Comment by blippage

Finance professor Aswath Damodaran, and others, have made many useful insights as to how AI as an investment is likely to pay out.

One technique is, instead of trying to pick individual winners, look at the total addressable market. Then compare the market size with the capital being pumped in. If you look on this basis, Aswath concluded that collectively AI investment is likely to provide unsatisfactory returns.

Here's a recent headline: "Nvidia’s Jensen Huang thinks $1 trillion won’t be enough to meet AI demand—and he’s paying engineers in AI tokens worth half their salary to prove it"

There are two parts to this. 1. A staggering $1t is expected to be invested in AI. Someone worked out that this was more than the entire capital expenditure for companies like Apple. We're talking about its entire existence here. IOW, $1t is a lot of dough. A LOT.

Secondly, this whole notion that AI is such a sure thing that half the salary will be in tokens should ring alarm bells. '“I could totally imagine in the future every single engineer in our company will need an annual token budget,” he said. “They’re going to make a few 100,000 a year as their base pay. I’m going to give them probably half of that on top of it as tokens so that they could be amplified 10 times.”'

I recall from the dotcom fiasco that service companies like accountants and lawyers were providing services to the dotcom companies and being compensated in stock options rather than cold hard cash like you'd normally expect.

Very dangerous.

As another poster pointed out, this really boils down to FOMO by big tech. I'm expecting big trouble down the line. We await to see if I'm early or just plain wrong.