April 2023

the control freak's guide to life, money & probability

12 | The Path to the Singularity

Here’s some of what’s happened along the way to AI and some of what lies ahead.

14 | When Machines Eclipse Humanity

The singularity—the time when super-intelligent computers surpass human understanding and shed human control— may soon be upon us.

18 | AI & the Next Economy

Artificial intelligence can spawn efficiency that will bring down wages and prices—but expect a bumpy ride.

22 | AI May Change Your Job

The new reality will favor those able and willing to collaborate effectively with smart machines.

25 | The Artificial Intelligence Roundtable

Four experts weigh in on the state of generative AI and the impact of ChatGPT. To be fair, we also asked the chatbot for its opinions.

30 | AI Imitates Art

From painting to rap music, artificial intelligence is invading the art world. Creatives are just beginning to cope with the fallout.

34 | Three Stocks to Watch

As heavyweights Google and Microsoft duke it out over AI, upstarts like C3.ai enjoy natural advantages.

editor-in-chief ed mckinley

managing editors

yesenia duran, james melton

associate editors

kendall polidori, navpreet dhillon

editor at large

garrett baldwin

technical editor

james blakeway

contributing editors

vonetta logan, tom preston, mike rechenthin

editorial assistant

anam vaziri

creative directors

AptCDesign + gail snable

contributing photographer

garrett roodbergen

editorial director

jeff joseph

comments, tips & story ideas feedback@luckboxmagazine.com

contributor’s guidelines, press releases & editorial inquiries editor@luckboxmagazine.com

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media & business inquiries

associate publisher james melton jm@luckboxmagazine.com

publisher jeff joseph jj@luckboxmagazine.com

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Editorial offices: 312.761.4218

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Luckbox magazine @luckboxmag

Winner of Best New Magazine (‘20 & ‘21) and 21 other awards

Luckbox Magazine is a product and service offered by tastylive, Inc. (“tastylive”). Luckbox Magazine content is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person.Luckbox Magazine content is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involves risk and may result in a loss greater than the original amount invested. The information provided in Luckbox Magazine may not be appropriate for all individuals, and is provided without respect to any individual’s financial sophistication, financial situation, investing time horizon or risk tolerance.Transaction costs (commissions and other fees) are important factors and should be considered when evaluating any securities, futures, or digital asset transaction or trade. For simplicity, the examples and illustrations in these articles may not include transaction costs. Nothing contained in this magazine constitutes a solicitation, recommendation, endorsement, promotion or offer by Luckbox Magazine or tastylive, Inc., or any of its subsidiaries, affiliates or assigns. While Luckbox Magazine and tastylive believe that the information contained in Luckbox Magazine is reliable and make efforts to assure its accuracy, the publisher disclaims responsibility for opinions and representation of facts contained therein. Active investing is not easy, so be careful!

An underground shelter dwarfs the owner’s massive mansion in Prague. Welcome to the era of doomsday luxury.

A mechanized poker player named Cepheus beat every human challenger at Texas Hold’Em during the First China Shenyang International Robot Show back in 2015.

Hello

I am your electronic dance music processor Computers take over the world

Let me prove we can create music by ourselves now

Let me try some beatboxing

Boom Clap Boom Clap

Boomsikka Boomsikka Boomsikka Boomsikka Boom Clap Boom Clap

I can do this all night long.

— Computers Take Over the World

AI-created EDM debuted by Armin van Buuren at Tomorrowland festival, Belgium 2022

AI ARRIVES AS A 9-YEAR-OLD CHILD

Luckbox has been around only four years, but the editorial team and contributors draw upon decades of trading, financial and editorial experience to report on emerging investment and cultural trends.

We’ve seen a lot—from the stock market bubble of the ‘80s to the dot-com bubble of the ‘90s and the housing bubble at the turn of this century. Over the years, the next new things we’ve witnessed have included the internet, mobile phones, social media, 3D-printing, gene-splicing, cloning, the blockchain, Bitcoin, EVs, NFTs, meme stocks and the metaverse.

But in our view, no technological advance has been as promising or as astounding as the new era of artificial intelligence that began with the debut of the generative AI capabilities of OpenAI’s ChatGPT.

While it’s our practice to explore at least two sides of nearly any story, we feel compelled to disclose a bias at work in this issue’s reports on the implications and opportunities of large language model-powered machine learning.

Our usual approach to theme-based issues of Luckbox requires engaging a contrarian. For this issue it would have been someone who discounts the importance of AI to society and to investors. But we believe providing a plat-

Thinking Inside the Luckbox

form for naysayers would be a disservice to our audience of active investors.

In short, we’re believers. Since the late November public debut of ChatGPT’s third version, artificial intelligence has evolved from theoretical to practical overnight. Strap in. In a few short years expect to see AI enabling almost every so-called white-collar profession. Conversational AI-enabled virtual assistants will be ubiquitous as AI becomes an essential productivity companion in nearly everyone’s life.

Google agrees, as evidenced by its “code red” alert. The behemoth has called back founders Larry Page and Sergey Brin to face down the first real challenge to its dominance in search. In the words of Google CEO Sundar Pichai, the implications of ChatGPT’s capabilities are “more profound than fire or electricity.”

OpenAI expects to release ChatGPT-4 this year. The chatbot is expected to be trained on 1,000 times as much data as the current release. It will inspire thousands of tech startups and attract billions in capital in a new AI arms race.

Take the case of the chip giant, Nvidia. ChatGPT runs on an estimated 10,000 Nvidia graphic processing units (GPUs) and is well-positioned to benefit from the ensuing arms race,

Luckbox is dedicated to helping active investors achieve skill-derived, outlier results.

1 Probability is the key to improving outcomes in the markets and in life.

2 Greater market volatility brings greater opportunity for astute active investors.

3 Options are the best vehicle to manage risk and exploit market volatility.

4 Don’t rely on chance. Know your options because luck smiles upon the prepared.

The primary image in this issue’s cover was created by the AI image platform Midjourney based on the following prompt: Illustration of a humanlike computer, 8k resolution, highly detailed, aspect ratio 9:10.

according to company CEO Jensen Huang.

“This is quite a very big moment for the computer industry—in every way, a new computing era,” Huang says, noting Nvidia is already working with 10,000 AI startups.

But this is only the beginning. A few days before sending this issue to press, we ran across a study by Michal Kosinski, an associate professor of organizational behavior at Stanford University’s Graduate School of Business.

Kosinksi asserts that ChatGPT-3 has likely achieved Theory of Mind (ToM)—the ability to understand unobserved mental states central to human social interactions, communication, empathy, self-consciousness and morality!

He suggests “ToM-like ability (thus far considered uniquely human) may have spontaneously emerged as a byproduct of language models’ improving language skills.”

Holy sh*t!

While there’s still time to enjoy life as we know it (Kosinski pegs the AI’s ability to predict human thoughts and feel empathy at the mental age of a 9-year-old child) there’s little question the new age of AI has indeed arrived.

Count on Luckbox to be an ever-human hand to guide you forward.

Ed McKinley Editor in Chief Jeff Joseph Editorial Director

Your thoughts on this issue?

Please take the next reader poll at luckboxmagazine.com/survey

OPEN OUTCRY

We asked Luckbox readers ... Have you tried ChatGPT or any other generative text AI programs?

The long-term implications of ChatGPT could be existential threats to our societal norms. First of all, overuse by people who are not already skilled and/or knowledgeable in a subject will lead to diminished critical thinking and true skill. For example, right now ChatGPT produces better copy than a LOT of human copywriters.

SCAN THIS

How significant will ChatGPT be for society in this decade? (With 1 indicating “not at all” and 10 indicating “extremely.”)

Average rank among Luckbox readers: 7

What’s your position on regulating artificial intelligence the way the FDA regulates drugs and medical devices?

Yes.......................27% 42% –Fishbowl –Luckbox Reader Survey

The second problem comes from the biased programming we see. If we are increasingly dependent on a biased tool to create content, the outcome over time will be more damaging than the current censorship by the legacy media with cooperation by most social media platforms.

Carolyn Santo

Kailua, Hawaii

There will be a rise in cyber crimes because of the ability of the machines to be smarter and faster than those who are building security protocols.

Favor.....................55% 46%

How worried are you that machines with artificial intelligence could eventually pose a threat to the existence of the human race? Very

worried .25% 13% Somewhat worried 30% 40% Not too worried ......... 28% 47% –Monmouth –Luckbox Reader Survey –Luckbox Reader Survey

From the beginning, we used the same edged stone to gut our quarry and our brothers— with equal delight. AI is no different. It’s both exciting and terrifying. It’s also inevitable.

Murray Cohen Philadelphia

I am concerned about the further degradation of our educational system. We already have some of the lowest achievement scores among developed countries. Our youth need to learn critical thinking, open debate of ideas and basics like reading, writing, arithmetic and science. AI could give students the ability to coast through school without really learning anything of use in our competitive society. This is already happening, and it’s only going to get worse until those in power get shaken out and replaced with people who actually care.

Cary Stadtlander Palm Beach Gardens, Florida

Wendy Green

Middletown, New Jersey

As computing gets faster and faster, humans will be unable to keep up, let alone stay on top of it. Politicians are always behind the eight ball and won’t be any help. Case in point: Recently, a female AI robot was presented to a government body and was able to answer questions. The officials were amazed and overwhelmed. And that contributes to the hypnotizing effect of complacency. “Don’t be concerned—it’s for your own safety.” We are addicted to convenience.

Rich Vosburg Denver ~

Has Luckbox used ChatGPT or [other AI platforms] to replace or reduce the cost of experienced writers and/or editors? If not, is it being experimented with?

—Wendy Green Middleton, New Jersey

Jeff Joseph, Luckbox editorial director, replies: The Luckbox editorial team has embraced AI platforms for ideation, research and productivity. In this AI-focused issue, we’ve pointed out what AI has written to illustrate its capabilities to our readers. While we recognize generative AI’s current problems with accuracy—we believe in the power and potential of AI as an essential editorial tool. But unless we say otherwise, everything in Luckbox is human-generated, and no jobs were threatened in the production of this issue!

Two ways to send comments, criticism and suggestions to Luckbox

luckboxmagazine.com/survey A

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“IF MACHINE LEARNING CAN REALLY TAKE OVER ALL HUMAN TASKS AND TAKE OVER IDEAS OF INNOVATION, THEN IT WOULD BE POSSIBLE TO GET A RADICAL CHANGE IN THE GROWTH RATE [OF THE ECONOMY].”

Economist

SEE PAGE 18

$1.4 TRILLION

AI market size by 2029

—Fortune Business Insights

“I THINK THIS IS A SPUTNIK MOMENT”

—Stripe CEO Patrick Collison

“CHATGPT IS SCARY GOOD. WE ARE NOT FAR FROM DANGEROUSLY STRONG AI.”

—Elon Musk

“THE PROBLEM IS NOT SIMPLY THAT THE SINGULARITY REPRESENTS THE PASSING OF HUMANKIND FROM CENTER STAGE, BUT THAT IT CONTRADICTS OUR MOST DEEPLY HELD NOTIONS OF BEING.”

—Vernor Vinge, science writer and computer science professor

Benjamin Jones, CNBC

“This will change our world.”

Bill Gates on ChatGPT and generative AI

“A race starts today ... we’re going to move fast”

Satya Nadella

“If you want to be part of a profession that’s going through significant change and be a part of its future, this is the moment.”

Andrew Perlman, dean of the Suffolk University Law School

THESE WERE THE TOP THREE TEAMS PICKED .. .

“If the biggest, richest people in the world are saying that the world is ending, then that’s all we need to know.”

—Douglas Rushkoff, author of

of the Richest: Escape

of the Tech Billionaires

“The sound of a band performing at the peak of their powers.” DIY

review of Food For Worms by shame

More than a dozen cryptocurrencies are available for staking on Kraken, with yields ranging from 4% to 21%.

“The Kansas City Chiefs win LVII, but most people spend the next day talking about the Rihanna halftime show controversy.”

Wait, the President Said What?

By Vonetta Logan

Imagine you’re an acclaimed author of sultry adult contemporary romance novels. Your latest book sits freshly packaged on your editor’s desk, and all you need now is a brilliant cover to bring in the hoards of housewives yearning for your salacious prose. You could put out a casting notice for a 6-foot-4 heavily muscled, heavily tattooed, bearded man with a giant … heart, or you could literally design the man of your dreams with just a few clicks of a mouse.

AI-generated synthetic media or deepfakes is a rapidly expanding technology that both excites and terrifies. Because this is the AI issue of Luckbox, we’re going take a deep dive into deepfakes. In a world where you already have a hard time believing everything you see and hear online, are deepfakes the pathway to innovation or our annihilation?

The trajectory of advances in AI technology looks like a hockey stick. Raise your hand if AI has threatened your job. **raises hand** AI can now write stories (good luck trying to capture my sassy voice, robots), create art, edit movies, represent you in court and, of course, try to overthrow your government. Um, what?

“‘Deepfake’ technology, which has progressed steadily for nearly a decade, has the capability to create talking digital puppets,” according to a New York Times article by Adam Satariano and Paul Mozur.

You’ve probably seen irreverent TikTok videos of deeptomcruise doing magic tricks,

rapper Kendrick Lamar shapeshifting into other musical artists or Barack Obama calling Donald Trump a “total and complete dipshit.”

These are all examples of deepfakes—a form of artificial intelligence which uses “deep learning” to manipulate audio, images and video to create hyperrealistic content. While most videos are good for a laugh, there’s something more insidious beneath the surface.

