How Consensus & Concentration are Creating the Kernel for Another Crisis
“Disturbing research warns AI may be the ‘Great Filter’ that wipes out human civilization” -The Independent[i]
“…artificial general intelligence or AGI is AI’s ‘big brass ring’ and will become a trillion-dollar industry by the 2030s…it will also do good in the world.” -Business Insider[ii]
“What is certain is that creating [artificial general intelligence] AGI is the explicit aim of the leading AI companies, and they are moving towards it far more swiftly than anyone expected. … A three-letter acronym doesn’t capture the enormity of what AGI would represent, so I will refer to it as what is: God-like AI. God-like AI could be a force beyond our control or understanding, and one that could usher in the obsolescence or destruction of the human race.” -Financial Times[iii]
There appears to be some dissonance among experts about Artificial Intelligence’s impact on the world. The suggested outcomes range from mass extinction to a multi-trillion-dollar productivity miracle. The apostles of AI are a bit like the folks at Baskin Robbins. Offering 1,400 flavors of ice cream, there is something for everyone.
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Tech Company Multiples: Do Bloated Revenue Multiples Make Blue-Chips Risky?
Surveying the tech investment landscape reveals a very different story. There seems to be far less diffusion among investors regarding which firms will benefit the most from AI. History suggests this ends badly.
We ask that you spare us the platitudes about how software companies are entitled to exorbitant business valuations due to high growth rates and business models that benefit from enormous intangible assets and can generate perpetually high rates of return. We have already seen similar businesses with equally novel products or services that sported once high multiples dashed on the rocks of reality. There’s every reason to expect the cycle to repeat. Here’s why:
This newsletter has made a habit of abstaining from humanity’s comical obsession with the fruitless desire to forecast the future. Longtime KCR readers will not be surprised that we remain forecast-free regarding AI.
What might surprise readers is that KCR will claim to be reasonably competent at tech investing.
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June 22, 2023 |
| Authors: Matthew Malgari, Nathan Przybylo, Dr. Sanjeev Bhojraj and John Durkin
June 22, 2023
Authors: Matthew Malgari, Nathan Przybylo, Dr. Sanjeev Bhojraj and John Durkin
