by Charles Miller

Not long ago I had dinner with a savvy investor friend who asked me "What's going to happen with AI?" My friend already knew that there exists a very important distinction between buyers and sellers of AI technology. Sellers, they prefer to be called "builders," are the companies involved in creating the software algorithms for developing and innovating AI. Buyers are the companies, such as your bank that has bought some AI software to improve or automate its online customer support. Buyers are not engaged in creating AI software but rather actually using it, so that technically means that you and I are buyers.

Since the ChatGPT was first made available to the internet-surfing public in late 2022, AI has been the hottest story in the news and that has spilled over to the financial markets. One financial pundit proclaimed: "Over the past three years, you could've thrown a dart at a board of Artificial Intelligence (AI) companies and made money."

There is no doubt there have been some winners in the stock markets when it comes to tech companies. Over the last decade, Meta (Facebook) stock is up some 744%, but rest assured that is not all from their "Meta AI" chatbot that debuted in September 2023. Likewise Google stock us up over 13,000%, but its Grock AI is but a small part if the company's overall financial picture.

A market study of AI conducted by MIT states that despite $30-40 billion in investment into AI, the result so far is that 95% of the organizations are getting zero return. The data would seem to indicate that just 5% of the companies are extracting most of the millions in value. Industry giants such as Google and Meta are likely to be the ones that survive if the AI bubble were to burst.

It is worth noting that some hardware manufacturing companies such as Nvidia and Intel are performing well. The demand for their advanced computer chips continues to increase.

An interesting statistic is that big winners in the AI software world looks to be not the companies creating AI but the ones finding real-world ways to use it. In that market sector Palantir Technologies Inc. really stands apart. It is a software company that builds systems to help businesses and governments analyze large complex data sets, and Palantir stock is up more than 2,300%!

You will not be able to test drive a Palantir AI chatbot, because there is none. But if you have interacted with an automated voice assistant when you called customer service, that could have been powered by Palantir, especially if the robotic voice actually provided you a worthwhile service. The company's software is also deployed in diverse areas including medical research, identifying financial fraud, analyzing intelligence for the military, analyzing racecar data, and by law enforcement; just to name a few.

None of what I have written here today should be taken as investment advice. So what does all of this mean to the internet-surfing and AI chatbot using person in San Miguel? Just understand that you and I are the beta testers (unpaid guinea pigs). We can have access to many different AI chatbots for free. But just as unwanted updates are gavaged into our Windows or Mac computers and Android or iOS smart phones; our place is to test the new AI products while the makers watch our reactions. So with that in mind, my suggestion is to have not just one but several "favorite" AI chatbots you use, and try to avoid getting emotionally attached to just one. It should go without saying that not all of the AI chatbot providers are going to be able to incur financial losses indefinitely, and one day when you try to access your favorite site you may see a message reading "Error 404 Site Not Found."

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Charles Miller is a freelance computer consultant with decades of IT experience and a Texan with a lifetime love for Mexico. The opinions expressed are his own. He may be contacted at 415-101-8528 or email FAQ8 (at) SMAguru.com.

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