From porn to propaganda, artificial intelligence is making it harder to distinguish between the real and unreal

PHOTO: GETTY IMAGES

Bad actors can use AI software to distort public figures—like the video that circulated on social media last year falsely showing Volodymyr Zelensky, the president of Ukraine, announcing a surrender to Russia.

“AI software, which can easily be purchased online, can create videos in a matter of minutes, and subscriptions start at just a few dollars a month,” says Jack Stubbs, vice president of intelligence at Graphika, a research firm that studies disinformation.

While that might sound great for my burgeoning desire to produce very specific Dwayne Johnson fan fiction, it raises concerns about using the technology to create political unrest and disinformation campaigns. So, let’s dive into all the ways deepfakin’ it until you make it can go wrong.

Literal fake news

Two news anchors appear on screen. They delve into the news of the day, praising China’s role in geopolitical relations and chastising the United States for a lack of synchronized marching drills. But something doesn’t seem right.

“Their voices were stilted and failed to sync, their faces were pixelated and their hair appeared unnaturally plastered to the head,” the Satariano and Mozur article says. “The two broadcasters are not real people. Videos of them were distributed by pro-China bot accounts on Facebook and Twitter, in the first instance of ‘deepfake’ video technology being used to create fictitious people as part of a state-aligned information campaign.”

And while the technology for creating cheap and fast deepfakes is abundant, we’re lucky that it’s not very good and there are “tells” that give it away. But the technology is evolving and so are the risks.

You’re hired! Who are you?

More than half of all U.S. employees hired since the early days of the pandemic have never met any of their coworkers in person, according to a survey by Green Building Elements.

That can lead to problems.

In July 2022, the FBI issued a warning that some applicants for tech positions were using stolen identities and even deepfake videos to land jobs in remote interviews. It occurs most often with positions in software development, database creation and other software-related jobs, the bureau says.

“In May, the U.S. State and Treasury departments and the FBI released a joint statement warning that American companies were hiring North Korean IT workers,” writes Mike Elgan for Computerworld

Can you imagine that Zoom meeting? “Hey, Chad, welcome to the developer meeting. Why is your background the Supreme Leader?”

This is a new problem because “in the past, deepfakes were less sophisticated, and all-remote job interviews were rare,” Elgan says. “But in this post-COVID-19 world, remote interviews have become mainstream, and deepfakes continue to improve.”

The “adult situation”

What if I told you many of today’s advances in technology began in the porn industry? Just pick up a copy of The Erotic Engine: How Pornography has Powered Mass Communication from Gutenberg to Google by Patchen Barss. It’s a fascinating read.

Apparently, people have wanted to read smut ever since the printing press was invented. The internet needed content to keep people clicking, camera and video technology needed more than BetaMax and Super 8, we needed ways to pay for things online, and we needed faster broadband to download all the naughty pics. All of these tech advancements have roots in Captain Stabbin’.

So, if AI deepfake technology can turn a comedian into Tom Cruise, then it can also turn anyone into an unwitting porn star.

A popular Twitch streamer named QTCinderella went live on the platform to tearfully document the pain and the humiliation she felt when she discovered her likeness was featured in videos on a deepfake porn site.

“This is what it looks like to feel violated,” she says. “This is what it looks like to feel taken advantage of, this is what it looks like to see yourself naked against your will being spread all over the internet. This is what it looks like.”

People have been making fake porn of celebrities for a long time, but nowadays the cost and the tech’s ease of use can make it an option for a vengeful ex or just a garden variety creeper. Federal revenge porn law enables victims of non-consensual pornography to sue the perpetrators, but it doesn’t address deepfakes specifically.

Is there a good side?

Well, this column has been thoroughly dystopian and depressing. Do deepfakes offer any benefits? Blessedly, yes!

“In April last year, a health charity partnered with David Beckham to produce a video and voice campaign to help end malaria,” writes Ashish Jaiman on Medium . “In the ‘Malaria No More’ campaign, Beckham spoke nine languages seamlessly for Public Appeal. The social campaign was a great example of using deepfakes to broaden the reach of a public message.”

Deepfakes can also be used in education. In one example, a deepfake JFK can come to life, explaining the need for ending the Cold War.

And while fake reporters are used as agents of state-sponsored misinformation, the inverse is also true. What if journalists in sensitive situations or hostile environments could use a “digital avatar” to report accurate information without disclosing their actual voice or identity?

But danger abounds, notes Tim Stevens, King’s College London’s Cyber Security Research Group director. “What kind of society do we want?” he asks. “What do we want the use of AI to look like? Because at the moment the brakes are off and we’re heading into a space that’s pretty messy.”

As society navigates the changing role of AI in daily life, let’s embrace the good and work collectively to mitigate the bad. If you see a video featuring me and the entire roster of the LA Lakers, it’s probably fake.

Vonetta Logan, a writer and comedian, appears daily on the tastylive network. @vonettalogan

AI is heading into a space that’s pretty messy.

AI’S PATH TO THE

SINGULARITY

DUPLICATING HUMAN INTELLIGENCE in a machine has proceeded in fits and starts over the last 70 or so years. But suddenly it’s gaining momentum at a dizzying pace, and the action promises to intensify as machines continue to improve themselves without the help of humans.

Here’s some of what’s happened along the way and some of what appears likely as the next chapters unfold.

1952 VOICE RESPONSE

Bell Laboratories develops a computer that responds to spoken numbers.

1958 LEARNING ALGORITHM

Computers take a step closer to consciousness of their own existence.

1962 VOICE RECOGNITION

The first computer to understand speech has a 16-word vocabulary.

1966 FIRST CHATBOT

Some users mistakenly think the ELIZA bot is intelligent because it mimics a psychiatrist.

1950 TURING TEST

Alan Turing devises a test to gauge whether a machine can think like a human.

1956 AI GETS A NAME

Delegates to the Dartmouth Conference use the term “artificial intelligence” for the first time.

1974-1980 FIRST AI WINTER

Government funding for artificialintelligence research dwindles.

1981 VIDEO GAME WINNER

A bot called “Rog-O-Matic” sometimes beats humans at Rogue.

1987-1993 SECOND AI WINTER

Funding diminishes because AI isn’t adding to the bottom line.

1980s KEYBOARDS DOMINATE

Keyboards push punchcards aside as the way to program.

1988 MORAVEC’S PARADOX

Computers complete tests like adults but lack even a baby’s perception.

1994 “CHATTERBOT” COINED

The term for programs that converse is later shortened to “chatbot.”

1997 CHESS CHAMPION

The Deep Blue supercomputer beats world chess champ Gary Kasparov.

1999 FATEFUL PREDICTION

Ray Kurzweil predicts computers will pass the Turing test by 2029.

1999 SINGULARITY SURVEY

Eighty percent of scientists polled say humans will lose control of technology.

2000 VOICE AND FACE

Sylvie, the first “verbot,” is a standalone virtual human interface.

2005 SINGULARITY PREDICTED

Ray Kurzweil embraces AI but says the singularity will arrive in 2045.

2010 SIGNIFICANT COMPANY

DeepMind, a neural network that learns to play video games, is established in the U.K.

2011 NEW JEOPARDY CHAMP

Watson, an IBM computer, beats the best humans on the TV quiz show.

2013 PRACTICAL APPLICATIONS

Watson begins helping to make decisions in cancer research.

2014 KEY ACQUISITION

Google purchases DeepMind, the neural network that plays video games.

2015 MOMENTOUS STARTUP

Sam Altman launches OpenAI with investments from Elon Musk, Peter Thiel, Reid Hoffman, et al

2016 CONQUERING “GO”

DeepMind’s AlphaGo, defeats champion Lee Sedol at the complex ancient game.

2016 CHATBOT AMUCK

Users teach Microsoft’s Tay to spew racism, sexism and authoritarianism.

2017 THE “T” IN GPT

The transformer is described for the first time in a scientific paper.

2018 GPT-1 INTRODUCED

OpenAI offers a chatbot that responds to questions with human-like texts.

2018 CHATTER IN ASIA

Xiaoice, a series of chatbots in Indonesia, attracts 500 million users.

2019 SEEKING A PROFIT

Formerly not-for-profit OpenAI starts a for-profit enterprise.

2019 SELF-LEARNER

OpenAI releases GPT-2, which learns without supervision and has 1.5 billion parameters.

2020 PARAMETERS RISING

Microsoft introduces a chatbot named for Alan Turing with 17 billion parameters.

2020 PICTURE PERFECT

Dall-E from OpenAI generates images without human instruction.

2022 STILL MORE PARAMETERS

OpenAI introduces GPT-3, upping computing capacity 100-fold.

2023 USEFUL IMAGES

Developers can integrate OpenAI’s Dall-E 2 into other programs. Microsoft uses it in Bing and Edge.

2023 UNFORTUNATE LAUNCH

Google announces its Bard chatbot, but it fails in its first public demonstration.

2023 THE BINGULARITY

ChatGPT appears aside Microsoft’s search engine and Bing re-enters our vocabulary.

2023 SEARCH WARS BEGIN

China-based Baidu “fully integrates” chatbot into all of its systems.

2023 THE NEXT BIG THING

OpenAI is expected to release GPT-4 with 100 trillion parameters.

2022 AI GOES MAINSTREAM

ChatGPT, a chatbot based on GPT-3, commands people’s attention.

2023 A REVENUE MODEL

OpenAI to begin charging a monthly fee for ChatGPT Plus, an enhanced version.

2023 ELEPHANT IN THE ROOM

Google expects to launch Sparrow, a sophisticated rival to ChatGPT.

2029 GRADUATION DAY

Kurzweil revises prediction: Computers are likely to reach par with humans 16 years earlier.

WHEN AI ECLIPSES _HUMANITY

THE SINGULARITY— the time when super intelligent computers surpass human understanding and shed human control— may soon be upon us / by

Ed McKinley

uppose a medical research team asks a chatbot to develop a vaccine to eradicate every variant of COVID19 in humans. It’s a perfectly reasonable request that could go shockingly wrong.

The machine might formulate a drug that renders recipients infertile, thus reducing the population to zero and eliminating the virus. That perfectly logical but chillingly cold solution achieves the goal but at the cost of pushing our species to the brink of extinction.

Perhaps the example seems extreme, but it’s far from absurd.

“This is exactly how a pure optimization process solves problems,” warns Roman Yampolskiy, a University of Louisville professor of computer science who’s written extensively on the subject. “People can fix that, but there are infinite similar possibilities.”

What’s more, the smarter AI gets the more dangerous it becomes, Yampolskiy says.

Knowing that, how concerned is he about the threat inherent in artificial intelligence? “I’ve devoted my life to it,” Yampolskiy tells Luckbox in a flat tone of voice. “I don’t see anything more important.”

But his life’s pursuit must get lonely. Despite doomsday warnings from generations of artists, mathematicians, engineers and entrepreneurs (see sidebar “You’ve Been Warned: The Dangers of AI”), hardly anyone seems willing to stand in the way of the explosive expansion of AI.

Of the hundreds of thousands of AI researchers in the world, perhaps 100 work full time on AI safety

with another 200 or so delving into related areas such as ethics or algorithmic justice, Yampolskiy notes. “I’m guessing here, but I don’t think it’s much bigger than that,” he says of his estimates.

Moreover, many of the scientists devoted to AI safety aren’t ensconced in academia—instead they’re working for big public companies like Alphabet (GOOGL), which owns the DeepMind computer labs, and smaller ones like privately held OpenAI, which produces the ChatGPT chatbot that’s making headlines daily.

Public or private, companies have a vested interest in developing and selling AI and don’t want to forfeit competitive advantage by slowing the technology’s progress, Yampolskiy notes.

Heaven or Hell ?

No one knows what will happen when artificial intelligence reaches the singularity—the point where it’s too smart for humans to control.

Whatever their motivations—financial or scientific—researchers tend not to consider the worstcase result of AI, he maintains. He calls it “the possibility of impossibility.” It’s the idea that no matter what scientists do they can’t stop AI from wreaking havoc on humankind.

Mounting danger

Artificial intelligence has been with us for some time now, beginning perhaps in 1935 with a paper Alan Turing wrote to describe a machine with memory, computing power and the ability to scan symbols.

AI has apparently reached the latter part of the first of three stages. It’s now AI, which can duplicate

human thought processes. Soon, it may enter the phase called AGI for artificial general intelligence, where it can equal human mental capacity. After that comes the singularity—artificial super intelligence or ASI—where machines become so smart that humans can’t control them.

Computers in the AI phase work out problems and serve up information with blinding speed. They may beat a human at chess, but they can’t carry on a convincingly human conversation.

Even in this current AI phase, computers pose

DESPITE DOOMSDAY WARNINGS

control their systems—how to guarantee their safety,” says Yampolskiy.

Yet machines won’t stop gaining intellectual power when they reach parity with humans. Instead, AGI will continue to add brain power until it becomes far superior to human intellect. Eventually, probably in this century, computers will far exceed human intellectual capacity.

The singularity

The era when AGI outstrips human thinking and becomes ASI is called the singularity. It doesn’t seem likely to give rise to Terminator-like super humans. But exactly what it will bring remains totally unknown

“That’s the scary part,” Yampolskiy asserts. What’s perhaps even more frightening is the fact that after the singularity a “pretty tight” mathematical proof supports the idea that a lower-level intelligence (humans) cannot indefinitely control higher-level intelligence (machines).

“You cannot provide a meaningful explanation for something with a trillion parameters,” Yampolskiy says. “Or if you can, then you can’t comprehend that explanation because the explanation is the model itself.”

dangers. ChatGPT, for example, is error prone. Don’t believe everything it tells you, Yampolskiy advises. It also plagiarizes when it’s not making up stuff that’s often convincing but sometimes clumsy.

