Byron Wein, AI, Quick Bites

Byron Wien History
Legendary investment writer Byron Wien passed away this week. John Osbon worked with Byron at Morgan Stanley back in the day. In fact, John credits Byron directly for inspiring the discipline of regularly publishing investment insights to communicate, clarify thoughts, keep records of successes and mistakes and promote continuous learning.

Byron was most famous for his annual 10 economic surprises list. Byron was also known for his optimism, another critically important habit to keep strong. You can read his 2023 Ten Surprises List here. 

AI – Executive Order

Biden recently signed an executive order to regulate the specifics of AI model training, citing the many threats and dangers that AI poses to society. Amazon, Google and Microsoft are each trillion-dollar market cap companies and own the majority of the cloud computing market. They benefit tremendously from the growth in AI as they provide the global computer that powers the global economy.

I am in the camp that we should not be aggressively regulating AI and that the AI fear campaigns are meant to benefit big tech companies at the expense of new innovative entrants. Remember that OpenAI created and released ChatGPT in 2022, even though Google published the foundational transformer model research paper in 2017. We need a constant stream of new innovative companies to keep the innovation cycle alive. The term for this phenomenon is regulatory capture. In other words, big companies buy regulations to capture their markets.

Many knowledgeable authorities agree with this take, here and here, for example. It would not be wise to cut off competitive AI forces just as the innovation cycle is getting started.

OpenAI Chips, Semiconductor Review

OpenAI is exploring designing its own AI chips. This is interesting because NVidia is known for making the best of the best in AI chips, but they are in short supply and are extremely expensive. As a quick review for readers, the semiconductor industry operates in specializations. Intel designs and produces its chips, but most companies focus on creating designs and then sending them to foundries to be manufactured. TSMC in Taiwan makes nearly all of the world’s premium chips, including for NVidia, Google and Apple. This is why Taiwan is an intensely sensitive political issue. There is no current second option for producing high-end chips outside of Taiwan, although many are slowly working towards alternatives in Arizona and Ohio. NVidia’s high margins on their top AI chips seem ripe for disruptive forces, whether by OpenAI or another new AI team.

Quick Bites:

• LLM demonstration on Boston Dynamics Dog. Boston Dynamics created an incredibly sophisticated interactive robot using off-the-shelf ChatGPT APIs. It’s an early look at how robots will find their voice.
• I came across this map of light pollution for people who want to camp to see the stars. While it’s certainly useful for that purpose, it’s also interesting to use it as a map of population densities. That led me to this map of land values in the US. Light pollution appears to be a decent proxy for land valuation.
• This week was Bitcoin’s 15th birthday. The Lindy effect says that the longer an idea has lasted, the longer it will last. Here’s a link to the Bitcoin whitepaper for those who have never read it.
• Our friends and partners at Groma were featured in the Castle Island Ventures podcast this week to discuss blockchains and the potential for real estate backed digital currencies.