AI Hype is Just a Fad

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In past years we’ve had dot com companies, mortgage-backed securities, electric vehicles, and SPAC startups, just to name a few. At this early stage, Artificial Intelligence is only adding financial gains to a few companies. Mainly, the companies like NVDA and SMCI who provide the technology to make it all work. Microsoft and Apple recently announced products with built-in AI functionality. It remains to be seen if this new functionality will become a “must have” feature for the average user. I agree that there is the potential for AI to improve our lives, but from an investment standpoint, I’ve seen things like this come on like a storm, and then investors realize it will take years for the technology to show a return on investment. In the meantime, many companies stock ends up getting crushed when the hype fades and investors realize it was just the latest Wall Street fad.

Developers are thinking about the possible helpful applications of AI. At the same time bad actors are thinking about how they can use AI to commit crimes. The ability to duplicate the sound of any human voice and make them say anything they want, put real people in videos, or generate fake images of them, are just some of the scary things that AI can do. As AI becomes more advanced, the potential for it to become disruptive in a negative way increases. Security firms are having a hard time preventing ransom attacks and data breaches. It will get even harder when criminals have access to tools that are powered by AI. I don’t think AI is going to replace the Internet search engine. At least not in the near future. When you do a web search, you always have to sort through the results to find the information you are looking for. You (human) are filtering the search results to find the right answer. If AI is using the Internet as its source, how can we rely on it to give us an answer that is correct and true. It’s going to take some time and work to make AI safe and incorruptible.

It is possible to make money investing in hype, but you have to be early and ready to get out before everyone else! It is most often wise to limit your investment in such things.

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