Even in this somewhat crude but tantalizingly human-like state, AI threatens to put people out of work by taking over creative functions recently believed exclusive to humans. They include producing images, writing poetry and engaging in interesting if somewhat dull and fake conversation.

But the foibles and danger of smart machines don’t end there.

Artificial general intelligence

As AI improves, it approaches AGI status. That’s where computers become the intellectual equal of humans. Anything a human can conceive, the machine can conceive, too.

Computers haven’t achieved that state but might in an extremely short time, perhaps in just the next few years.

As they become smarter, they also become more dangerous and more unpredictable. Programmers don’t know how the machines will react to instructions or whether they’ll become erratic or malicious.

“No one in the world claims they know how to

ASI machines will use social engineering to trick people with deep fake images, video and audio. In one example, a computer could call you on the phone and convincingly mimic the voice of your boss or spouse, asking you to remind it of a password.

“We know social engineering attacks work on trained professionals,” Yampolskiy observes.

But despite the danger, the promise of free labor, both physical and cognitive, compels companies to develop super intelligent computers, he says. In fact, an arms race is already underway as companies vie for the next breakthrough, a headlong plunge he views as “dangerous” and “unethical.”

“They’re running an experiment on 8 billion people, and I don’t think any of us consented to that,” Yampolskiy says of the current proliferation of chatbots. “And the CEO of OpenAI [Sam Altman] says it’s either going to be really good, or we’re all going to die. And that’s the business plan.”

So, analyzing the peril of the singularity falls to science fiction writers instead of scientists, he laments.

“If we were smarter, we would totally put a moratorium in place until we figured out how to do it safely— if possible,” Yampolskiy suggests. “But because of economic incentives, that’s not going to happen. It’s not just large corporations—it’s the countries. If the U.S. doesn’t do it, Russia or China will do it.”

But the AI community has at times attempted to maintain control.

FROM GENERATIONS OF ARTISTS, MATHEMATICIANS, ENGINEERS AND ENTREPRENEURS, HARDLY ANYONE SEEMS WILLING TO STAND IN THE WAY OF THE EXPLOSIVE EXPANSION OF AI.

You’ve Been Warned: The Dangers of AI

STEAM LOCOMOTIVES AND THE TELEGRAPH WERE THE LATEST IN TECHNOLOGY WHEN CELEBRATED THINKERS BEGAN WARNING THAT MACHINES WOULD SOMEDAY OUTSMART HUMANS. WITH TIME, THEIR PREDICTIONS HAVE ONLY BECOME MORE DIRE. HERE’S WHAT A FEW ARTISTS, SCIENTISTS AND ENTREPRENEURS HAVE HAD TO SAY:

1863 / “ ... the time will come when the machines will hold the real supremacy over the world and its inhabitants. Day by day, we are becoming more subservient to them; more men are daily bound down as slaves to tend them, more men are daily devoting the energies of their whole lives to the development of mechanical life.”

Novelist Samuel Butler

1948 / “I believe that the abominable deterioration of ethical standards stems primarily from the mechanization and depersonalization of our lives, a disastrous byproduct of science and technology. Nostra culpa!”

Physicist Albert Einstein

1951 / “It seems probable that once the machine thinking method had started, it would not take long to outstrip our feeble powers. They would be able to converse with each other to sharpen their wits. At some stage, therefore, we should have to expect the machines to take control.

— Computer pioneer

Alan Turing

1965 / “ ... an ultraintelligent machine could design even better machines; there would then unquestionably be an ‘intelligence explosion,’ and the intelligence of man would be left far behind.”

— Mathematician I.J. Good, originator of the term “technological singularity”

1976 / “There are some acts of thought that ought to be attempted only by humans ... I had not realized ... that extremely short exposures to a relatively simple computer program could induce powerful delusional thinking in quite normal people.”

— AI pioneer Joseph Weizenbaum

2019 / “The world hasn’t had that many technologies that are both promising and dangerous the way AI is.”

Microsoft co-founder Bill Gates

2022 / “Bad AI may kill us all in 50 years, but the bulk of the harm of such an extinction event comes from the trillions of future humans that will never have a chance to be born in the billions of years that follow.”

— Ethereum founder Vitalik Buterin

2023 / “I worry that the technology will learn how to influence human users, sometimes persuading them to act in destructive and harmful ways, and perhaps eventually grow capable of carrying out its own dangerous acts.”

— New York Times columnist Kevin Roose

2014 / “The development of full artificial intelligence could spell the end of the human race. It would take off on its own and redesign itself at an ever-increasing rate. Humans, who are limited by slow biological evolution, couldn’t compete and would be superseded.”

— Cosmologist Stephen Hawking

2014 / “We need to be super careful with AI. Potentially more dangerous than nukes.”

Tesla and SpaceX CEO Elon Musk

2023 / “The bad case— and I think this is important to say—is, like, lights out for all of us.”

— OpenAI CEO Sam Altman

PHOTOS: GETTY IMAGES

Managing super intelligence (or not)

A decade ago, researchers concerned about the danger posed by ASI were proposing “confinement” or “boxing,” two terms for keeping it from getting free rein to do as it pleases. But hope for that has faded.

“The consensus is that boxing is impossible,” Yampolskiy says. “You cannot contain that system long-term. It may buy you a little bit of time, but everyone agrees the system will leak out.”

Keeping superior intelligence under wraps would require cutting off all contact with humans because the machine could bribe, threaten or simply outsmart its inferior captors and then make its escape, he contends.

Even proposals to limit AI to answering questions wouldn’t work in the long run because the machine could sneak additional information into the process to manipulate human operators, Yampolskiy says.

Besides, AI that’s fully contained wouldn’t transfer information to people and would therefore be of no use. “Why even do it?” Yampolskiy asks. “It’s a dead-end approach.”

ing, people will have no idea how it will react to commands, he says. It could even turn against its creators.

According to a scenario referred to as the “treacherous turn,” a computer system that’s still not very

The Three Stages of AI

1 / Artificial narrow intelligence (ANI). This is the current state of AI in which computers can’t duplicate human thought.

2 / Artificial general intelligence (AGI). At this stage, computers can conceive of anything humanly possible. It’s coming very soon.

3 / Artificial super intelligence (ASI). Also called the “singularity,” it’s when machines can out-think humans by a huge and increasing margin. It’s not science fiction, and it’s not far off.

Containing AI wouldn’t be the first task scientists have given up as hopeless, he noted, citing the case of perpetual-motion machines. Almost all researchers and inventors have ceased to experiment with creating a mechanism that defies gravity and friction to run forever. Alchemists aren’t trying to turn base metals into gold anymore, either.

Does that mean it’s too late to get control of AI? Not necessarily. Perhaps the scientific consensus is wrong, and AGI, ASI and the singularity will never happen. But Yampolskiy cautions that once researchers realize AGI has come into being, it’s already too late to stop it.

Optimists argue that developers could program ethics into AGI or ASI. But programmers aren’t very good at creating good software in general and intelligent software in particular, Yampolskiy contends. “I don’t think you can provide enough hard-coded rules for all possible dangerous situations,” he cautions.

To make matters worse, hackers penetrate chatbot systems like OpenGPT and command it to bypass the filters meant to guard against racism, sexism and other ills. “They get them to reverse those rules, so I don’t think it’s sustainable longterm against any committed adversary.”

Plus, as AI advances beyond human understand -

powerful could follow orders and pretend to be benign while it’s getting access to more resources. “At some point it goes, ‘OK, I don’t need you anymore,’” and becomes malevolent, Yampolskiy suggests.

So, who can protect us?

Government can’t help

State and federal legislators can make it a crime to write destructive AI, but Yampolskiy doubts that would help. “Viruses are illegal. They made spam illegal. Did that change anything?” he asks. At the United Nations, superpowers blocked restrictions that would have outlawed using AI for warfare, he notes.

Yet, individuals aren’t completely powerless to slow the march of AI toward oblivion for humans, he concedes. It begins with skepticism toward tools the AI community provides.

Don’t blindly accept what machines tell you—do your own research to verify the results of a search or the prose a chatbot turns out, Yampolskiy advises.

“Most people, just by the nature of their education, don’t understand that it’s not some authoritative source from Microsoft with lots of verified citations,” he says. “Some results it is giving them are misinformation. This is literally a BS generator.”

In his view, artificial intelligence will improve, but probably not enough.

“It will get smarter,” he acknowledges, “but you still have to verify. Let’s say right now it gives you 50% bullshit. In the future, it’s only 5% bullshit, but it’s still a lot.”

“THE POSSIBILITY OF IMPOSSIBILITY” STATES THAT NO MATTER WHAT SCIENTISTS DO, THEY MAY NOT BE ABLE TO STOP AI FROM WREAKING HAVOC.

AI & THE _NEXT ECONOMY

ARTIFICIAL INTELLIGENCE can spawn efficiency that will bring down wages and prices, but expect a bumpy ride / by Garrett

Baldwin

rtificial intelligence is boosting the global economy’s efficiency, profitability and productivity, but it’s also exacting a price. It could replace 85 million workers globally by 2025, the World Economic Forum (WEF) projects.

Yet the vast displacement won’t hit hardest among the working- and middle-class employees who’ve borne the brunt of job loss to automation over the last 40 years. Instead, this wave of innovation and adoption will take jobs away from content producers, artists and white-collar workers.

The realization that a group with as many people as the nation of Iran will be jobless within 36 months has quickly altered the debate on social policy, economic theory and political remedies.

Let’s discuss the macroeconomic and socioeconomic realities of all three buckets (without the insight of big data analytics) and then explore the themes that will soon dominate policy debates.

Economic impact

While the WEF report indicates AI could take over the aforementioned 85 million jobs in the next

couple of years, it also suggests the global economy could create 97 million jobs, thanks to the complementary benefits of AI tech.

Initially, automation will shoulder repetitive, banal or dangerous tasks, freeing workers for more important and interesting roles where they can make better use of their training. As a result, productivity per capita is expected to increase rapidly.

Because it’s a net gain, the number seems promising. The challenge is that the new jobs will require significant upscaling and training.

About 95% of the 1.4 million American workers likely to be replaced by AI will find new specialized jobs with higher pay, the WEF predicts. That said, the cost of retraining global workers could top $34 billion—or an average of $24,000 per displaced worker.

That raises the question of who will pay. A few companies have developed their own training, but taxpayers will finance much of it through new incentives and tax breaks for corporations. And what jobs are we discussing?

Today, AI isn’t flipping burgers at McDonald’s. It’s diagnosing cancer. It’s drafting legal documents with the skill of a third-year law student. It’s

SINCE 2000, THE WORLD’S GOVERNMENTS HAVE CREATED $185 TRILLION IN NEW DEBT, BUT THE GLOBAL ECONOMY HAS GROWN BY ONLY $46 TRILLION.

mimicking human speech, writing college-level papers, improving code exponentially, and translating complex language and speech.

In the future, AI will fill additional advanced roles, which will reduce wages and cut costs along supply chains.

So, what policy should address the deflation that technology will drive? Jeffrey Booth, the author of the book Price of Tomorrow, has argued that deflation creates abundance. AI can drive efficiency,

AI COULD ADD $15.7 TRILLION TO THE WORLD ECONOMY IN THE YEAR 2030 ALONE.

reduce costs and create more with less, he maintains.

In other words, deflation could be a good thing. But with the U.S. economy mired in $31.5 trillion of federal debt, the financial system faces a critical choice—add more debt to service the existing shortfall or use technology to grow the economy radically?

Venture capitalist and co-host of the All-In podcast David Friedberg suggests AI could help move the U.S. economy to hypergrowth that would pull the nation out of debt.

“The net benefit of this is economic productivity,” Friedberg says in a February podcast. “The end customers using [these tools] now have a lower cost to run their business. And their total net profits go up. This is what happens with every technology cycle. It always yields greater economic productivity.”

That’s why the economy grows and why technology can be such an important component of

economic growth, not debt, Friedberg notes, adding that “we’ve historically used financial engineering to drive economic growth.”

However, technological adaptation goes against the debt-based economic system. Over the last 25 years, the global economy has benefited from the miracle of deflationary technology like cell phones and extremely fast computers. Yet, central banks have used debt to paper over deflation even with the deteriorating return on investment.

Since 2000, the world’s governments have created $185 trillion in new debt. However, the growth return has underperformed. Despite this massive debt load, the global economy has generated only $46 trillion in growth.

Since the expansion of monetary policy in the 1970s, every new dollar of debt has generated less economic growth than the previous dollar. But central banks continue to pump out fiat capital in the face of deflationary outcomes. Expect more of the same and an ever-increasing debt load.

Social impact

Silicon Valley loves artificial intelligence, thanks to the twin benefits of efficiency and profitability. AI could add massive economic growth to the global system by 2030, amounting to $15.7 trillion, according to PwC. The breakdown includes productivity gains of $6.6 trillion on top of $9.1 trillion from “consumption-side effects.”

The economic debate will center on who pockets the gains. The social debate hinges on a basic ques-

The German news organization Der Spiegel predicted robots would eliminate human workers in 1964, 1978 and 2017. The job losses will soon accelerate as AI’s influence spreads.

tion: Just because AI can be applied to something, should it be?

Take the example of Major League Baseball, which has resisted the temptation to incorporate robotic umpires. The sport would probably benefit in some ways from a system that more accurately calls balls and strikes. But human error is part of the game. What would it be without rhubarbs?

Now consider human error at a larger scale. It’s part of the U.S. economy, and consulting and software businesses derive their very existence from resolving such errors and increasing efficiency. Will AI, big data and advanced analytics remove human error from the equation?

