Talk is cheap. Spending billions of dollars is anything but.

Everyone’s talking about AI these days. It can be difficult to make sense of what’s real and what’s overhyped. And while there’s certainly a lot of hype around AI at the moment—it’s still quite likely that AI is currently underappreciated.

Why?

Because right now businesses are spending many billions of dollars on computing equipment that will massively increase the productivity of our workforce. 

What’s causing the world to suddenly start spending tens of billions of dollars on chips? Large Language Models (LLM) are a major driver for the current spend. If you haven’t used a large language model like ChatGPT, it’s understandable that you would be skeptical. But you really need to see it in action.

For an example of how this will change our work, look at this confusingly complicated question I asked. It comes back with a useful formula I can copy and paste into Excel.

Once you use these tools, it becomes clear that most software is underutilized. Who reads all the documentation for all the Excel functions? Do you have the time to take a course or watch a series of YouTube videos explaining how it works? You’re probably too busy. 

But you’re not too busy to ask your question and wait a minute for the answer. Going from hours to minutes to get something done is a massive productivity enhancement. It means getting more done, and, more importantly, it means trying things you wouldn’t have tried previously because you didn’t have the time. 

Wealth comes from labor and capital productivity. What happens to wealth when productivity increases? You don’t need ChatGPT to answer that one.

Best regards,

Evan McGoff

 

Disclosure: Dock Street Asset Management, Inc. and/or our clients may own Nvidia (NVDA). This article is not intended to be used as investment advice.