to carry their stocks higher.

Consider that Nvidia has gone up 8x- 800%!- in just over a year. The cycles are moving faster and faster. I remember just a year ago when lots of people said Nvidia at $250 was insane. Now here we are with the stock at more than three times that level and most people are calling it cheap. The stock market seems to have in certain areas like semis, completely disconnected from the fundamentals and taken flight. Yes, Nvidia earnings have grown. But understand that this is all part of a positive feedback loop where tech CEO's are pressured by their competitors and shareholders to show that they are investing in AI. Thus they all talk about it on their earnings calls and spend massively. All of their stocks rise in unison as you have a market that increasingly looks like its chasing momentum stock trends up. Nvidia's moves of late have almost nothing to do with any fundamental developments in the company. It has been routinely trading upwards of $45 billion a day. The Friday before last that number was over $100 billion. These are absolutely insane figures. Compare that to Microsoft, the largest company by market cap in the world, which trades on average around $8 billion per day.

I think this is generally how bull markets end and I think we may be actually forming the top of the great bull market for the megacaps that began around 2010 but really hit its stride starting in 2017.

This seems asymmetrically good for Google, less so for Apple. If Gemini proves to be an indispensable feature embedded in future iPhones it assists Google in branding and fine tuning. Meanwhile Google can do the same Android and lock down certain features for iPhone users

Nvidia stock is extraordinarily stretched, even by it's own historical standards and it has been really stretched twice before (2017, 2021).

It's a consensus Wall Street favorite. Retail traders who barely know what they do are now being lured in. I think the stock is close to a major top.

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. Judging by general consensus I follow here, on Twitter, and in the financial press, I'd say we are basically at euphoria. Euphoria can last for a bit but not for long. Not only do I not see a ton of upside in the share price here, I think it's a fantastic short opportunity, as when the tide goes out on a stock like this that is totally driven by the idea that it is supply-constrained, if that looks to be in doubt for any reason whatsoever, it is going to fall very far. I'm talking back to the double digits given the amount of supply they are currently producing.

Keep in mind that there are only a handful of companies that can afford these chips at scale and the business model for what they are doing is far from proven. At some point, likely soon given where interest rates are, they are going to need to show a ROI or they are going to be forced to cut spending.

It's a very unique positive feedback loop. Here you have the wealthiest most profitable companies in history that all have a vested interest in not being viewed as waving off the AI hype train. Therefore they basically have to show the street that they're investing which drives up demand for the chips and consequently the price. But you must understand that this process can play out in reverse at 10x the speed. All you need is consensus that spending on AI is suddenly not such a great investment.

I suspect that what you might see happen is earnings for Microsoft, Alphabet, Meta, and Amazon start to suffer. This will require them to cut spending on data center development (unless they are able to show profit growth coming from that investment- unlikely on a short time scale). At that point Nvidia is going to have to cut costs and likely cut back on supply. This is the identical cycle that played out during the last hype cycle, which hilariously, centered on the Metaverse.

OP clearly was using four years to describe Biden’s term to support the idea that he will go down as the greatest President in history. But even if you want to just look at the full covid period it doesn’t belong in the same sentence as the rest of those events. The past decade has been likely the most calm period in American history. But let’s pretend it was the darkest period of the past 400 years lol

Wow I was under the impression it began in 2020 while Trump was still president. I could’ve sworn much was made about his policies about it and I thought I remembered that he actually contracted it while in office. Must’ve been dreaming. Thanks for the clarification.

Early 80’s also had a relapse of inflation.

But to say the last four years which have been some of the calmest in history in the US has been the most challenging is hilarious.

Not the civil war, Great Depression, Cuban missile crisis, world war 2, COVID, GFC, etc.

It had to be sarcasm.

> few terms have been more challenging than the last 4 years.

I can’t tell if this is sarcasm or not

> Then if it actually goes up to an appeals court for more expensive lawyer-work the issue would indeed still be undecided and the pause should continue.

