---Disclaimer: I am not a financial advisor. I don't have any "Certificates". This blog post is offered for entertainment purposes.---
Background on AI's foundational technology (numerical methods)
In numerical methods, "integral based algorithms" are forgiving and robust while "differential methods" are rife with instabilities. Rates of change (X,t) tend to multiply measurement error. Acceleration of rate of change (X,,t) is even filthier. "Jerk", the rate of change of acceleration (X,,,t) is even filthier than acceleration.
Also from numerical methods, interpolation (estimating values that are bounded by measured data) is pretty safe while extrapolation (estimating values that are outside the cloud of measured data i.e., future predictions) get squirrelly very quickly. The farther into the future the prediction, the squirrellier the number.
This is important for two reasons. My AI expert informs me that LLM are basically "Auto-complete on steroids". They are guessing what the next word will be. At some point that runs out of gas. The other way it comes into play is that the astronomical valuations and ability to pull financing is based on speculation about how AI will fundamentally transform the economy like petroleum, semiconductors and the internet did.
Can any of the proponents of AI offer a credible guess as to when the venture will be profitable, covering both the costs of the sunk investment and the variable cost of the energy to run them?
Frankly, I think they are barking up the wrong tree. The AI that will be profitable will be tiny chips embedded in drones (unmanned, aerial vehicles) and will parse out potential targets and communicate with other drones in its cloud. Survival on the battle field will involve keeping your IFF helmet fully charged and the antenna undamaged and transmitting.
"But you HAVE to be investing in AI because that is where the stock-prices are exploding!!!"
I sort of am. 30% of my retirement fund (calm your beating heart...it isn't that much money) is invested in various equity index funds. Since NVIDIA, Oracle, MS and Alphabet are a substantial slice of the S&P 500, I am invested in them.
I am fine missing out on "beating the market". The exquisite agony of being "left behind" combines the two major forces in the market. It combines both Fear and Greed all in one package. It is fog-of-war and blindness-from-testosterone combined into one package and is virtually guaranteed to result in risky bets.
Errors AI seems to be prone to
"Nothing is better than God.
Warm beer is better than nothing."
***apply transitive property***
"Warm beer is better than God." Words can have very different meanings depending on context. "You are a sight for sore eyes"
Oscar Wilde's original intention was "...a sight to cause sore eyes..."
"You look like the first breath of spring!"
The only survivable way to tell a woman that she looks like the end of a long, hard winter.
(From an AI generated Youtube video) "Alvin York charged the trench filled with 126 German soldiers armed only with his Springfield model 1903 and his 1911 Colt handgun"
While the "Standard" rifle for the U.S. Army was the Springfield model 1903, there were not enough in inventory to issue to the troops who were sent to Europe in 1917. Rather, they were issued the Enfield M-17 chambered in 30-06. In this case, "standard" and boots-on-ground reality were different.
Mountains of money are being sunk into "Data centers" and AI. I am humble enough to acknowledge that I may be very wrong. But I fear that the results will be more dystopian than empowering.