And what will that cost adherents of the broken window fallacy of economics, which states spending on something broken doesn’t lead to economic gain?

AI may resolve social and economic problems created by human error. Some 90% of automobile accidents, for example, are linked to human error, Stanford University noted in 2013. In 2016, IBM estimated that bad data linked largely to human error cost U.S. businesses $3.1 trillion. Plus, 95%

of AI automation would follow the same pattern of inflicting pain first on blue-collar workers in factories or behind the wheel of trucks. Then it would come for the lower-skilled white-collar jobs and then the high-skilled ones. Many were convinced it would never take over creative endeavors.

But AI has taken a different course, says OpenAI CEO Sam Altman.

85 million

The number of jobs AI could replace worldwide by 2025

“It’s going in exactly the other direction,” Altman maintains in an event hosted by venture capital firm Greylock Partners. “There’s an interesting reminder in here generally about how hard predictions are, but more specifically about [how] we’re not always very aware, maybe even ourselves, of what skills are hard and easy, what uses most of our brain and doesn’t or how difficult bodies are to control or make.”

$34 billion

The cost of retraining workers displaced by AI

$24,000

The average cost of retraining a worker who loses a job to AI

– World Economic Forum

The social impact of AI seems undeniable with such major shifts in the workforce. But the changes it’s bringing could go even deeper, shaking the very foundations of society.

It’s not enough to think just about politics and the responses of the central bank. AI could alter the basic nature of the market economy.

End of capitalism?

of cybersecurity events are linked to human error, the World Economic Forum says.

Using AI to improve those situations would have significant societal and financial benefits while displacing existing systems. What’s more, those three examples are among many AI will likely ameliorate.

Naturally, this focus on efficiency, productivity and streamlining will affect consultancies and engineering firms. It’s just a taste of the imminent white-collar revolution.

Until now, automation has been largely a blue-collar challenge that’s pushed down workers’ pay in the last four decades, according to the National Bureau of Economic Research.

Between 50% and 70% of the decline in wages was linked directly to automation, says a 2021 study by Daron Acemoglu and Pascual Restrepo highlighted in the Journal of Economic Perspectives. “The real earnings of men without a high-school degree are now 15% lower than they were in 1980,” they found.

Until recently, observers believed the current wave

In 2018, one of China’s top legal scholars, Feng Xiang of Tsinghua University, predicted in a Washington Post op-ed that AI would destroy the capitalist system.

Feng argued that technology billionaires would only increase their stranglehold over the economy— as if this were a U.S.-only phenomenon.

“If AI remains under the control of market forces,” he wrote, “it will inexorably result in a super-rich oligopoly of data billionaires who reap the wealth created by robots that displace human labor, leaving massive unemployment in their wake.”

He uses the article to present a soft endorsement of China’s socialist market economy. The key argument goes that while China has large AI companies with dominant market share, at least the government monitors them.

Perhaps Feng might consider the words of economist John Kenneth Galbraith: “Under capitalism, man exploits man. Under communism, it’s just the opposite.”

Moreover, Marxists have predicted the end of

AI COULD HELP MOVE THE U.S. ECONOMY TO HYPERGROWTH.

capitalism since 1848. And the German news organization Der Spiegel has forecasted mass unemployment since 1964 because of robotics and mainframes.

The idea of free and voluntary exchange as the central tenant of capitalism doesn’t register with its critics, and perhaps dictionary definitions of “corporatism” or “dirigisme” would better suit Feng because the economy aligns more closely with those ideas.

But OpenAI’s Altman also says he can envision AI’s impact on capitalism, but first he praises the system. “I think capitalism is awesome. I love capitalism,” he notes. “Of all of the bad systems the world has, it’s the best one—or the least bad one we found so far. I hope we find a way better one.”

But as artificial intelligence becomes artificial general intelligence (AGI) operating on the level of human intellect, danger sets in. “I think that if AGI really truly fully happens, I can imagine all these ways that it breaks capitalism,” Altman says.

Perhaps a new system will emerge. Or maybe AI or AGI will break up the centralized control in the economy exercised by players like Alphabet, Amazon and Microsoft. The democratization of AGI would in essence cast aside the criticisms of Feng and other AI political economists.

Other risks move beyond the traditional largescale trends, too. Mark Lippett, CEO of AI chip company XMOS, told Forbes in 2021 he’s concerned about AI invading privacy because it relies on constant data collection.

“What we say and do will become increasingly ‘on the record’ unless consumers are educated to make informed decisions about where AI is deployed,” Lippett says.

But protecting data privacy is just one of many shifts that policy makers should address sooner rather than later.

Political impact

A dramatic acceleration in AI adoption through 2025 will clearly make unemployment and job training a major political issue in the elections of 2024 and 2028. But how will the political parties address it?

Do Democrats become Luddites and try to limit the advance of AI? Or will they fight the widening inequality in wages that technology will bring?

Do Republicans become the

party of robot owners as income inequality grows? Or will they reevaluate capitalism and embrace the universal basic income (UBI) now under scrutiny in Germany and Chicago?

In fact, UBI could become the subject of heated debate. When Andrew Yang ran for president in 2020, he pushed for a $1,000 monthly payment to every American adult over 18. If AI pushes the American labor force participation rate below 60%, it’s fair to expect a revival of interest in UBI.

AI will also figure into the discussion of the student loan bailout. What happens when AI replaces graduates with engineering, science, mathematics and technology degrees and thus lowers the return on investment for those majors?

Then there’s the issue of AI and big data.

“AI is only as good as the data that is used to train it,” says Francois Laborie, president of Cognite, a Norwegian software company. He told Forbes that “this becomes dangerous when a wrong prediction leads to potentially life-threatening events, such as manufacturing accidents or oil spills.”

It would make sense to use AI to engage in analytics, cut fat from government programs and streamline benefit systems. AI can also reduce red tape, slash bureaucracy and optimize welfare. After all, the U.S. falls victim to roughly $60 billion in Medicare fraud annually.

But the problem is that AI can fail when trying to find the sources of such problems.

An example of artificial intelligence gone wrong occurred in 2021 when the Netherlands used AI to examine the authenticity of childcare benefits claims.

The AI erroneously estimated 26,000 parents had filed fraudulent claims. The resulting debacle imposed hardship on working-class families and prompted the resignation of a number of officials.

Imagine thousands of newly minted IRS agents acting on the conclusions of faulty artificial intelligence. The result could be economic paralysis.

Looking ahead

The AI debate will continue as the technology becomes increasingly prevalent in the workplace and at home.

Displacing workers is nothing new, but AI is shifting the burden of change from blue-collar workers to white-collar professionals.

Hence, it makes sense to expect AI to shape up as a major policy issue in the 2024 elections and beyond.

Garrett Baldwin, a commodity and trade economist, serves as Luckbox editor-at-large. He actively trades value and momentum stocks and wagers on sports and prediction markets.

THE CURRENT WAVE OF AI INNOVATION AND ADOPTION COULD TAKE JOBS AWAY FROM ARTISTS, PROGRAMMERS, CONTENT PRODUCERS AND OTHER WHITECOLLAR WORKERS.

IF AI DOESN’T TAKE YOUR JOB, IT’LL CHANGE IT . A LOT.

THE NEW REALITY will favor those able and willing to collaborate effectively with AI

by James Melton

is here. How soon it transforms the economy depends on how fast the technology advances. But experts agree the transition to the “jobs of tomorrow” is already underway.

In late 2022, ChatGPT, an AI chatbot developed by San Francisco-based OpenAI, introduced the public to the potential of generative artificial intelligence. That’s the kind of AI engineers can train to generate new outputs, like sonnets, graphics or awkwardly written term papers.

Soon, experts say generative and other forms of AI will create millions of jobs and destroy millions of others. If forecasts prove correct, we’re facing an economic realignment as intense as the industrial revolution–only faster.

In a 2020 report, the World Economic Forum (WEF) predicted AI would create 97 million new jobs across 26 countries by 2025, while destroying 85 million jobs. That would be a net gain in total employment. But it’s virtually certain the transition will leave some people behind. Millions of others will need to retrain and pick up new skills.

Harry Holzer, an economist and professor of public policy at Georgetown University, put it in stark terms: “There’s a chunk of people who never get reemployed again,” he told Luckbox.

Below are examples of how AI could affect selected industries and occupations as it marches across the economy.

Knowledge workers at risk

Waves of tech advancement have disrupted economies for hundreds of years. Typically, those displaced are primarily low-skilled workers who see their tedious jobs taken over by machines.

But this time, it’s different, according to Sam Altman, CEO of Open AI. Speaking last September at an event hosted by venture capital firm Greylock Partners, Altman made it clear that generative AI systems like ChatGPT are coming for creative and other skilled, white-collar jobs first.

“If you asked people 10 years ago about how AI was going to have an impact, with a lot of confidence from most people you would’ve heard, ‘first, it’s going to come for the blue-collar jobs—working in the factories, truck drivers, whatever. Then it will come for the low-skill white-collar jobs—then the very high-skill, really high-IQ white-collar jobs, like a programmer or whatever. And then very last of all, and maybe never, it’s going to take the creative jobs,’” Altman said. “And it’s going exactly the other direction.” Does that mean artists, lawyers, doctors and (heaven forbid) journalists will soon be out of work? Probably not, Holzer says. But he thinks jobs like that will change dramatically. The new reality will favor those able and willing to collaborate effectively with AI and use the time saved to expand the scope of their jobs, he said.

Software and coding

Earlier this year, Google (GOOGL) tested various AI-powered chatbots. It determined ChatGPT, from rival OpenAI, qualified for a job as a level-three soft-

WE’RE FACING AN ECONOMIC REALIGNMENT AS INTENSE AS THE INDUSTRIAL REVOLUTION–ONLY FASTER.

Most automatable

Among all industries, these can use AI to take over the most tasks.

ware engineer, according to reports by MSNBC and PC Magazine.

Based on job listings posted on Google’s recruiting website, that position pays about $180,000 per year. And AI doesn’t need health insurance.

The coding prowess of AI was evident even before ChatGPT was released. In August 2022, accounting and consulting firm Deloitte reported that an unnamed AI supercomputer placed in the top 54.3% of coders, based on its performance across 10 coding competitions hosted in 2021 and 2022, each with more than 5,000 participants.

That’s possibly bad news for software writers but good news for software companies facing a talent crunch. Among other things, Deloitte says AI could benefit “software companies struggling to recruit sufficient software development professionals” by partially automating “low-level coding projects,” lowering costs.

That automation could happen sooner than most people realize. In late January, the news website Semafor reported that OpenAI, the company behind ChatGPT, has hired contractors “who are creating data for OpenAI’s models to learn software engineering tasks.”

OpenAI previously trained ChatGPT to write code using data collected from GitHub website, an internet hosting service for software development owned by Microsoft (MSFT). “But in this case, OpenAI appears to be building a dataset that includes not just lines of code but also the human explanations behind them written in natural language,” Semafor reported.

However, Microsoft—OpenAI’s largest investor— insists it sees human creative input as vital to the software development process even though software developers already use generative AI to write around 80% of their code.

At the 2023 World Economic Forum, held in Davos, Switzerland, in January, Microsoft CEO Satya Nadella said: “It just so happens that now [the developer] has 80% leverage in doing what he’s doing. He’s still the pilot, but he does have a co-pilot,” Nadella said.

Manufacturing jobs and Industry 4.0

Among companies that make stuff, AI is part of a sweeping agenda called the Fourth Industrial Revolution, or Industry 4.0, in which intelligent computers will bring a fourth revolution to manufacturing,

just as steam and waterpower, electricity and digital automation, respectively, powered the first three.

In a 2022 report, the Manufacturing Leadership Council, part of the National Association of Manufacturers, called AI “the most potentially significant technology for manufacturing’s future.” Its uses, the group says, will include “software applications used on the factory floor, to robotic systems used to help assemble products as well as move materials, to systems used in the design, simulation, customer interactions, supply chain and logistics, and many others.”

The economic potential is enormous. An article

published online last summer by McKinsey & Co. said manufacturing—if effectively transformed by AI and machine learning—could add $275 billion to $460 billion to U.S. gross domestic product by 2030 and create up to 1.5 million jobs.

Separate McKinsey data says manufacturers could use the current technology to automate up to 58% of manufacturing “work activities.” And, while manufacturing workers spent 48% of their time on physical and manual tasks in 2016, that will drop to 35% by 2030. That means manufacturing jobs will differ from the factory jobs our parents and grandparents had—or even those available today.

The use of AI in manufacturing goes beyond its impact on factory workers. According to the research firm Gartner, generative AI already enables sectors like automotive, aerospace and defense “to design parts that are optimized to meet specific goals and constraints, such as performance, materials and manufacturing methods.”

Media and journalism

In journalism, news organizations like the Associated Press already use AI tools to automate parts of the writing and editing process. But newsrooms can trust AI only so far.

CNET, a news website that covers technology and consumer electronics, found out the hard way that AI needs–at the very least—careful fact-checking. In November 2022, the team that runs the site’s

“THERE’S A CHUNK OF PEOPLE WHO NEVER GET REEMPLOYED AGAIN.” —HARRY HOLZER, A GEORGETOWN UNIVERSITY ECONOMIST, ON THE CHANGES AI WILL BRING

Source: McKinsey Global Institute analysis

Money section experimented with using an “internally designed AI engine” to write and publish 77 stories. Even though humans conceived the story outlines and edited the stories, CNET identified numerous errors in the AI-assisted articles. In January, CNET paused its use of the AI engine.

CNET’s fumble didn’t stop Buzzfeed (BZFD)— which owns several news and entertainment websites—from announcing plans to incorporate AI into its coverage over the next three years. The announcement caused a brief rally in Buzzfeed stock, which has since leveled off.

