When dial-up internet hit the scene back in the 90’s, I don’t think any of us knew what kind of game-changer it would ultimately be.
The internet truly changed our collective journey as human beings.
Who would have guessed our AOL chat rooms would blossom into the social media mayhem we experience today? Imagine trying to explain our current social media mental health crisis to your past self.
In our current world, the AI frenzy is the latest chapter in our technological evolution. It’s driving most of the market returns at the moment, and we’re not hating on it. At least not completely.
We just funded our very first AI deal, $1mm to a California company in the gaming space. Totally worth a little humble brag in the funding department.
However you feel about the current state of AI, it’s certainly worth watching how it all plays out.
Here, we’re highlighting the latest in the AI world and how all the hype fits on the journey.
Going to Extremes
At the beginning of last week, Fox featured economist Harry Dent, who’s predicting the bubble will finally pop in 2025. He also says it’ll be worse than 2008.
Dent predicts this “bubble of all bubbles” will include the downfall of big tech stocks, most of which have been propped up by artificial stimulus. Smoke and mirrors, as we know.
He also says that the real estate market is front and center of this whole thing. Dent predicted that housing would see 2012 lows this year, claiming homes are already double or more what they’ll soon be worth.
On the bank side, reports of new problem children are being added to the list. The number of troubled lenders as identified by the FDIC increased from 52 to 63, with assets totaling $82.1 billion.
The back half of 2024 has investors in fear of more failures, and these fears are valid.
One thing’s for certain, the AI craze has provided some very historical results in the markets.
The three largest companies in the S&P 500 (Nvidia, Microsoft, & Apple) now make up a record 21% of the index. In the words of Charlie Bilello, large cap growth investors are partying like it’s 1999 (or 2000).
Nvidia is the current king of the AI dynasty. It just passed Apple and Microsoft to become the largest company in the world and it’s now valued at a whopping $3.33T.
To hold the throne, Nvidia will have to keep up its lightning-fast growth while hanging on to record breaking profit margins. A rather tall order.
The markets are absolutely loving the Nvidia effect. The S&P 500 recently closed at its 31st all-time high of the year and crossed 5,500 for the first time ever.
As we know, all raging parties must eventually come to an end.
Do we have enough Gatorade and Advil to fight off the inevitable monster hangover? Only time will tell.
Cali Crazy
What would a tech-related update be without a little California insanity of the virtual kind?
SB 1047 just passed in the state Senate and it’s ruffling some feathers. In a nutshell, the bill aims to put some safeguards into place around AI, which sounds good on the surface.
However, if you look under the hood, you’ll find that the bill really puts the future development of AI into the hands of a select few. Not to mention the whole idea is based on the fear of a group of non-profits who think AI will end the world.
They thought NFTs were going to replace Picasso, too.
SB 1047 would also create a ton of regulatory red tape, discouraging home grown future tech geniuses from creating anything groundbreaking in California.
If other states follow suit, talented minds might take their talents overseas. China’s working on their own rival to OpenAI, complete with advanced video generation models.
It might be human nature to tighten the reins out of fear, but it may be better to let things play out on their own.
From our current vantage point, it’s hard to tell if AI will have a detrimental impact on humanity. We could very well laugh about it all 20 years from now, like when we reminisce about Y2K.
The Ultimate Boon?
According to the concept of “creative destruction,” innovations in our economy inevitably result in the downfall of outdated industries.
The rubble left behind gets paved over, and the new gets built on top. Bad for the legacy, great for underdogs.
Wins like the ones created by our current wave of AI hype are pivotal moments on the journey. And we love to see people winning.
Joseph Campbell might even call these wins a hero’s victory, or the ultimate boon.
In the right hands, this ultimate boon is a trophy and testament to a hero’s hard work and determination. In the wrong hands, the whole thing could become a huge flop and change things for the worse.
Whichever way you slice it, a victory like this isn’t the end. It’s actually the beginning of a whole new journey entirely. One with new battles, harder levels, and even more uncertainty to surrender to and master.
We hope AI won’t kill us all, but we’re all on this ride whether we like it or not.
Just like our lives after the internet, life will be different and we hope it’s for the better.
Here at Dare, we’ll help you reach your goals, no matter what storms rage outside.
Through our Back Room Service, you’ll get access to:
- Greater Income (like a lot more)
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Eager to learn more? Give us a call.
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Until next time,