Ai in the AI World you've got Now Google announcing the release of the chat GPT competitor named Bard that'll apparently be ready in coming weeks. Keep in mind, Google has been working on language learning for a substantial amount of time and one of the easiest ways you could see that is if you ever use Gmail and you're typing in Gmail you can actually see the AI try to pre-fill in your email for you. in terms of hey, just press Tab and it'll pre-fill what we think you're going to say. Next, there were reports that this Google email generator could basically write the whole email for you, but they were worried that if they showed how powerful the Google AI chat was, that people would get freaked out.

This also comes after an individual developer who worked on Uh Lambda which is the internal Uh project name for Google's artificial intelligence Lambda standing for language model Google developed. Uh yeah. AI basically Lambda Anyway, this, uh, there was a particular developer who was working on the project who leaked that he worried the AI was so powerful that it had actually become sentient. Now that is kind of like your worst case scenario if you've ever watched the movie iRobot or if you've got any kind of fears about robots taking over the world, you don't want to hear that robots or any kind of artificial intelligence is becoming sentient because it sends the signal that they can think on their own is what sentin means.

So that's that's it's uh, that'll be quite interesting to see how Chachi PT compares to Google's Bard I did think the name Bard was kind of lame. They could have come up with something a lot cooler. I Kind of think of a Bard as like going back into like Oblivion Elder Scroll or something like really like I Don't know, maybe even like a uh oh gosh, what was. um, what's the game called ever EverQuest You know it'll run around as I I Don't know.

It just seems like an old school kind of name. so I'm not a big fan of Bard Uh, but it's probably still better than Baidu's announcement. their bot is called Ernie and their their stock was up like 13 on the idea that they're also coming out with some kind of AI chat bot. Baidu's the Chinese one of the largest internet companies in the world.

It's basically the Chinese search engine. It's kind of like think of it like Chinese Google. But anyway, so you've got Google coming out with a competitor named Bard. You've got Baidu coming out with Ernie and you still got chat GPT which is very annoying to pronounce and I always want to call it chat Gbd.

but but anyway, I don't know. It all seems crazy. Uh, the good news is the beneficiary out of all of this is the consumer because it should make search a whole lot more functional. especially if we can incorporate like Microsoft is trying to do chat GPT into Bing.

Now that would be pretty neat. Now if you can incorporate chat GPT into Bing Oh boy, you can actually make Bing a functional search engine because right now it just doesn't seem that great at all. Just my take I mean maybe I'm being a little aggressive here, but just my take. Now a lot of folks are are uh, you know, rightfully so wondering hey, you know what's a way to get exposure to uh companies? uh, that invest in this sort of AI technology? How can I get myself some some stock in this AI uh and I frequently looked at Microsoft as a potential opportunity for that.

but one of the concerns that I have is you have a relatively small exposure uh to chat GPT and Microsoft mostly because of the size of Microsoft so it's really going to be dependent on what Microsoft can do with this. Think about it, a 10 billion dollar investment into chat GPT by Microsoft really represents uh, somewhere around. Let's see, it's a 1.9 billion dollar company. You're talking about less than half of of one percent basically going into uh, this, uh, this, this particular company and it's it's about one half of one percent.

So for example, every 100 you put into Microsoft stock, about 50 cents would go into chat GPT And this has really led me to the idea that I probably don't want to be the person who's investing directly into Google for the sake of getting exposure to their AI or Baidu for the sake of getting exposure to their AI or Microsoft for the sake of getting exposure to chat GPT I'd almost rather invest in sort of the backbone architecture I've talked about this before, so I don't want to seem redundant, but I'm a big fan of investing in Champs and I Really believe? Like the Wall Street Journal says that chips are probably the next gold now and that over the next decade we'll see chips essentially be uh, sort of like the next gold rush in America and in countries throughout the world. Whether it's Europe fighting for more chip manufacturing which new factories are being built in Europe, you've got like an example. For example, the Taiwan Semiconductors is building a factory I Believe it's in Germany it's somewhere in Europe I Believe it's in Germany To manufacture Automotive chips like 20 to 28 nanometer chips, you've got uh, multiple plants being built in Arizona and massive expansions coming to Taiwan Semiconductors plants in Arizona. You've got Intel potentially spending up to 100 billion dollars investing in chips just in the Ohio region and and various areas throughout.

America I mean you've got the amount of money that you have flowing into. This is absolutely insane. This is a piece by The Wall Street Journal and uh, this is their current estimate I Mean there could be more announcements all already. but just based on projects announced, the Wall Street Journal sees U.S semiconductor investments in the next 10 years sitting at 186 billion dollars? That's just the United States that's not even Global that represents about the cost of around 29 billion dollar gigafactories from Tesla.

So putting that uh, that sort of into perspective, it's it's pretty massive And so that's where when I'm generally thinking about AI exposure stocks I Think to myself, boy, uh, you're the more powerful AI gets, the more powerful compute processes you're going to require and the companies that provide that are your sort of picks and shovel style companies which are all the way. At the beginning, you can think about glass manufacturers. Uh, you could think about uh, chip manufacturing equipment companies. So uh, for example, you could think of uh, uh, Carl Carl device for lenses.