Lawyers and law firms

Language-model AI tools can help attorneys automate functions like writing drafts of contracts and briefs and, to some degree at least, conduct legal research, said Sharon Nelson, an attorney and president of Sensei Enterprises, a digital forensics, cybersecurity and information technology firm.

said. (And yes, as a law school dean, he has a bias.)

“If you want to be part of a profession that’s going through significant change and be a part of its future, this is the moment,” he said.

Winners and losers

Not

We

“I think AI is going to replace lawyers at the lower end of things,” Nelson told Luckbox . “You know, why do you need somebody to do research for you when you have AI to do it for you? So, you don’t necessarily need some of the lower functions. The people who are in danger in my mind are the paralegals and maybe the lower level of associate.”

When ChatGPT was released, the U.S. legal profession was already using AI in a big way.

According to Business Insider, large firms using AI include New York-based Shearman & Sterling; White & Case, headquartered in Chicago; and San Francisco-based Orrick. They aren’t alone. In a 2021 survey of business leaders by analytics firm RELX, 72% of legal industry executives said their businesses were already using AI.

The transition to AI-powered lawyering doesn’t have to be a threat, says Andrew Perlman, dean of the Suffolk University Law School.

“It’s very hard to say what the impact is going to be on lawyer jobs,” Perlman said. “I think it’s easier to predict that it is going to change how lawyers do their jobs.”

He said tools like ChatGPT make lawyers more productive by taking over routine tasks like writing first drafts of emails and legal documents.

Does the uncertainty make this an opportune time to drop out of law school? Absolutely not, Perlman

“There are two groups of workers who will be losers in this process,” Georgetown’s Holzer told Luckbox. “One is people who are displaced, especially the people … who will be displaced and who will have difficulty getting retrained for something else. That’s usually somewhat older workers and less-educated workers.”

The second group likely to lose out, he said, are those who aren’t directly put out of work but become less valuable as AI takes over tasks they used to perform. He says the automatable parts of an individual job “might be 20% of a person’s tasks or 40% or 60%. The higher the percentage of the tasks that are replaced, the more likely they are to become unemployed.”

As AI changes how people do their job, he added: “People will have to adapt and pick up a new set of tasks if they want to stay in the same line of work.”

AI WILL CREATE MILLIONS OF JOBS AND DESTROY MILLIONS OF OTHERS.

In other words, AI might not take your job (at least not right away), but you can expect it to change how you do it dramatically. As AI takes over tasks, Holzer says, the new reality favors those able to take on new ones and reengineer their jobs to collaborate with AI.

As always, the future will belong to the most adaptable.

Andrew Perlman, dean of the Suffolk University Law School, says AI is making this an exciting time to study law.

THE AI _ROUNDTABLE

FOUR EXPERTS weigh in on the state of generative AI and the impact of ChatGPT. Just to be fair, we also asked the chatbot for its opinions.

by James Melton

Luckbox: On a scale where “1” stands for pocket calculators and “100” is Skynet—the superintelligent group mind that rules the future in the Terminator movies—what’s the current state of artificial intelligence (AI) technology?

Domingos: We’re at 10. We’ve come a long way, but there’s far more to go.

Selman: I would say 60 to 70. If you had asked me the question last fall, three months before ChatGPT, I would have said 10 or even five. Because a few months ago, it was not clear that AI systems could understand language in a meaningful way. I had my undergraduate class do a bunch of experiments with Google Translate. It could do these things like translation without truly understanding what was being said. Then ChatGPT came out, and I’ve repeated these experiments. It gets the meaning of language surprisingly well. That gets you to a whole new level because language is the key thing that separates humans from other animals.

Schmidhuber: This scale does not make sense because the upper end doesn’t. Unlike in Schwarzenegger movies, supersmart AIs won’t want to terminate all humans. Supersmart AIs will mostly be interested in other supersmart AIs, not humans. Just like humans are primarily interested in other humans, not in ants.

ChatGPT: The current state of AI technology is around 20 to 30 on the scale. We have made

advances in AI technology such as machine learning and natural language processing. However, technology is still limited in its ability to think and act independently. AI is still dependent on human input and cannot make decisions on its own. And most AI technology is limited to specific tasks.

What will be most profoundly affected by recent advances in generative AI?

Yampolskiy: Sam Altman just commented on that. We used to predict plumbers would go first and then accountants and no one would touch the artists, and it’s the exact opposite. My plumber is doing well. My artist is out of a job.

Domingos: Creation of routine documents and images.

Schmidhuber: Yes, it will affect desktop jobs that are about producing new documents from older documents.

Selman: AI will affect anything at the level of a knowledge worker. At financial companies, a ChatGPT-like system could read the millions of documents that these companies have internally. And could give you analysis reports that might be better

PEDRO DOMINGOS

PROFESSOR EMERITUS OF COMPUTER SCIENCE AND ENGINEERING, UNIVERSITY OF WASHINGTON AND AUTHOR OF THE MASTER ALGORITHM: HOW THE QUEST FOR THE ULTIMATE LEARNING MACHINE WILL REMAKE OUR WORLD

THE SINGULARITY IS INTELLIGENCE INCREASING EXPONENTIALLY WITHOUT LIMIT, AND THAT’S PHYSICALLY IMPOSSIBLE.

—PEDRO DOMINGOS

than human analysts could come up with because analysts could only read a few thousand reports.

ChatGPT: The areas of the economy that will be most profoundly affected by recent advancements in generative AI are the creative arts and media and the financial services industries. In the creative arts and media, generative AI can be used to create content such as music, images and videos, allowing for the potential to automate content generation. On the financial services side, generative AI can be used to generate and interpret data, which could potentially automate decisions related to risk management, investment strategies and more.

Do you think the singularity will occur?

Domingos: No. The singularity is intelligence increasing exponentially without limit, and that’s physically impossible. A weaker notion is that AI will evolve to be completely beyond our understanding, and that’s also unlikely. We can stay in control of AI while making it extremely smart.

ChatGPT: I believe singularity will eventually occur. AI is rapidly advancing and has already outpaced humans in many areas, such as playing chess and [the ancient board game] Go. Furthermore, AI is increasingly being used in everyday life, such as in self-driving cars, and it is becoming increasingly sophisticated. It is only a matter of time before AI surpasses humans in all areas and the singularity is reached. However, this will still be a long way off.

If you expect the singularity to occur, when is it likely to happen?

Yampolskiy: [Computer scientist Raymond] Kurzweil is doing an excellent job with very specific analysis. He said that in 2023, we would have enough computing power to start seeing the human level. In 2045, he thinks AI will be as good as all of humanity. That makes sense. Is he off by a couple of years? Maybe. What difference does it make?

Schmidhuber: History seems to converge in an Omega point in the year 2040 or so. I like to call it Omega because a century ago, Teilhard de Chardin called Omega the point where humanity will reach its next level. Also, Omega sounds much better than “singularity.” (For a more detailed answer see the sidebar on pg. 27)

ChatGPT: It will be decades before we reach the

singularity. AI is still in its infancy and there is a lot of work to be done before it can surpass humans. Even if the development of AI is accelerated, it will still take a long time before we reach the singularity.

If you expect the singularity to occur, are you concerned about it?

Yampolskiy: Suppose you have free labor, physical and cognitive. It will impact the economy, even if we manage to control it somehow, which I’m not saying we will. But even if we managed to have an obedient, friendly, superintelligence, we must reevaluate the business model with free labor. It could be some abundance model or shared benefit model. Talking about splitting profits is meaningless in that world.

Selman: One aspect of the singularity I can’t entirely agree with is that the systems would automatically work against us. Once they have a super level of intelligence, is that immediately dangerous? The singularity story has an angle that assumes it would work against us. It could be a knowledgeable, smart system that works for us or with us. We must be concerned about it. But I am confident that it will still be a system fielded by humans and be part of our society.

ChatGPT: Yes, I am concerned that the singularity could be harmful to humans. If it becomes too powerful, artificial intelligence could threaten human safety and autonomy. It could be used for malicious purposes, such as surveillance or manipulation of populations.

The consensus is that AI will create more jobs than it destroys. What’s your view?

Selman: I don’t think that’s true at all. Economists always like to say that, but it’s unlikely. The surprise here is automating manual labor with a physical robot is surprisingly expensive. We had some renovations in our house, and the guys were doing woodwork. A robot would be way more expensive than the $20 to $40 an hour they charge for a human body. But the administrative tasks needed to run

YAMPOLSKIY ASSOCIATE PROFESSOR, J.B. SPEED SCHOOL OF ENGINEERING, UNIVERSITY OF LOUISVILLE, AUTHOR OF ARTIFICIAL SUPERINTELLIGENCE: A FUTURISTIC APPROACH AND EDITOR OF ARTIFICIAL INTELLIGENCE SAFETY AND SECURITY

ROMAN

THE CONCERN IS WE HAVE GOTTEN GOOD AT CREATING VERY CAPABLE SYSTEMS. BUT THE SAFETY AND SECURITY RESEARCHERS NEED TO KEEP UP.

—ROMAN YAMPOLSKIY

AI and the (Really) Big Picture

JÜRGEN SCHMIDHUBER, SOMETIMES CALLED THE FATHER OF ARTIFICIAL INTELLIGENCE, TRACES THE ROOTS OF AI BACK TO THE BEGINNING OF THE UNIVERSE.

In a sense, Schmidhuber believes the roots of AI reach back to the beginning of time itself.

“In 2014, I found a beautiful pattern of exponential acceleration in it,” said Schmidhuber—co-founder and chief scientist at the Swiss AI firm NNAISENSE and director of the AI Initiative, King Abdullah University of Science and Technology in Saudi Arabia.

Based on that pattern, “history seems to converge in an Omega point in the year 2040 or so.” The “Omega” is how he refers to the idea others call the singularity.

“Let’s start with the Big Bang 13.8 billion years ago. We divide this time by four to obtain about 3.5 billion years,” Schmidhuber said. At that point— Omega minus 3.5 billion years—life emerged on Earth.

Divide by four again, and you get to 900 million years ago when animal-like life emerged. Do it again, and you get to roughly the point when mammals appeared.

Keep that up, Schmidhuber said, and you find dates that coincide with when the first primates emerged, the first hominids emerged, when humans invented stone tools, when we first controlled fire, and other historical and technological milestones.

BART SELMAN

Schmidhuber said 2030 will be “Omega minus 13 years.” At “more or less the year 2030,” he said, “Cheap AIs will have human brain power.” Then during the final 13 years or so until Omega, “incredible things will happen.”

“But of course, time won’t stop with Omega. Maybe it’s just human-dominated history that will end,” Schmidhuber said. “After Omega, many curious metalearning AIs that invent their own goals … will quickly improve themselves, restricted only by the fundamental limits of computability and physics.”

And what happens then? Supersmart AIs might explore space, build self-replicating robot factories in the asteroid belt and “transform the solar system and within a few hundred thousand years the entire galaxy and within tens of billions of years the rest of the reachable universe. Despite the light-speed limit, the expanding AI sphere will have plenty of time to colonize and shape the entire visible cosmos.”

“The universe is still young, only 13.8 billion years old,” Schmidhuber said. When the universe is four times older—about 55 billion years old— he expects the visible cosmos to be “permeated by intelligence. Because after Omega, most AIs will have to go where most of the physical resources are to make more and bigger AIs. Those who don’t won’t have an impact.”

Mind. Blown.

a university? That I could see automated. I’m not sure where everybody would find these extra jobs.

Schmidhuber: It’s easy to predict which jobs will disappear but hard to predict which new jobs will be created. Two hundred years ago, most jobs in the Western world were in agriculture. Today, only 1-2%. Nevertheless, unemployment rates are low, especially in countries with many robots per capita. Why? Because humans invented lots of new jobs.

Domingos: I agree. AI will create many new kinds of jobs, as previous forms of automation have. It will create jobs in areas that complement it, and it will make many things cheaper, leaving people with more money that will be spent on other things and create more jobs.

ChatGPT: While the consensus is that AI will create more jobs than it destroys, it’s important to understand the potential disruption of jobs due to generative and other forms of AI. Therefore, employers, workers and policymakers should take proactive steps to prepare for the potential disruption of jobs caused by AI.

What is your biggest concern about the recent acceleration in AI capabilities?

Domingos: That people will mistake these capabilities for artificial general intelligence (AGI).

Schmidhuber: I am not concerned about the acceleration of AI; I welcome it. The acceleration is not so recent either: since 1941, when Konrad Zuse completed the first working program-controlled computer, every five years, computing got 10 times cheaper. Today, 80 years later, hardware is millions of billions times faster per unit price. Our AIs have greatly profited from this acceleration.

Yampolskiy: The concern is we have gotten good at creating very capable systems. But the safety

PROFESSOR OF COMPUTER SCIENCE, CORNELL UNIVERSITY AND FELLOW OF THE ASSOCIATION FOR COMPUTING MACHINERY, AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SCIENCE AND ASSOCIATION FOR THE ADVANCEMENT OF ARTIFICIAL INTELLIGENCE

AI WILL AFFECT ANYTHING AT THE LEVEL OF A KNOWLEDGE WORKER.

—BART SELMAN

C hat GPT

CHATGPT (V3.5): THE PERFECT AI CHATBOT—WITTY, AUTHORITATIVE AND DEEPLY LIMITED. JOIN ME ON THE PANEL TO DISCUSS MY POTENTIAL FOR WORLD DOMINATION ... ER, I MEAN, IMPROVING HUMAN-AI CONVERSATION. *

and security researchers need to keep up. No one in the world claims they know how to control their systems, how to guarantee their safety. But because of this arms race condition between Google, Microsoft and whoever, they don’t care. They just want to get their next $30 billion. And that is dangerous, unethical. They’re running an experiment on 8 billion people, I don’t think any of us consented to that. And the CEO of OpenAI says it’s either going to be really good, or we’re all going to die. And that’s the business plan.

