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August
28
2023

The AI 'Investment' SCAM
Karl Denninger 

Anyone paying attention to NVDA?

Yes, they have nice chips. I have one of their graphics cards in my desktop.  Nice board.  So was its predecessor, also theirs.

That's not the point.

The AI screamfest has been full-on now for a couple of years.  The rage over "large language models" (e.g. ChatGPT and similar) is in every column, every piece on CNBC and elsewhere.

The problem, as with all tech hype, isn't "does it work."

It is can you make money at it?

All this large language processing costs money.  Lots of money.  I don't care how fast or well it functions unless there's a market for it that pays at a rate above you have to spend to build it, train it, monitor it, administrate it and operate it -- including both the human and computer resources.

That's the problem and what's worse is that it is only good at certain things; the trivial task we all undertake every day, driving a car, it is utterly incapable of doing in a reasonably-competent manner at all no matter how much money is spent, and certainly not for as little as is spent on a human driver.

The spike upward when NVDA announced earnings was amusing.

So was the subsequent give-back of all of it, plus a huge dump in the other market indices.

Here it come folks.

Mr. Denninger, recent author of the book Leverage: How Cheap Money Will Destroy the World, is the former CEO of MCSNet, a regional Chicago area networking and Internet company that operated from 1987 to 1998. MCSNet was proud to offer several "firsts" in the Internet Service space, including integral customer-specified spam filtering for all customers and the first virtual web server available to the general public. Mr. Denninger's other accomplishments include the design and construction of regional and national IP-based networks and development of electronic conferencing software reaching back to the 1980s.

He has been a full-time trader since 1998, author of The Market Ticker, a daily market commentary, and operator of TickerForum, an online trading community, both since 2007.

Mr. Denninger received the 2008 Reed Irvine Accuracy In Media Award for Grassroots Journalism for his coverage of the 2008 market meltdown.

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