These folks stick a lot a lot of money into glass and mirror production that goes into the actual chip equipment manufacturing with companies like Asml which has over a 90 market share for advanced chip manufacturing. Then you look at companies like uh, Taiwan semiconductors that buys a ton of these chips Apple in their earnings call bragging about how happy they expect to be the major customer for Taiwan semiconductors in for their Arizona plant. This is Apple bragging about Taiwan semiconductors in their earnings call. That's actually pretty impressive.

Usually, you don't actually see that. Take a look at this right here at the bottom of the earnings call. What do you have? Uh, here it is. Uh I.

We don't know exactly at this point what that'll be. this happens to be a production and chips Act and the impact of that. But we're all in in terms of being the largest customer for Taiwan semiconductors in Arizona and very, very proud to take part in that. And Apple's bragging about Taiwan semiconductors, right? So and then, of course, after you look at chip manufacturers or chip manufacturing equipment, you want to look at chip designers who are your big chip designers.

Well, obviously. uh, Nvidia AMD Massive Chip designers. Qualcomm's got a little bit more exposure to sort of 5G and mobile as opposed to maybe server and data center like you might see at AMD or Nvidia. Then you could look at a company uh, like, like Intel who's gotten completely rid of their memory Division and they're essentially trying to deprecate their PC Division and get into really uh, Enterprise and and servers uh, and and Intel potentially looking at, uh, looking like a company that's just, uh, potentially as, uh, as inexpensive as AMD, both of those selling for a relatively low valuation whereas Taiwan semiconductors in Nvidia selling a little bit more expensively.

But the amount of money that Intel expects to invest in in Ohio is is insane. And they're either going to spend that money and they're going to win, or they'll go bankrupt because they're a company that has failed to adapt a lot of people get frustrated when I mention AMD because or when I mentioned Intel because they think of Intel as sort of this Legacy company that won't be able to adapt yet. What I think is so smart about what Intel is doing is they're actually building their manufacturing Fabs uh fabrication plants to be agnostic of what kind of chip architecture you're using. Now if you're unfamiliar with that, there are basically Three core chip architectures.

uh, they're uh, and one is sort of Under the Umbrella of the other. but for the sake of argument, we'll just separate it out here. So you have X86, which is really the Intel based chip architecture, Then you have Arm, which is a a risk machine. that's actually what the RM stands for and risk is a type of Chip architecture.

And then there's Risk Five, which is more of your open source version of risk which these are very similar to each other. Arm is deemed to be very good from mobile, this deemed to be better for Enterprise maybe and and a PC at the moment. but then again, you've got each side trying to interview to be the best chip architecture. But what Intel is saying is look, we don't care what architecture you use, we just want you to hire us to make your chips.

And this is why they're getting contracts with the Department of Defense This is why they're investing 100 billion dollars into new Fabs in America Because they don't care if you want X86 chips, risk, five chips or arm chips. They don't care what kind of architecture you want, they just want to make your chips. And so I I see Intel as potentially a decent play over the next decade as long as they can actually Garner Uh, that? uh, that that manufacturing prowess now. Interestingly, Intel right now manufacture some of their trips with Taiwan semiconductors.

And so they are really calling up Asml to trying to get to try to get as many of the new ultraviolet uh machines that they can get. uh, their lithography machines. So they too can manufacture Advanced chips three nanometers, four nanometers. You know, by the end of the decade, we'll probably be down to one or two nanometers by the middle of the next decade we may be at half a nanometer, and at some point it's just going to come down to uh, not this transistor size which is what nanometer measures uh, nanometers measure, but rather, uh, just who makes the most efficient chip.

And that's where to Me Maybe Rather than investing in solely the designers, you also invest in the factories. So again, that's where I think Intel Tsmc. But then I also think Nvidia Apple Uh, and AMD is your designers. So so that's sort of my take I'd rather be investing in that segment than solely be dumping my money into Microsoft and Google who are substantially more exposed to the ad business.

So those are some of my thoughts. Although you're seeing substantial Investments go into machine learning and and potential uh, future uses uh at Facebook as well. Uh, obviously at divisions within Apple as well. So a lot of great opportunities to invest in artificial intelligence.

but I'm afraid to just run into certain companies solely because they say, oh, hey, we we have Ai, we don't want to stay away from that. So uh, that's uh yeah, Asml? Absolutely. I See you in the comments here. Yeah, we've been talking about Asml.

Asml has a an over 90 market share of the advanced lithography uh device for manufacturing these. Uh, now they are actually banned from selling their newest model of advanced chip making equipment to China China is obviously very pissed about this. Asml is able to sell their older generation lithography devices to China which which they do, and they sell a lot of them to China. But China's like, well, we want the new stuff too.