Not sure I understand this logic. There are basically two outcomes- either customs decides it is okay to be imported and the ban is lifted or it decides it should be upheld and the ban remains. If it were to be appealed to a higher court and then have the ban reinstated as you say, why would it make sense to pause the ban and then reinstate it when it goes to appeals since it’s already in place? Seems it should be upheld until a higher authority says it no longer needs to be upheld. I’m not sure I understand why third parties are still allowed to violate a ruling, either.

Also the assumption a publication that’s been around for 150 years is disposable, not the web application that was created a year ago. I’ve been saying for a while that people’s credulity and impulse to believe absolutely any storyline related to technology is off the charts.

A reservation is $100 (refundable) or 1/10th of 1% of the purchase price. That's not a reservation, it's a thinly veiled attempt to pump the perceived success of this launch and share price. They know it, you know it, I know it, and the market knows it.

Talk to me when they require a 20% down payment and I'll believe the hype.

Lots of reasons to make fun of that event but that is a pretty stupid one

Funny because I think it’s weird that Tesla perma bull analysts automatically assume this car will be popular and sell millions without a single person actually receiving one or knowing the prices.

I saw someone post on Twitter the other day a conversation where they asked ChatGPT for recipe ideas for turkey and stuffing with things he could buy at a Trader Joe's in New York.

To summarize the conversation, it basically came back with tacos with turkey and filling, quesadillas with turkey and filling, burritos with turkey and filling, etc.

The person concluded that it was "amazing" and he was headed out the door to Trader Joe's.

I find this kind of false enthusiasm strange and I struggle to understand the motivation to pretend something is useful other than to feel like you are on the same side as the next big thing.

I continue to believe that for a confluence of reasons we are in an era of extreme credulity and that people believe in every new idea with plenty of opportunists to capitalize on it. I think GPU's are at the center of it and every time they cross a performance threshold new use cases emerge very few of which seem to really find product market fit.

I do think when it's all said and done it's going to be great- there will be an enormous excess of powerful chips with nobody to use them and research costs will nosedive. Research should not be solely in the hands of people with the most wealthy backers.

They are lowering prices because demand is falling off. And it's not just one price reduction. They have done multiple at this point. It's one of the worst positions for a company to be in.

Because higher interest rates make everything more difficult. It incentivizes people to save instead of buy expensive cars. It makes it more expensive to finance expensive cars. It makes it more expensive to raise financing to pay for factories and workers. It can very well bring about a recession where unemployment rises and your TAM shrinks.

Tesla is still trying to convince people it is in hyper growth mode constrained only by its ability to supply cars with robots, self driving cars, semis and compact cars all in the pipeline.

Let’s see how that plays out with fed funds at 5.5% for a few more months.

I think their strategy is to charge the highest prices they can, early adopters pay up, demand gets exhausted and they have to keep the illusion alive that supply is the growth constraint, not demand. Demand falling is a death knell for them so that is one thing they absolutely must avoid at all costs.

They want people to believe that the demand is a foregone conclusion and they need to build more factories to satisfy it. But clearly they are trying to maximize the profit. Of course they would like to lower their costs in pursuit of that but it’s not to charge the least they can, otherwise they’d have led with a compact EV instead of an $80k luxury sedan.

I can’t tell if this is sincere or a joke.

Things are only going to get more difficult for them as money gets tighter. Auto manufacturing is a notoriously capital intensive business and running factories with lots of employees is very expensive. You have to make enough money to keep the factories open and the workers employed. I think very soon the new realities of the post zirp world are going to catch up.

Even if this monstrosity was released on time and people actually wanted them (a big if) I still think they would struggle mightily to move them after the early adopters for the simple fact that these are very expensive vehicles. Which brings me to the most incredible point in all this- they are claiming sales when people don’t even know what it costs!

