At the moment, the market is pricing in all the negative effects of AI and robotics and trying to cancel out the winners. The next conversation will be the losers.
- Nvidia is the most valuable company in the world
- Elon Musk said: “Robotic taxis make Tesla about a $5 trillion company…
- Microsoft is spending $80 billion on data centers this year only
- Robotics companies have turned into meme stocks
The multiples of all the tech stocks are high with the expectation that they will create amazing margins thanks to automation, AI and robotics. I totally agree but these margins have to come from somewhere and human labor is the obvious culprit.
Now Elon Musk says a lot of nonsense but he talked about 10 billion humanoid robots by 2040, which is more than the entire population of the planet. Jensen Huang also talked this week about how we are approaching the 'ChatGPT' era for robots, which I think is certain as generational AI allows them to see and interact with the world like never before.
The knee jerk reaction is the old business revolution around luddites and people finding different jobs. Maybe they will but even a short period of +8% unemployment in the US would be very disruptive and I expect a lot higher than that.
“I'm not afraid of that at all,” Sam Altman said of job losses. “Of course, I think that's good. I think that's the way forward, and we'll get new and better jobs.”
OK, Sam, what are the possible jobs?
To put Musk's market cap idea into perspective, the total market cap of the S&P 500 is currently $52 trillion. To get half of that, the profits would have to come from somewhere – other companies or people's pocketbooks. If people don't have jobs, where is that money coming from?
Now I don't have the answers to these questions — although I do have some ideas — what worries me is that hardly anyone is even talking about this with any rationality or honesty.
