Comment by kpil
9 days ago
"... HBR found that companies are cutting [jobs] based on AI's potential, not its performance.
I don't know who needs to hear this - a lot apparently - but the following three statements are not possible to validate but have unreasonably different effects on the stock market.
* We're cutting because of expected low revenue. (Negative) * We're cutting to strengthen our strategic focus and control our operational costs.(Positive) * We're cutting because of AI. (Double-plus positive)
The hype is real. Will we see drastically reduced operational costs the coming years or will it follow the same curve as we've seen in productivity since 1750?
> The hype is real. Will we see drastically reduced operational costs the coming years or will it follow the same curve as we've seen in productivity since 1750?
There's a third possibility: slop driven productivity declines as people realize they took a wrong turn.
Which makes me wonder: what is the best 'huge AI bust' trade?
I'm thinking that the slopocalypse is almost inevitable outside pure tech companies and can't be ruled out there either.
LLMs are a force multiplier. Clueless people will be able to produce tons of code that looks convincing but is totally misguided and misinformed. Exactly what large companies with complex in-house systems doesn't really need any more of.
> what is the best 'huge AI bust' trade?
There probably isn't one. Sure you can be bold and try to short something, but the market can be irrationel longer than you can stay solvent.
Also the big tech stocks are inflated. But they have been for years and unlike dotcom there is some tangible value behind them.
I think maybe the sane thing to do is reduce tech stocks exposure and go into index funds. But that's always the answer, so that's cheating :)
Sharpening your non-AI, boring (but real) skills, and stepping in to clean up the mess when the other shoe drops.
> what is the best 'huge AI bust' trade?
Things that will lose the most if we get Super AGI?