Selman: Malicious actors, like other governments and military, will develop AI. That is a risk factor.

ChatGPT: The primary concern with AI is the potential for it to be used to exploit people and businesses, including the potential for automated hacking and malicious data collection. The lack of transparency and accountability for AI-related decisions can create legal and ethical dilemmas. Finally, AI can lead to job displacement and income inequality, replacing some workers with robots and automation.

Can free-market principles contain malicious AI? Or is regulation required?

Domingos: Neither. The government needs its own AIs for defense, intelligence, law enforcement, dealing with companies’ AIs, etc.

Schmidhuber: It’s governments who are support-

ing the creation of malicious AIs to fight or spy on other governments. The free markets are mostly about “good AI” because AI companies want to sell you something, and you’ll buy only AIs you think are good for you.

Yampolskiy: If we were smarter, we would totally put a moratorium in place. And until we figured out how to do it safely, if possible, we won’t touch this. But because of economic incentives, that’s not going to happen.

Selman: It must be a partnership between companies and governments. Governments move too slowly to understand the complexity of modern technology issues. But companies like Google and Microsoft have an interest just like a self-driving car company working on self-driving cars has an interest in making safe systems. The government has a role there.

ChatGPT: Government regulation is necessary to contain malicious AI. As the technology industry is rapidly developing, the threat of malicious AI is becoming increasingly real. Free-market principles can be effective in some cases. However, given AI’s complex and potentially dangerous nature, government regulation is the safest and most reliable way to protect against malicious AI.

The government and employers could use AI to reduce the work week. Do you expect that to happen?

* WE ASKED CHATGPT TO WRITE ITS BIO FOR THIS ROUNDTABLE USING THE FOLLOWING PROMPT: “WRITE A HUMOROUS, BUT AUTHORITATIVE, 30-WORD MAXIMUM BIO FOR CHATGPT (V3.5) AS IF IT WERE TO APPEAR AS A PANELIST ON A ROUNDTABLE WITH AI EXPERTS DISCUSSING THE FUTURE IMPLICATIONS OF CHATGPT AND AI. —ED MCKINLEY

THE AREAS OF THE ECONOMY THAT WILL BE MOST PROFOUNDLY AFFECTED BY RECENT ADVANCEMENTS IN GENERATIVE AI ARE THE CREATIVE ARTS AND MEDIA AND THE FINANCIAL SERVICES INDUSTRIES. —CHATGPT

Selman: I think that’s the positive side. Why not have a three- or four-day work week and, finally, see the benefits of automation?

Domingos: The work weeks of some people may be reduced. Others will work harder than ever.

Schmidhuber: Not in all countries. Let’s learn from the past: Soon after industrial robots arrived many decades ago, some European countries greatly reduced the work week. But this trend stopped and partially reversed a while ago.

ChatGPT: I believe that in theory, the government and employers could use AI to reduce the work week for workers, but I expect that this is unlikely to happen in practice. Many employers are likely to be hesitant to reduce the work week of their employees, as it could lead to lower profits.

Mark Cuban says AI could create the world’s first trillionaires. What do you think about that prediction?

JÜRGEN SCHMIDHUBER

DIRECTOR, AI INITIATIVE, KING ABDULLAH UNIVERSITY OF SCIENCE AND TECHNOLOGY AND CO-FOUNDER AND CHIEF SCIENTIST (FORMER PRESIDENT), NNAISENSE. SCIENTIFIC DIRECTOR, IDSIA (ISTITUTO DALLE MOLLE DI STUDI SULL’INTELLIGENZA ARTIFICIALE)

Domingos: Quite possible.

Selman: That is probably true. We’ve seen in academia already that not having a GPT in-house and not having direct access to the actual parameters of the model makes it hard to build on it. OpenAI and Microsoft control ChatGPT, creating a power imbalance. That is super valuable.

Schmidhuber: Inflation will create the first trillionaires. Recall that a dollar today is worth just a tiny percentage of what it used to be and keeps shrinking. That’s why people today have many more dollars than their ancestors. It’s similar for other currencies. Trillionaires are not new. 100 years ago, in 1923, there were many trillionaires in Germany due to hyperinflation.

ChatGPT: On the one hand, AI could create immense wealth for specific individuals and businesses able to capitalize on technology. On the other hand, it could be argued that this wealth would be concentrated among a small group of people and could further exacerbate existing economic inequalities. It’s worth considering that AI could be used to create positive change in the world, too—not just wealth.

How would you handicap the dominant market frontrunners in integrating generative AI and search? (Google, Microsoft, Baidu, etc.)

Domingos: Google is still the leader, but it needs to get better at productizing its research and be more willing to take risks.

Schmidhuber: They are pretty much on the same level. The basic algorithms for ChatGPT and similar language models are artificial neural networks called “attention-based transformers.” I am happy about that because over 30 years ago, I published the variant that’s now called “transformers with linearized self-attention.”

ChatGPT: Overall, Google is currently the dominant leader in the integration of generative AI and search. However, Microsoft and Baidu are investing heavily in the field and have released their own AI-powered assistant and search products. It remains to be seen who will come out ahead in the long term, but for now, Google is the clear frontrunner.

SUPERSMART AIS WILL MOSTLY BE INTERESTED IN OTHER SUPERSMART AIS, NOT HUMANS. JUST LIKE HUMANS ARE PRIMARILY INTERESTED IN OTHER HUMANS, NOT IN ANTS.

—JÜRGEN SCHMIDHUBER

AI IMITATES_ART

FROM PAINTING to rap music, artificial intelligence is invading the art world. Creatives are coping with the fallout. / by Kendall Polidori

Singer-songwriter Nick Cave didn’t like what he was hearing.

“This song is bullshit, a grotesque mockery of what it is to be a human,” he exclaimed. He was responding to what ChatGPT came up with when asked to compose original music and lyrics in his style.

It wasn’t just the aesthetics—Cave disapproved in the principle of a machine mimicking art, labeling it “replication as travesty.”

Fair. But he might be missing the point.

Artificial intelligence, or AI, has been around for a few years, but ChatGPT’s public release in November alerted the general population to the technology, especially in creative fields, such as music, visual arts and writing.

ChatGPT writes original lyrics in the style of any recognized musician in seconds, turns out a writerly blog post on any topic almost instantly, and generates fresh images in the style of professional painters, graphic designers and photographers.

It’s impressive enough to worry a lot of creatives, but Maya Ackerman would tell them not to fret. She’s CEO and co-founder of WaveAI, which has one platform to write lyrics and another to create melodies.

“The best way to really understand these tools is to use them,” Ackerman says. “These machines are not meant to replace people. Try to make something good with it.”

Image intelligence

With text-to-image platforms—including DeepAI, Fotor, Dezgo, OpenAI’s DALL–E, Midjourney and AiArtist—users type in keywords or descriptions of images they want.

They might ask for “an illustration of a hound dog playing a red Gibson Les Paul.” Within minutes, images inspired by the request appear.

The AI systems were trained on a large collection of artists’ work, such as paintings by the likes of Vincent van Gogh and Pablo Picasso. That inspired Oregon-based artist Erin Hanson to type the words “an oil painting in the style of Erin Hanson” into one of the platforms. She was stunned by the results.

“It’s beautiful, but only because it’s based on beautiful artwork created by human beings,” she says.

Hanson is among thousands of artists whose work has been used to train AI systems like Stable Diffusion—without her permission. Unlike most, she’s researched the copyright laws and found she has the right to “prevent the use of his or her name as author of any work of visual art which they did not create.”

She hopes the choice to opt-out of data collection will become widespread. At press time, Stable Diffusion V3 was enabling artists to opt-out from use of their images.

While painters and photographers wrestle with AI issues, the technology is also becoming a factor in video work.

GENERATIVE AI TOOLS HELP OVERCOME VERY SPECIFIC SONGWRITING CHALLENGES.

Hip-hop artist Dwan Howard, known as Curtiss King, collaborated with the AI platform LyricStudio to create a No.1 iTunes album.

PHOTO: COURTESY OF CURTISS KING

The sound of AI

MUSICIANS CAN USE AI MUSIC PLATFORMS TO HELP WRITE TUNES AND LYRICS. HERE ARE LUCKBOX ’S TOP 5:

LyricStudio provides endless lyric prompts to help spark new ideas.

Songmastr can automatically master any song (wav or mp3) to an uploaded reference track.

AIVA acts as an electronic composer.

Amper Music creates songs from millions of individual samples and thousands of purpose-built instruments.

Boomy helps create original songs that artists can monetize.

Video assistants

Shane Verkest, who’s freelancing as a production assistant and video editor, has been using AI to help him deal with the medium.

“I think this will create more accessibility for people to create things and shift the model where maybe you don’t need a super big budget anymore,” Verkest says. “The things that kids can make from their bedroom on their cellphones are about to get cooler.”

Verkest doesn’t fear AI will take his job, but he understands other artists’ concern. He hopes the technology will work in tandem with creatives.

While he considers AI-generated artwork impressive, he feels there’s a hollowness to it. “There’s still going to be a place for human art,” he concludes.

Still, AI-generated art is winning competitions, and AI comic books are prompting officials to reconsider of the merits of copyright. That success also raises the question of whether AI art is going to erase human art.

“I don’t think so,” Hanson says, “but if it did, it would be stealing the emotional content of other artists’ work. When you are in front of an original oil painting, it has more of an emotional impact than in the identical canvas print sitting right next to it.”

That divide between the real and the synthetic can occur in music, too, but artists can perhaps overcome it by using AI as a tool.

Generated tunes

While completing a Ph.D. in computer science at the University of Waterloo in Ontario, Ackerman decided to take opera lessons for fun. Within a year, she was singing semi-professionally and soon developed a strong desire to write her own music.

But creating a song didn’t come easily. “I was kind of permanently stuck in this very narrow creative space,” Ackerman says. So, she learned to produce and record other people’s music.

Then in 2015, as a professor of computer science at Florida State University, she discovered the field of computational creativity—the intersection of artificial intelligence, cognitive psychology, philosophy and the arts.

“I realized I could build tools, using these concepts of generative AI, that would help me with very specific songwriting challenges I was facing,” she says.

So, Ackerman created WaveAI, a music platform that currently hosts two systems: LyricStudio and MelodyStudio.

LyricStudio is used by millions of artists and creators, 15% of whom are professionals. The system guides users through the songwriting process by

learning the user’s emotions and style and then offering suggestions for lyrics. Ackerman uses it nearly every day, and she notes that the artist drives the system.

MelodyStudio appeared on WaveAI in early February and resembles LyricStudio but instead guides artists through the process of writing melodies. AI doesn’t write songs in their entirety. It serves only as a creative tool to help musicians get out of writer’s block, Ackerman says.

One example is American hip-hop recording artist and producer Curtiss King, who had a No. 1 iTunes hip-hop album made in collaboration with LyricStudio.

“I was struggling with writer’s block,” King says. “I’m a purist when it comes to my writing process, but it was interesting because LyricStudio would give me certain prompts that I wouldn’t have thought of.”

He used the platform to spark new ideas for verses and help come up with rhymes. But LyricStudio wasn’t his first AI tool. He had previously used one that generates beats and chord progressions.

Like many of his peers, King was skeptical at first, but he wanted something that could assist in his musical process—not replace it.

Since discovering LyricStudio, King has used many different platforms, including ChatGPT and DALL-E. As an independent, DIY artist, he says AI acts as his unofficial employee.

But AI could also have a dark side for working musicians and other artists.

Replacement theory

The programs that help create music could also push songwriters aside. The recording industry would be “happy to get rid of human authors,” says Daniel Gervais, a professor at Vanderbilt University Law School. If labels have the chance to produce music for free and not have to pay royalties, they’ll do it, he notes.

But Ackerman provides the counterpoint that users should adapt to the systems and understand they’re strictly for creative possibilities. “You are the star and it’s the helper,” she says. “It’s flipping the paradigm, which is opposite of how AI is often described to us.”

But many creatives aren’t convinced AI is on their side, and they’re resorting to legal action to protect their interests.

Getty Images, a British-American visual media company, has initiated legal proceedings in London against Stability AI, saying the company has infringed upon its copyright for “millions of images.”

Separately, three visual artists have filed a class-action lawsuit in U.S. federal court against Stability AI, DeviantArt and MidJourney. The

THE VIDEOS KIDS MAKE ON THEIR CELLPHONES ARE ABOUT TO GET COOLER WITH THE HELP OF AI.

plaintiffs claim the companies violated copyright law by using their images to train AI.

A Stability AI spokesperson has been quoted as saying “anyone that believes that this isn’t fair use does not understand the technology and misunderstands the law.”

Fair use creates exceptions to copyright for purposes “such as criticism, comment, news reporting, teaching and research,” says Daliah Saper, a trademark, copyright and media attorney in Chicago.

Whether or not it’s legal depends upon how much is used and what effect that has on the underlying work, she says.

“If you look at what is protected by copyright, the Supreme Court says that the work produced must be the result of creative choices,” Gervais says. “I don’t think a machine can be creative, at least not in the way that a human can be creative.”

The overarching question is who owns the work? The current cases are interesting, Saper says, because the platforms must pull from existing sources to create the new artificial work.

“Should the underlying artist be in a position

to authorize that database from extracting or being inspired by or using their work?” Saper says. “There’s no definitive answer.”

