No conversation, especially in finance circles, is complete these days without the mention of artificial intelligence (AI). It is either about how AI is the only thing driving the economy and markets in the US—and by extension all the ‘AI plays’ around the world—or everyone is busy asking each other how they use AI in their daily workflows, searching for that elusive silver bullet of technology-aided productivity.
From his experience with past technology cycles, Bertie has calibrated himself as a 76 percentile adopter, which is to say that 24 out of 100 people are likely to adopt a new technology faster or better than Bertie.
Which is why Bertie is always on the lookout for these twenty-four to learn from them and improve his rank. Once you have appeared for a few competitive exams in India, some habits die hard.
The elusive promise of AI
The reality is that the early and/or prolific adopters haven’t been able to teach Bertie anything meaningful of late. After the initial burst of excitement about the World Wide Web becoming searchable—with search results delivered to you in a format of your choosing—Bertie’s workflow hasn’t improved much. Yes, he has ‘Ghibli-ed’ a few of his pictures and changed the background of a cousin’s photo from a Ganpati pandal to a nightclub in order to enjoy the ensuing uproar in the family WhatsApp group, but a big productivity breakthrough has been elusive. A year ago, Bertie thought that AI would fulfil the Keynesian promise of a 15-hour work week by 2030, but the dream of lounging in a hammock while AI rakes in the cash for him still seems distant.
This realisation brought Bertie back to the other hot topic of all AI discussions—of how it is powering the US economy and markets. The story there is that the hyper-scalers—which is tech-speak for big spenders on AI infrastructure, primarily data centres—are shelling out unprecedented amounts of money in what feels like an arms race. The prime beneficiary of this trend is, of course, the AI chip maker Nvidia, along with every company downstream that supplies the components and equipment needed to fuel the growth of these data centres. The world hangs on to every word of Nvidia’s talismanic CEO Jensen Huang, and like a line of chicks following the mother hen, the stock prices of all the downstream beneficiaries from hardware makers to electricity grid suppliers follow Nvidia’s lead.
Now Bertie isn’t a technology clairvoyant but is smart enough to recognise the inherent inconsistency between these two realities. On one hand, the marginal utility of AI seems to have gone down, but on the other, the amount of money being spent on its advancement has reached new heights. Something, Bertie’s intuition tells him, has to give—either a mother of all breakthroughs that takes us closer to the 15-hour work week utopia is around the corner, or we are living through history’s largest wasteful capital spending binge. And knowingly or not, willingly or otherwise, if you are an investor, you are making a bet on the outcome.
Bertie is a Mumbai-based fund manager whose compliance department wishes him to cough twice before speaking and then decide not to say it after all.