And now part of this is obviously because uh, China and the United States have a lot of geopolitical tensions. Not only do they have those tensions now, but they've had those tensions in the past before. China for example, stole the plans for our F-35 fighter jet and then a few years later, ended up announcing and releasing a jet that was pretty damn similar to our F-35 which is really frustrating and annoying because it's like hey, you really are hacking our stuff They've hacked into travel logs at Marriott they've hacked into our Health Care Systems China's really good at basically trying to steal our stuff now In Fairness to try to catch up and some might make the economic argument that hey, you know what? maybe uh, maybe that's a good thing because it forces both sides to innovate more. but I I I Don't think anyone getting hacked by China is necessarily something that we want to even remotely suggest is a good thing.

but these are definitely some of the plays that I'm curious about now. I'm less curious about companies like uh, like for example, Pinterest Pinterest was absolutely like I look Pinterest is a style of search engine so some people say hey, what about Pinterest for AI right? Could Could there potentially be an opportunity in in Search within Pinterest to basically lead people to spend money and I hate to say it but Pinterest scares me. Uh, the reason Pinterest scares me is I Took a very brief look at their earnings presentation and look at this. They grew Revenue by about 3.6 year over year, but they grew sales and marketing by 66.

In my opinion, this is a way that you're basically showing that the company has no way of any kind of operating leverage. They have no operated leverage operating. Leverage is where your Opex can stay stable, but you can actually grow your Revenue That's what operating Leverage is. Well, this company has the opposite of operating leverage.

Basically, to maintain their revenue at near flat, they had to increase their sales and marketing 66. That's scary that doesn't send a good signal to me now. The company initially dropped pretty decently after earnings, but it's since recovered. Uh, it's actually almost completely recovered to about flattened the pre-market maybe down as much as one percent.

but that's not a big deal. It initially fell over 2 ten percent and I think what's happening in the market is you're getting a lot of earnings that are happening and then the earnings come out and companies or investors rather institutions, whatever. like oh, that's not as bad as we thought it was, but it's still bad when you actually look at the numbers relative to other companies. So I don't know for me I stay away from things like Pinterest I want chips? That's what I want.

That's where I think the big peepee is in chips and Chip manufacturing. And the beauty is we're actually going through sort of this chip trough right now where everybody's ranting about how uh, chips are an oversupply and PC uh, sales year over year down 32 percent and everyone's missing. This is true: Revenue has been missing Taiwan semiconductors Samsung uh AMD The numbers have been coming down, the stocks have actually been going up though because the numbers aren't that bad and these are amazing companies for the next decade. We just sort of have to get through that sort of covid uh trough if you will.

the postcova trough. Uh, and and for me, I I Can't see pricing power anywhere else like I Don't care what software company you are, you need chips, You need compute power and that compute power is going to get more and more powerful over time. Not only is that compute power going to get more and more powerful over time, but the demand for that computing power is going to get more and more powerful. Uh, you know.

I I Always run into this idea and this challenge that at some point things will just be good enough. Uh, and maybe we don't need a new iPhone every single year, right? Which we could make that argument. but boy oh boy, you look back a few Generations you look, you go back maybe three years on Apple laptops or even computer regular PCS or iPhones you're like it just can't run the stuff as well as it used to. or at least this what it feels like.

and often this is because we're getting more and more intensive uh uh, applications that demand more and more compute power. In terms of what we're able to do, the way we're able to collaborate with other individuals, it's phenomenal. There's so much potential and so so excited about what's to come. especially I Mean, think about the transition, even to augmented reality.

Now a lot of people are like Gavin Augmented reality is BS Virtual reality is like what you the headset you buy for Christmas and you use it. You know one or two days in a row and then you never use it again. Yes, fact true. But eventually augmented reality and virtual reality actually won't give you a headache and it actually won't suck.

And boy, I can't even imagine the kind of compute power that we'll need for 360. Degree Uh, Actually, quality? uh, virtual reality relative to what what we deal with today? Uh, it's uh, it's going to be pretty dang impressive. and it's going to require a lot of compute power. And of course, that's where you could also invest in batteries because batteries will become even more important as well.

So uh, and that's that's exactly why you know. Almost as if On Cue you have uh Mr Steve over here suggesting Lithium explorers have been running like crazy. 50 moves in one day and shouts out multiple different nickel plays here like SPC Fni and ICU and copper plays like F D T and ATX. You know the interesting thing about the Explorers is you're kind it.

To me, it's almost like you're you're betting on gold explorers like oh I I hope the person I bet on finds gold and then when they don't they go bankrupt. You know it's like oh dear uh okay, is there is there a particular pickaxe for Lithium? Uh, that's that's whom I want to invest in? Or just invest in the battery. uh, assemblers. whether that's Panasonic or even battery storage companies like Tesla and Phase Generac Solar Edge Uh, you know that that might be a way to uh invest uh in that, but then again, you know, look even uh, even Energizer I Don't think anybody's ever considered looking at the Energizer earnings report, but I did.

uh, and uh, even energizers complaining about higher costs for nickel and Lithium and how it's impacting their margins. So you know all these battery manufacturers, even though they can put batteries together, it doesn't necessarily mean uh, they're going to be profitable putting their batteries together. So uh, you know something to keep in mind? All right.