That he makes up products they have no intention of delivering on has been obvious for a few years now. What’s so perplexing is why the market continues to reward it. The company has a $800 billion market cap and an 80 pe.

I suspect it’s on a long road back to reality and being given some premium because of the first mover advantage, but still the company is basically BMW with the illusion of being run by the next Steve Jobs.

This works in a zirp environment after the Steve Jobs era where a single company released one success after the other. People believe anything and have personal interest in pumping claims they know to be at best exaggerated, at worst outright fraudulent.

The problem for Tesla, though, is that we aren’t in a zirp environment anymore so money will become harder and harder to come by and they have exhausted the early adopters. They are already suffering deflation in their prices, having to cut prices to stimulate demand which still seems to result in lackluster numbers relative to valuation.

I don’t see how this company is going to sustain its valuation given the basic fundamentals at play.

BTW, it’s important to understand that Elon is incredibly focused on the share price and his genius perception. This was made evident in 2022 when he split the stock in an attempt to create incremental buyers during a very tumultuous time, but he was careful to do a 3 for 1 split so that the stock price would still be three digits (it was around $900 at the time) so that the perceived value wouldn’t be diminished.

He’s also made reference to the share price and worked frantically on Twitter to try and pump the share price and hurt short sellers on many occasions. CEOs who are overly concerned with share price fluctuations are always a red flag for me and in Elon’s case it is abundantly clear he needs to keep the savior image going. I would not be at all surprised if the timing of the CT delivery event came about due to nervousness over the slumping share price.

I’d question the car analogy. For instance if tomorrow someone introduced a new method of transportation that would be quasi affordable and available to a middle class family and transport you distances in 1/100th the time required by a car there would almost certainly be instant adoption even regardless of economic conditions.

Today, though, I see companies like Tesla and OpenAI and cryptocurrencies gain gigantic enthusiastic followings without a whole lot of evidence of massive adoption and product/market fit. It’s pretty clear that underlying the enthusiasm is an economic interest in their success. That doesn’t alone negate the validity but without the adoption being self evident it’s very difficult to set aside my skepticism.

I remember walking down the magnificent mile in Chicago and going into an Apple Store for the first time and seeing and touching an early iPod nano. I knew right away that the device was an amazing leap forward. I of course didn’t predict the iPhone and Apple becoming today’s apple but I remember the “wow” factor that so many of these newer products lack. Again, I sincerely hope to be proven wrong here as I want better products!

The arc of this story seems very strange to me.

It seems to me that you used to have to work for years to create a product and prove it’s worth in the market place and only then could you convince some wealthy person to back you to make it into a product and eventually a valuable company because the commercial viability was so glaringly obvious. Thomas Edison, Chester Carlson, etc.

But now it seems that has been turned on its head. Assemble a group of brilliant people, back them with a giant company with a highly respected CEO, and wait for success and product market fit to inevitably arrive.

I hate to sound like a downer but it just seems very odd for so many people to talk about how transformative a company is without much evidence that the products are really being used at scale. And the way opportunists like Benioff have piled on to enhance the perceived value of their own products with their own spins feels off. In fact many have openly discussed that Nvidia’s future growth relies on GPT finding product market fit at scale or they will end up with massive supply overhang which would actually cause costs of AI research to plummet, opening the door for many others to work on it. So many are already seemingly aware that commercial viability is still TBD.

I believe all this is likely a product of a period of a string of successful products starting with the iPhone, then Amazon’s transformation of shipping then AWS, etc. Whereas everyone used to be skeptical by nature, it seems now we’re in an age of extreme credulity. Everyone wants to believe in every new storyline.

And I want to be clear that I’m not suggesting that there aren’t some useful applications of GPT. But the value of products should be self evident and consumption of them should flow naturally from demand. This all just feels backwards to me. Success is assumed straight away and historically that tends to coincide with bubbles and precede a pretty nasty crash in sentiment. I’d love to be proven wrong.