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Talkat t1_itp3sje wrote

  1. Stay up to date on AI. Try out the new tools as they become available, even if it costs you a few dollars per month. You want to stay current to better predict where AI is going and what it will impact
  2. Integrate AI into your workflows and accept the burden. From writing emails, to coding, to clip art for presentations. The more practice you have with AI as a tool, the better you will be able to use it when it improves.
  3. Proactively look for processes in your career where AI can be used to improve the process. This might be out of your current domain (eg another department), but look out for them. If you can build experience in applying AI to existing processes it will be a in demand skill for many years.
  4. Invest a portion of your net worth into companies that will benefit from an AI boom. Tesla is my #1 candidate atm with self driving, their Tesla bot, and as a contender for AGI.
  5. Take care of your health. This is good general advice but you want to position yourself to see as much of the tech change as possible.
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Down_The_Rabbithole t1_itp7tnz wrote

I disagree with your fourth point. Specifically that AI companies will be the main benefactor of AI technology. I think the opposite is true, that AI companies will benefit almost nothing from the creation of AI but that companies whose value generation is bottlenecked by human workers will benefit the most.

Also drivers and physical labor is going to be the last domain to get automated, not the first. Physical navigation and manipulation of physical environments is the hardest problem to solve for AI. Digital intellectual workers will be the first to get replaced.

As Tesla is focusing on the last parts of automation (Navigation and physical manipulation of environment) I expect them to be losers in this scenario.

Industries that will benefit the most are those that are currently bottlenecked by lack of human intellectual workers that could be quickly replaced by AI over the next 5-10 years time. Law firms, R&D, Pharmaceutical industry are most likely to be the big winners, at least over the next 5-10 years time as most of their workers get replaced while also able to scale up their "production" due to having technically uncapped amount of AI "intellectual labor" at their disposal.

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Talkat t1_itpane6 wrote

Thoughtful reply, thank you.

>AI companies will benefit almost nothing from the creation of AI but that companies whose value generation is bottlenecked by human workers will benefit the most.

Hmmm. I have a very hard time agreeing with this statement. I'll share my assumptions:

  1. There a large barriers to entry to strong AI. Meaning a startup with limited resources will not be able to compete with a well funded AI company. The costs of compute are just too high.

AI companies will do the heavy lifting and create a base model that startups can then fine tune and they can raise their costs to eat the profit of their customers who apply it to specific problems.

Physical navigation and manipulation of physical environments is the hardest problem to solve for AI.

Exactly. You want to invest in a company that creates a product that is difficult to achieve because then competitors can't come in and eat their lunch.

Tesla has competitive advantages in data, compute and hardware. They are miles ahead of anyone else. Once they get there they can license the software out.

And AI for driving and bots is more or less the same.

>Law firms, R&D, Pharmaceutical industry are most likely to be the big winners, at least over the next 5-10 years time as most of their workers get replaced while also able to scale up their "production" due to having technically uncapped amount of AI "intellectual labor" at their disposal.

Those with minimal barriers to entry will be eaten by competitors. You will not see an old school law firm start to train their own AI models. This will be done by startups.

And those startups will be paying the model generator (eg; OpenAI) everytime they make a query.

Pharmaceutical companies with the equipment in place, funds for trials, etc. could benefit from it.

Having said that, Deepmind is focusing on making drug discovery easier by (in the future) creating accurate digital cells. That is a way off.. but! that certainly doesn't favour the incumbents.

When a massive disruption hits an industry it is not the existing companies that will benefit from that change. They already have their margins priced in and I think they can only really go down.

Interested to hear any counter points.

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Down_The_Rabbithole t1_itpbtuv wrote

What I meant by saying "physical navigation and manipulation of physical environments is the hardest problem to solve for" is that it won't be in the first big round of automation which is what we're now slowly starting to see happening, thus investing in those areas is premature. Kinda like investing in "palm-top" smartphones before the internet had sufficient penetration. You should invest in that area after this initial automation of digital/intellectual workers to achieve the highest financial return. Programmers, Lawyers and Pharmaceutical researchers will be replaced long before self driving is solved.

I also disagree that there is a large barrier to entry to a strong AI. There is a large initial investment to it, but after the initial investment has been done in terms of R&D, algorithms needed and hardware configuration it works on it's trivial to build. Look at current Transformer model and how newcomers quickly are able to make State of the art (SOTA) products like Stable Diffusion. This showcases that the AI makers won't be the winners here, they are like the enablers. It's not like the steam engine builders were the big winners from the industrial revolution, it was the steam engine users that generated the most value, I expect the same to happen with AI because the barriers to entry are indeed, not that high.

You make a great point towards existing businesses having "sticky" practices with margins priced in which is ripe for disruption. But in that case the businesses best to invest into don't exist yet as they will be startups, which wasn't the question at hand, the question was which companies should you invest in now.

Due to my assumptions listed above I think the worst financial mistake to make is to invest in companies that are actually building the AI systems as they are investing R&D into something that once completed has extremely low barrier to entry and it would render their own core business obsolete. Which is why I think it's unwise to invest in something like Alphabet.

I also think it's counter-productive to invest into companies that has a too long-term vision and won't benefit from the short term automation of intellectual and digital workers like Tesla. They invest in what is probably the 2nd or 3rd wave of automation after intellectual workers are already gone; Navigational and physical manipulation. I would hold off on investing in Tesla and use your capital to benefit from current capabilities which are large transformer model AI that can disrupt intellectual workers. The return horizon on self-driving cars and robot workers is just too long to be worth the investment in 2022.

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Talkat t1_itskboa wrote

Thank you for your response.

I particularly agree with your point that once we hit an AI milestone it is easy for others.

Do you think it will be easy for a large amount of AI companies or will it be limited to a handful? Like can a startup come in and be a year behind an industry leader or is it reserved to ~10 AI leaders?

100÷ agree the best return will be startups. Perhaps it will be those who can utilize AI to replace traditionally labor heavy industries.

In that circumstance, do AI startups (eventually) compete with each other and drive the price down?

I also agree with the premise that you don't want to invest in companies with a long term vision(or more importantly, launch date). However I think our estimated date for self driving is very different. I think there is a small chance Tesla will get self driving in 2 years, and a very good chance of 3-4 and certainly by 5.

So on the assumption that the barriers to entry are low to advanced AI, then the real winners may be those you can buy assets that produce a physical product (which will always be limited unlike AI) which they can then automate and lower the operating cost. I'm thinking primarily physical assets in this example.

For digital assets then it is almost a certainty that a startup is a far more effective manner to compete.

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Talkat t1_itpas62 wrote

BTW I would happily take a 10 year counter investment with you.

I go long Tesla and short your position of incumbents.

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