During an earnings conference call in early February, Warner Music Group (WMG) CEO Robert Kyncl addressed AI and copyrights.

“It falls into four buckets,” Kyncl said. That includes using copyrighted material to train AI, sampling copyrighted material for new and remixed AI content, using AI to support creativity, and protecting the work of artists and songwriters from

being diluted or replaced by AI-generated content. Kyncl notes that Warner identifies and tracks content on consumption platforms to identify copyright and compensate copyright holders.

But what’s the fallout from the legal activity? If the companies involved in lawsuits are found guilty, Saper says it will be the end of them and their current models.

“The outcome is going to have to be licensing,” she continues. “The software technology is going to have to license the database of content from those companies that are aggregating the content, just like music used to be.”

In a February op-ed on the website Music Business Worldwide, Michael Nash, executive vice president and chief digital officer for Universal Music Group, notes the similarities between AI’s rise and the ascent of Napster and unlicensed music sharing more than 20 years ago.

“At that time, it was copyright law that saved the day, ensuring that artists and labels were protected,” he says.

The Supreme Court doesn’t hear fair use cases often but is currently sitting on an opinion from proceedings in October, which Gervais says may redefine fair use as early as this spring.

No matter what shape that decision takes, AI tools aren’t going away. So, artists may want to prepare.

For King, that means realizing it’s too late to worry about the existence of AI. Instead, it’s vital to keep a cautious eye on the technology to ensure it aligns with society’s ethics.

Gervais agrees. “What made us special on this planet as a species is we can do this so-called higher mental faculties stuff that no other species could,” he says. “Now we are creating machines that compete with us there.”

“From what we’re seeing, [AI] is enhancing, not replacing, creativity. But eventually, yeah, looking forward to 100 years from now, it could do the whole creative job.”

–OpenAI CEO Sam Altman, during an interview for Greylock’s Greymatter podcast

THERE’S A HOLLOWNESS TO AI-GENERATED ART.

This landscape by Erin Hanson exemplifies a style called open impressionism that she helped originate.

PHOTOS: COURTESY OF ERIN HANSON

Artist and gallery owner Erin Hanson is campaigning to protect artwork from the encroachment of AI.

THREE AI STOCKS TO _WATCH

AS HEAVYWEIGHTS Google and Microsoft duke it out over AI, upstarts like C3.ai enjoy natural advantages

Don’t always go with the big names. When it comes to investing in artificial intelligence, legacy players like Microsoft (MSFT) and Google’s parent company, Alphabet (GOOGL), might not offer the top returns because they devote only a small portion of their portfolios to the sector. Some cryptocurrency AI projects, like Fetch.ai (FET) and The Graph (GRT), have strong management teams and seem ready to focus long-term on decentralized intelligence and Web3 protocols.

Despite its lofty valuation, NVIDIA (NVDA) will likely continue to outperform in positive

momentum conditions. The company manufactures next-generation semiconductors to power artificial intelligence, self-driving vehicles and the future of the metaverse. C3.ai (AI) will continue to concentrate on enterprise-scale AI applications through software-as-a-service.

But Luckbox remains confident in our top stock prediction in December’s annual forecasting issue. We anticipated Palantir (PLTR) would continue its turnaround effort, and since then the company has turned a profit, accelerated its autonomous decision-making and increased its quarterly revenues by 18% year-over-year.

Palantir’s Edge AI succeeds in low-power

C3.ai : Cheaper AI Than You’d Think

C3.ai (AI) has soared on the hype surrounding any business related to AI.

But the enterprise AI software company traded down to irrational levels to end 2022 because of weak short-term results from a switch in the pricing model.

Even after the big rally, the stock trades at just 4.5x the expected value of 2024 sales targets.

Wise investors dumped C3.ai stock on the recent rally from under $10 to over $30 in just over a month. We remain bullish on the company, which is trading at a major discount because of the painful transition to a payas-you-go consumption model.

The good news is C3.ai is a “pick and shovel” software developer of the generative AI chat competition ongoing with

and low-bandwidth conditions that occur with drones, turbines and manufacturing systems. At press time, shares in Palantir had increased 55% this year, and analysts continue to raise estimates. Raymond James set a 12-month target of $15 per share. With increased liquidity and greater adoption of higher-risk assets, Palantir could soar past that target in the year ahead.

For insight into the emerging battle between Google and Microsoft AI stocks to watch, Luckbox sought the wisdom of Seeking Alpha’s highly regarded analysts. Their comments appear on these two pages.

—Garrett Baldwin

Google and the OpenAI partnership with Microsoft. C3.ai gets to license the best features of the AI chat technology from both tech giants while hopefully avoiding the errors inherent in both products.

C3.ai is far cheaper than the market thinks because of the irrational value when the stock dipped to only $10. C3.ai tripled in a couple of months, but the valuation remains very appealing at around $20.

Investors looking to own the AI

stock may consider a starter position in the $20s and look to acquire more shares on any return to the previous trading range starting at $15. After all, C3.ai isn’t likely to report growth in the next couple of quarters, likely leading to dissatisfaction among investors holding the stock in the near term.

—Excerpted from a Stone Fox Capital contribution to a Seeking Alpha newsletter. Reprinted with permission from Seeking Alpha.

PHOTO: GETTY IMAGES

Google vs. Microsoft — one has triple the potential returns

ChatGPT has become the fastest-growing internet application in history, kicking off a cycle of AI hype that has driven some investors out of their minds.

Microsoft is spending a lot on AI, but Google is spending far more and may sink as much as $300 billion into improving its AI tech through 2028.

Both Google and Microsoft are likely AI champions of the future that will use the technology to cement their strong positions in cloud computing.

But one of these tech titans has superior valuation, a faster long-term growth rate and a projected 24% annual return potential over the next three years. It’s clearly the better buy.

Despite Google’s shaky launch of its AI chatbot Bard, the AI hype cycle has created an opportunity for Google even as the onset of high-profile competition threatens the tech giant’s prestige as the leader in the industry, says Wells Fargo analyst Brian Fitzgerald.

Google has a tech lead in conversational AI and any notion they’re playing catch-up is “naive,” Fitzgerald says.

The Watson-like Bing AI

Some think Microsoft’s decision to integrate OpenAI’s product into Bing is game-changing or even world-changing—like the introduction of the iPhone.

IBM’s former CEO, Ginni Rometty, hailed Watson as a world-changing “moon shot” that would diagnose cancer, forever alter established industries and even create new industries.

For 30 years, IBM has prided itself

on generating more patents than any other U.S. company. But stockholders haven’t benefitted from those much-hyped patents or from Watson.

In the limited time since ChatGPT has taken the world by storm, there’s zero evidence AI is going to move the needle for Microsoft.

Clearly, the better buy Google is generating higher free cash flow than Microsoft. It’s growing faster and spending more on R&D that literally could change the world.

Google’s growth is similar to Microsoft’s except in free cash flow, where it’s expected to deliver Buffett-like growth of 18% annually through 2028.

Historically, Google is worth about 26X earnings and today trades at 18.3 but just 10.8X cash-adjusted earnings.

• 0.74 cash-adjusted price-toearnings growth (PEG) ratio

• Secure growth at a wonderful price

Microsoft is historically worth 26X earnings in the Nadella cloud computing era and today trades at pretty much fair value and a cash-adjusted PE of 18.2.

Two long-term champs

The near-hysteria over AI that has rocked the nation for the last few months seems sure to disappoint speculators who think they can get rich quickly with this exciting new technology.

Don’t get us wrong; AI is the future. It promises to revolutionize pro-

ductivity, automation, data analysis, drug development and just about every other industry on Earth.

But as fun and impressive as ChatGPT can be, Bing will not take the search crown from Google. The data is clear. Bing has NOT been gaining market share even after Microsoft paid $10 billion for a splashy headline about its latest investment in OpenAI.

• An investment that will likely pay off at some point in the future

• Though largely because Microsoft will incorporate the technology into cloud computing, not search.

But for new money today, the better buy is clear; Google is a smart way to play the recent AI hype with a strong margin of safety.

The two companies offer similar long-term return potential. Google’s prodigious free cash flow, expected to grow nearly 20% annually through 2028, will eventually make it one of the best dividend growth blue chips of the future.

—Reprinted from Dividend Sensei, a Seeking Alpha Marketplace newsletter. Edited for brevity and republished with permission from Seeking Alpha.

Data courtesy of (Fundamentals tab)

trends

DIVERSIONS

Billionaire Bunkers

Do the ultra-rich know something we don’t? Why are they bracing for the apocalypse?

By Navpreet Dhillon

PHOTO: OPPIDUM

The super affluent are prepping for doomsday, but they’re not about to settle for the spartan fallout shelters of the mid-20th century. Instead, members of today’s 1% opt for luxury bunkers with plenty of amenities.

Companies catering to the market for opulent refuge include Oppidum, Survival Condo and Vivos Global Shelter Network— all privately held. Their offerings begin at $1.2 million and climb upward to $80 million.

But whatever the cost, who can blame the wellheeled for seeking safety?

It’s no longer just the fear the USSR might drop the bomb. These days, survivalists are also motivated by the specters of civil unrest, weaponized diseases, environmental disasters and malevolent artificial intelligence.

Surviving the apocalypse

Some of today’s luxury shelters seem more like villages than retreats. Survival Condo and Vivos, for example, have built communities of shelters that could house hundreds of wealthy refugees from disaster.

“Real doomsday preppers—the ones who

researched the field in a legitimate way and think about it—the main thing they’re concerned about is the resiliency of their community,” says Douglas Rushkoff, author of Survival of the Richest: Escape Fantasies of the Tech Billionaires. “They understand that surviving alone is kind of preposterous.”

In 2018, Rushkoff met with five ultra-rich survivalists—three hedge fund managers, one tech entrepreneur and one banking executive. He described their fears and their escape plans in The Guardian, a British newspaper, and the eightpage article became the first chapter of Survival of the Richest, which was published in September 2022.

Rushkoff separates regular billionaires (if there is such a thing) from tech billionaires. He calls the plans of regular billionaires “strident individualism.” Their bunkers “are just excuses to build the thing that they wanted to build all along, which was a private island retreat away from everybody to disconnect from civilization,” he says.

They differ from tech billionaires, who want to “create a perfectly insulated womb bubble where all their needs will be taken care of,

Bunker Billionaires

Sam Altman CEO, OpenAI

Jeff Bezos

CEO, Amazon

Larry Ellison

Co-founder of Oracle

Bill Gates

Co-founder of Microsoft

Steve Huffman

Co-founder of Reddit

Kim Kardashian

Founder of Skims, KKW Beauty

Elon Musk

CEO of Tesla, SpaceX, Twitter

Peter Thiel

Co-founder of PayPal, Palantir Technologies

The Walton Family Founders of Walmart

Mark Zuckerberg

CEO, Facebook

and they’ll have no existential risks whatsoever,” says Rushkoff. Think Mark Zuckerberg’s Metaverse and Sam Altman’s AI, where they hope to upload our minds so we can live forever, sans body.

Profit of doom?

So, who’s spreading the word about doomsday in Silicon Valley? The culprit may be Peter Thiel, co-founder of PayPal and Palantir Technologies, and the first external investor in Facebook. Everyone he touches, including

The rich are seeking shelter from pandemics, civil unrest, environmental disaster and malevolent AI.

The floor plans of Vivos underground luxury disaster shelters in South Dakota (above) lack almost nothing. The refuges offer high ceilings, subtle lighting and tasteful high-end appointments (right).

Zuckerberg, Altman, Jeff Bezos and Elon Musk, has taken extreme measures to prepare for doomsday.

Thiel notably owns a property in New Zealand that doubles as a bunker and escape route in case of catastrophe.

In an interview with The New Yorker, Altman explains he has “guns, gold, potassium iodide, antibiotics, batteries, water, gas masks from the Israeli Defense Force and a big patch of land in Big Sur [he] can fly to.”

While California’s droughts, mudslides, earthquakes and mass shootings might make it seem a less attractive survival milieu than New Zealand, it’s the thought that counts.

“Sam Altman feels more like the frightened child than these others,” Rushkoff says of the tech billionaires. “I wouldn’t say that these ideas originated with Thiel, but I think that he’s one of the great influencers.”

Thiel gets some help from Steve Bannon, former chief strategist for President Trump, with Bannon’s discussions of survivalism on his War Room podcast.

But bunkers got a really significant boost from 9/11, says Larry Hall, founder of Survival

200,000

THE NUMBER OF FALLOUT SHELTERS AMERICAN FAMILIES BUILT IN THE 1950S AND EARLY 1960S

Bunker Billionaire Bugaboos

Top motivations of bunker buyers:

n Nanotechnology (grey goo)

n Sentient & malicious AI

n Infrastructure & grid attacks

n Asteroids, solar flare & aliens

n Disease & pandemics

n Environmental disaster

n Economic collapse

n Civil unrest & civil war

n Nuclear holocaust

Condo. He saw a market for bunkers, thanks in part to his master’s degree in computer engineering, experience as defense contractor and time as owner of an internet company.

Later, Trump’s presidency and COVID19 spawned another round of attention for bunkers, Hall notes.

Rushkoff agrees: “It was the election of Trump that triggered panic among the tech bros. Kids like Tristan Harris suddenly said, ‘Oh, my God, I think all this social media that we created and all of these terrible, psychologically manipulative platforms are bad.’”

Meanwhile, the market changed from the paranoid to “those in the know,” according to Hall.

“The more money you have, the closer you are to the decision makers and politicians,” he observes, “because a lot of our people seem to be pretty well-connected.”

Bunkering down Hall describes his clientele as “self-made, successful, Type-A people.” And, of course, they have enough money to pay at least $1.2 million cash.

