AI's Investment Implications


#1

An old colleague of mine is joining a self-driving car startup. I took the chance to ask him a bunch of questions in that space. Learned quite a bit from the conversation, but more importantly, I realized I wasn’t paying enough attention to this important new trend. A trend that’s already making new winners and losers in the market.

For example, I totally did not know DRAM can be hot property because of AI:

Sun Microsystems co-founder Bill Joy recently joined Water Street Capital and has pushed the secretive hedge fund firm to build a large stake in Micron Technology Inc., arguing the market for its main product is set for a sustained boom without the wild ups and crushing downs of the past.

The rise of cloud computing, artificial intelligence, and augmented and virtual reality applications on Apple Inc. iPhones and other high-end smartphones will spur stronger demand for DRAM chips, Joy wrote in a recent memo to Water Street founder Gilchrist Berg and other executives at the firm.

DRAM supply is likely to fall well short of this demand as it becomes increasingly difficult and expensive to churn out more capable chips, and a smaller number of manufacturers behave more rationally to maintain profit, Joy added.

My old friend told me the inference side of self driving is the interesting bit. They need new silicon and fast communication links to make sure the self driving module can respond in real time with ultra high regularity. I suspect that’s why Apple made the shift from making a whole car ala Tesla to focus on the on-car self-driving module. Apple has the world’s best silicon design team and one of the few players who know how to write OS and compilers.

Pay attention!


#2

Pumping AAPL and MU (just because I mention it?) now?
Did you ask him where is the money in self-driving cars?
What if Tesla spoils the market for everyone?


#3

Pumping? What’s in it for me? I am just trying to think things through.


#4

Did bill joy make any smart investment? He has been a VC for decades and what’s his achievement in investment arena?

Will China become a dram superpower and oversupply the market at all?


#5

Quantum memory

First on-chip nanoscale optical quantum memory developed :slight_smile:


#6

Bill Joy is a legend. I don’t know his investment record and frankly that’s beside the point. The key takeaway is his observation that there will be much higher demand for DRAM because of AI. I will research more if China can be a player in this market. But the 800 pound elephants are all Korean firms.


#7

Michael Jackson is also a legend. A legend on what?


#8

Guess you are not in tech?


#9

BSD and vi? Is that his legend?

What’s his investment legend and his tech legend? If I were the owner of a VC firm or hedge fund firm, not sure whether I would consider him as a new hire. Maybe can use his name to pump a few stocks :joy:

In 1999, Joy co-founded a venture capital firm, HighBAR Ventures, with two Sun colleagues, Andreas von Bechtolsheim and Roy Thiele-Sardiña. In January 2005 he was named a partner in venture capital firm Kleiner Perkins Caufield & Byers. There, Joy has made several investments in green energy industries, even though he does not have any credentials in the field.[5] He once said, “My method is to look at something that seems like a good idea and assume it’s true”.[6]


#10

You’re a Johnny come late to realize this. I thought the key takeaway is he thinks the market has underestimated the demand and prices would stay firm a lot longer than the usual boom and bust.


#11

Wow, that’s a pretty rigorous method.


#12

Sure I am late. That’s why I said I need to pay more attention to this field. If you find anything interesting share in this thread.


#13

I am also looking for in depth write up on self driving cars. A lay of the land type overview. If anyone finds anything hit me up.


#14

The only thing you have to worry about is self-driving cars impact to RE :smile: Now people will be sleeping as they commute from Stockton to Mountain View and thus impacting SV house prices.


#15

I like to buy a self driving car. How much will it cost?


#16

I totally missed the Nvidia boat. Looks like I missed the Micron boat too. That’s inexcusable!


#17

Pichai is intent on pressing Google’s advantage in AI — not just by integrating AI features into every product it makes, but by making products that are themselves inspired by AI, products that wouldn’t be conceivable without it.

As ambitious as Google is with its own hardware, it’s still a tiny drop in the bucket compared to the company’s online business. Pichai won’t say when we can expect to see hardware sales become a big, broken-out part of its financial calls, outside of saying it’ll definitely happen in the next five years.

Google is making its own hardware to capitalize on its lead in AI. Pichai is confident hardware will have meaningful revenue in 5 years’ time. Question is: will Apple become good at AI faster than Google becoming good at hardware? Its new Pixel phone has universally good reviews as far as I can tell. Some say its camera is better than iPhone 8.

I may need to revisit my bearish stand on Google. Its hardware push is no joke.


#18

Hardware is not about an assembly of high quality components or product design. Is also about marketing, supply chain management and user experience. I hate two huge companies so close to each other looking for the same kind of people, it drives up labor cost hence reduce profitability of both companies… so far, the pie appears to be big enough since both are making money, hand over fist. Can’t Google do something else? Apple didn’t go into ads and search seriously except to soothe some developers, forced to do a little. Facebook is at one time also thinking of making a smartphone, luckily it didn’t, otherwise, too many big boys in the same business… already many in China and elsewhere, no need so many in USA.

Btw, AI is going to be in everything… I don’t think anyone would have monopoly… is like software development, nobody dominates… AI is not a product… so everybody can be good at it. Apple is not focusing on AI per se, it wants to provide more and improved services… services that help people to be more creative and have fun… not fulfilling our insatiable needs.


#19

Thanks to @telemarker I am reading the back catalog of Aaron Tilley from Forbes. He writes on AI and chip industry, two hot trends today.

https://www.forbes.com/sites/aarontilley

There are 3 mega trends I want to monitor closely, and shift my stock portfolio towards: EV, AI and China. I still think Tesla is a bubble but the Chinese carmakers are also quite expensive. GM may be onto something with its Bolt but so far the market is not impressed. On AI I am building up a position on Micron. AI and big data in particular needs lots of RAM and storage, and there are only 3 RAM suppliers in the whole wide world. I wish I could buy Samsung but the Korean stock market looks quite closed to Americans. On China I have been shifting my portfolio’s weight towards Chinese companies since May this year. Now it’s over 36% of my holdings.

Interestingly, China seems to be a leader in AI, a merging of my two trends. So maybe I will buy into some Chinese AI companies.

https://www.forbes.com/sites/aarontilley/2017/07/31/china-ai-imagenet/#2c852806170a


#20

China is 15% of my portfolio.

EV is 10% of my portfolio.

AI is 0% of my portfolio… not impressed…