The way things are going, you won’t have a choice but to deal with AI at some point.
AI is simply Artificial Intelligence, which is different from useless intelligence which occupies most of the seats in Washington D.C. but I digress.
With Microsoft’s massive investment in ChatGPT seems to be another of these bell weather investment events. Events that the news media will cover ad nauseam. People will be talking about it inside the industry and outside. Bloggers and cloggers will throw their 5 cents in (Inflation you know) and everyone will have some sort of opinion on it.
So why shouldn’t I?
Let’s be very clear from the start, this is not a cryptocurrency BS story. Where people are betting and praying on hitting it big while doing nothing to earn what gains they may get.
Artificial Intelligence is the real deal. It is something that we all will be dealing with in some form or the other in the coming years. Does it frighten me? Taking over the thought process for anyone who has a computer probably should but I am not afraid. It is the natural (weird because this is totally unnatural) evolution of technology and you either embrace it or fall into some rabbit hole that you will only partially get out of.
While I am not afraid, I am concerned but my concern may not be an issue for years to come. In the present, AI is an interesting application that will at some point have huge ramifications in society. Will we better off or worse off? Who knows. Are we better off with the technology that has been developed over the last 20 years? You can make solid arguments both ways but the fact is, technological advances are coming and we just have to adjust to the environment they will create.
The biggest fear is that this new technology as it advances will eliminate more jobs than it will create and that may be true but how you deal with these advances is up to you. Complain and wish for the olden days and fall in that previously mentioned rabbit hole or think positive and learn how you can profit from this next generation.
I am living proof of technology replacing what I was trained to do and what I was very good at. A little historical background for a moment.
I started on the trading floor the day the greatest President we have ever had was shot outside a hotel in Washington DC. An ominous event to say the least but here I was, a kid from Long Island with a degree in Forestry working in one of the most exciting places on Earth. The language was unlike anything I had ever heard. The action was non stop and the stress seemed overwhelming. Yet, everyone I met on the trading floor in those early years, were hardworking, driven by the desire to succeed and do the best they could for their customers every single day. The trust that these brokers had in each other, even though they were all competitors, was incredible. “My word is my bond” was the code by which everyone lived. As I learned more about the auction process and the skills that were required to succeed I realized that I needed to take advantage of the things I was very good at and make sure I worked harder on the things that I wasn’t.
Interpersonal skills were paramount and I realized over time that I had something very few brokers had or were allowed to have, gut instincts. While I was terrible at math (Public school math ugh) I was very good at reading people and understanding their role in a particular execution. I was extremely fortunate to have clients that basically trusted me from the beginning to the end of an order and did not nit pick any part of my execution. Most brokers on the trading floor always answered to two or three different people on every order and that hindered the abilities they may have had. It is like playing poker. You have to read the table as well as read the cards and luckily, I was very good at both.
The reason I bring all of this up is because as the NYSE moved a more electronic marketplace, the need for instincts was put behind the need for speed. Brokers were competing for order flow with electronic trading companies that could execute orders in milliseconds at 1/10 of the cost of a real live broker and in a world were costs were more important than the quality of the work, I was a short timer. Costs were easily definable, yet a broker that saved a client several thousand dollars by using his instincts was not. End of an era.
It was not AI that changed the equity markets, it was the cost advantages of using a computer generated algorithm that doesn’t try to mimic a humans qualities but does something close to an average price over a period of time. The idea is similar though.
AI right now will be trying to mimic what a human can do because all AI can do right now is use the data that is fed to it and adjust as new data comes along. It theoretically learns as each data set is added and while these new data sets will increase the permutations, AI will develop into thinking more like human as time goes on.
I suppose it is something to fear at some point in the future but for now, it is about making things easier and quicker for humans to do work. That may eliminate jobs and throw industries into turmoil but like every new technology, new jobs are created.
Universities are dealing with students using the available AI tools to do some of their work. It has to be frustrating for teachers and for administrators but the reality is, maybe the stuff that is assigned is just plain useless and student’s time prior to AI has been wasted doing these useless projects. Maybe more time could be given to actually preparing students for what actually happens in the real world instead of having some Psych major spend six hours writing some jumble nonsense about Proust or Nietzsche. Maybe it’s time for higher education to rethink it all.
With Microsoft taking a much larger stake in ChatGPT they are signalling that they won’t be sitting on the empire they created. Microsoft is a money machine. I hate them and I hate the products that they have. I keep getting charged for Office 365 from two different source and I don’t even use it. Their Windows operating system is dumb. Outlook is terrible and who programmed BING? It is a terrible product and should have been scrapped when AOL scrapped it’s search engine (oh wait, those chuckleheads still exist). My point is simple. Microsoft still has an incredible reach across many different platforms but they know that one of the most potentially profitable pieces sucks and with a powerful new addition to that piece, they can recoup the 10 billion they invested. Or can they?
I am a Google fan, have been since the very beginning. Call me ill informed, call me naïve, I do not care. Google provides a best in class experience every time you use any of their products. They want to go into AI, I am all for it. It started out rough. So what. GMail had problems at the onset. Now look. I do believe that Google will eventually win this race but it is going to cost them billions and they will have pie on their face many times. So will Microsoft.
It’s Monday though and what does all of this mean for stocks right now? Nothing. Microsoft will work and build and buy and continue to be that monster I love to hate. Google will do the same because both companies know the future is not in Bitcoin or some driverless car crap, it is in AI.
Excellent explanation of the future.....Love the new term, UI.