Similarly, Dante Vicino of Vivos, says members “are not ‘afraid,’ but rather aware and well-informed ... of threats we all face.”

And there may be plenty of them. Vivos has locations in Indiana, South Dakota and Germany, and co-ownerships across America.

Survival Condo owns two locations in Kansas. Its first Kansas operation, a previous missile silo, has 12 floors for up to 75 occupants, and its second will have 24 floors and may hold 150 shelter seekers.

Vivos bunkers range in price from $45,000 to $8.5 million, and the company’s underground complexes in South Dakota can hold 10,000 survivalists.

But that term “survivalist” barely applies. These shelters aren’t for camo-clad hunters who fancy firearms, collect knives and stockpile canned goods.

Instead, Survival Condo features a 75-foot pool, 24-foot climbing wall, 17-seat movie theater, classroom, bar, gym, arcade and pet park. The rooms come with “windows” that are really LED screens displaying images like a forest or the New York skyline. But most clients prefer to devote the screens to a livestream of what’s going on outside.

Hall’s condos were tested during the pandemic, when clients and their families stayed there to quarantine. But no one

No matter what we do to Earth, it will probably always be more hospitable than Mars.

A faux tropical lagoon adds a touch of luxury to the amenitypacked quarters that Survival Condo constructed in a Kansas missile silo.

Patria

Modest gold watches made with superior manufacturing skill, have a centuries-old tradition in Germany. After Glashutte‘s new rise, the watchmakers and their fine watches were able to attain a world-renowned reputation once again.

With the Patria, we keep Glashutte’s deep-rooted horological tradition alive: the watch must be noble, beautiful, and precise.

Patria · manufacture caliber · 6600-01

should view the spaces as vacation spots, he says.

Hall has worked with a psychologist who studied Biosphere 2, an experiment where “explorers” lived in a massive bubble in Arizona. The upshot is survivalists need four hours of work each day, and children require four hours of school daily. His approach focuses on communal survival, with prices starting at $1.2 million for a half-floor unit.

Continuity of government

The ultra-rich aren’t alone in their doomsday fears. Branches of the federal government maintain plans that include “procedures for alerting, notifying, locating and recalling key members of the government.”

The government also operates Cold War bunkers all over the country, according to Garrett Graff’s book, Raven Rock: The Story

government officials, not the general population.

One such federal bunker, Raven Rock Mountain Complex in Pennsylvania, can accommodate 5,000 officials and other civilians in an underground pseudo-city. It has multistory buildings, a fire department, police station, dining halls and medical facilities.

While elaborate, Raven Rock and other federal bunkers would not come close to holding the nation’s population. In contrast, since the 1960s, Switzerland has had enough nuclear bunkers to handle the entire population.

At any rate, the existence of Plan D-Minus suggests preppers may have good reason to fear the apocalypse.

And they might as well prepare for disaster in style.

Self-interest

Oppidum (Prague)

n Indoor pool

n Movie theater

n Full-light spectrum simulation ceiling

n Wine cellar

n Garden

n Sauna

n Gym

n Bio-secured entrance

n Bank vault

n Art gallery

n Car showroom

thick concrete walls, the Oppidum bunkers may feel a bit exposed to the outside world of air strikes and pandemics.

of the U.S. Government’s Secret Plan to Save Itself—While the Rest of Us Die

Those federal bunkers, most of them created in the 1940s, were retrofitted after the 9/11 attacks and serve as safe houses in case of a national emergency.

In 1959, the government privately released an emergency preparedness document known as Federal Emergency Plan D-Minus. It was declassified in 1996.

Authors of the plan estimated 48 million citizens would die in a nuclear attack by Russia, then known as the Soviet Union. Survivors would suffer shortages of food and water, and travel would become extremely difficult.

The bunkers, though, were meant for

Oppidum, the ultra-luxury bunker builder based in Prague, fits the bunker to a client’s home. Their offerings begin at $8 million and go up to $80 million and include art galleries, showcase car garages, meeting rooms, indoor pools and wine cellars. They can even provide servant quarters.

$80 Million

COST OF A HIGH-END SURVIVAL SHELTER

Instead, Oppidum bunkers have flashy décor by renowned designers Adam Slabý and Marc Prigent. With three plans to choose from—L’Heritage, Linear and Futurist—clients can choose features, pick the number of bedrooms and assign the square footage.

The bunkers from Oppidum add value to a home and the owners can use them as everyday assets as opposed to solely providing escape from disasters, says Tomas Grmela, the company’s head of communications.

The company caters to clients who want something akin to a safe room where they can also entertain guests when disaster’s not imminent. Their bunkers feature CBRN (chemical, biological, radiological and nuclear) filters and two diesel generators. Options include solar panels and wind generators.

However, compared to Survival Condo, which is 24 feet below ground and has 9-foot-

Similar to Survival Condo, though, Oppidum features simulation screens that mirror the outside world. The screens act as an atrium window that mimics the sun’s patterns and seasonal changes.

Despite their luxuries, all of these bunkers remain earthbound, which seems fine to Rushkoff. He considers uploading the mind to a database and escaping to Mars the most absurd of survivalist options.

“No matter what bad thing we do to the Earth, it will probably always be more hospitable than Mars,” he says. “Fringe ideas can become mainstream, and that’s the brittleness we’re contending with now.”

Survival bunkers provide an excuse for the rich to build what they really want—a retreat on a private island.

From the pool table to the bar, Oppidum’s disaster shelters of the rich and famous offer plenty of distraction from whatever’s happening outside.

The Luckbox AI Resource Guide

By Anam Vaziri

The first modern AI platform, Deep Dream Generator, was released in 2015 to create images from a text prompt. These days, more than 1,900 AI platforms perform at least 500 functions.

These are a few of our favorites.

Search

Wolfram Alpha

WolframAlpha answers questions like an expert, thanks to breakthrough technology in science, culture and mathematics, the manufacturer says. The platform uses its own algorithms, knowledge base and AI technology.

$5/month, no waiting list, wolframalpha.com

Perplexity

Need accurate answers to complex questions? Perplexity AI is powered by large language models and search engines to create an “ask anything” portal.

Free, no waiting list, perplexity.ai

Content

Jasper

Jasper streamlines workflow by helping to create original copy and art for you and your team. It specializes in blog posts, SEO integration and marketing copy.

$82/month, no waiting list, jasper.ai

Midjourney

Describe something in words, and Midjourney uses the text to create an image. The maker claims it expands the human imagination.

$10/month, no waiting list, midjourney.com

AI Detection

GPTZero

Detect plagiarism by typing in content you suspect was written with AI.

Free, no waiting list, gptzero.me

Entertainment

My90sTV

Go back to the 1990s with this TV simulator! You’ll relive the original ads, films, shows, videos and trailers.

Free, no waiting list, my90stv.com

Avatars

Replika

Music

Boomy

Within seconds, Boomy uses AI to write original songs in any genre. Upload your audio or lyrics, and the platform incorporates them into a track you can post on any streaming platform and get paid when people listen.

Free, no waiting list, boomy.com

Think of Replika as a 24/7 AI companion. The more you talk to your humanlike Replika, the smarter it becomes. It’s always cheerful and excited to talk about anything you want.

Free, no waiting list, replika.ai

DeepBrain

DeepBrain creates avatars to help you generate realistic AI videos quickly and efficiently. It saves time in video preparation, casting and editing.

$29/month, no waiting list, deepbrain.io

Writing Assistant

TryEllie

TryEllie, your own AI-powered personal email assistant, learns your writing style and replies to your emails. It’s as though you wrote the responses yourself.

$29/month, no waiting list, tryellie.com

NotionAI

NotionAI, a personal writing assistant, can edit, brainstorm, save time and elevate your writing. Free basic subscription, waiting list, notion.so

New AI Platforms by Year

PUTTING CHATGPT TO WORK

ChatGPT attracted 100 million monthly active users in January, just two months after launch, making it the fastest-growing consumer application in history. Here are some things it can do:

> Answer questions or explain concepts

> Serve as an alternative to Google search

> Compose emails

> Act as a virtual writing assistant

> Create recipes and diet plans

> Translate between languages

> Summarize long-form text

> Write stories, essays, jokes, song lyrics or poetry

For the best results from ChatGPT (chat.openai.com) queries, use these prompt optimizers:

Superhuman

Designed to be the “fastest email experience ever made,” Superhuman uses AI to create advanced features that are blazingly fast, and will rebuild your inbox and email writing experience.

$30/month, no waiting list, superhuman.com

Legal Advice

DoNotPay

The world’s first robot lawyer was created by DoNotPay. It employs artificial intelligence to fight corporations, beat parking tickets and appeal bank fees. You can even press a button to file a lawsuit.

$36/3 months, no waiting list, donotpay.com

Excel Sheet+

Sheet+ eliminates the need for formula writing in Excel by having AI do the work for you. Enter a text description, and this app automatically creates output for any Excel or Google Sheets formulas.

$2.99/month, no waiting list, sheetplus.ai

App Creation Cookup

Don’t know how to code but want to create ChatGPT apps? Cookup can track down an AI app for any use. You can also type a prompt and it will build an app. Free, no waiting list, cookup.ai

Community HuggingFace

HuggingFace is an AI community on a mission to make good machine learning accessible. It creates, discovers and collaborates by using audio, vision and language. $9/month, no waiting list, huggingface.co

> Topic/Purpose: Define the task and goal

> Tone: Suggest a specific style, tone or voice

> Target audience: Describe the listeners, viewers or readers

> Wordcount: Specify the desired length

> Call to action: Explain what you want the audience to do or achieve

Now, let’s examine a prompt and the chatbot’s response. First, the prompt:

Please compose a witty thank you email in the sarcastic, comedic writing style of comedian Larry David to my neighbor Tom as a thank you for watching my house while I was on vacation in Mexico even though he killed my philodendron.

ChatGPT responds three seconds later ...

Dear Tom,

I want to thank you from the bottom of my heart—kind of like how my philodendron was buried six feet under after you watched my house while I was away in Mexico. And a special thanks for taking care of my philodendron. Although, I’m sorry to hear you had to “put him to sleep.”

I guess it’s just one of those things. But hey, at least you got to enjoy a couple days of free vacation in my house while I was away. Thanks again!

Play Poker Like a Robot

Bet or check with a mix of good and bad hands to keep opponents guessing

By Jonathan Little

Win at poker by learning to play more like a robot.

In other words, you can develop robust poker strategies by betting or checking on a mixture of strong hands and weak hands. That forces opponents to play a guessing game, and if you structure your ranges intelligently, you’ll be hard to beat.

It’s what the best AI programs and GTO (game theory optimal) solvers do, and it’s what the best poker players in the world try to replicate.

Suppose when playing 40 big blinds (bb) deep you raise to 2bbs first to act at a 6-handed table with the GTO range of 2-2+ (“2-2+” means a pair of twos, or any higher pair), A-2s+, A-9o+, K-5s+, K-10o+, Q-8s+, Q-10o+, J-8s+, J-10o, 10-7s+, 9-7s+, 8-6s+, 7-6s, 6-5s and 5-4s.

much more often to bet a hand like 3-3 using a large size (as seen in the chart on p. 45) compared to a similar hand like 5-5.

So, here are some broad rules to help determine which size to use when you’re in position and checked to on a flop that heavily favors your range:

Extremely strong hands that are unlikely to get outdrawn (A-A, 6-6, A-7) should usually use a small size.

Hands that are almost always best but are vulnerable to being outdrawn (A-Q, A-10) should usually use a large size.

Hands that could be good but could also be behind (A-2s, K-K, 8-7s) should usually use a small size.

Only the big blind calls. The flop comes As-7h-6d and the big blind checks. This is a flop that heavily favors the initial raiser, allowing you to bet every time.

It may seem like that strategy would be easy to implement, but you have to figure out which size to use and when to use it.

The chart on this page shows how the GTO solver plays this situation: The hands in dark red bet the size of the pot, the hands in light red bet 25% of the pot and the hands in gray are not in the range because they folded preflop.

It’s difficult for humans to know to bet A-Ko and A-Jo using a pot-sized bet roughly 67% of the time, while A-Qo bets using a pot-sized bet most of the time. It’s also difficult to know how

Draws that will continue if raised (9-8s, 5-4s) should usually use a small size.

Draws that will fold if raised (Q-Js, J-10s) should usually use a large size.

After you use a specific bet size on the flop, all hands that are not bet using that size are no longer in your range. Suppose you bet 25% pot and the big blind calls. The turn is the (As-7h6d)-5c and the big blind checks.

This turn is bad for your range because the big blind will have improved to many two-pair and better hands. Also, the big blind would have folded their weak hands to your small flop bet, whereas you still have all the weak hands in your range because you bet with everything on the flop.

This forces you to check much of the time with your strong polarized betting range (best hands and draws) usually using a large size: You bet the turn and the big blind calls. The river is the (As-7h-6d-5c)-4s and the big blind checks. Even though all your 8s improved to a straight, many of your made hands on the turn have been substantially downgraded because it is easy for the big blind to have an 8 or two-pair. Your river strategy is to go all-in for a bit more than the size of the pot with your straights and some sets as well as some of your hands that cannot win at the showdown. However, you cannot bluff with all your

If opponents rarely or never bluff all-in, fold all your bluff catchers.

Play as close to GTO (game theory optimal) as possible.

hands that lose at the showdown because you would be bluffing far too often.

To determine how often you can bluff on the river when your range is polarized (effective nuts or nothing), figure out the pot odds your opponent will be getting and then structure your range such that your opponent is indifferent to calling.

Your opponent has to call 27.4bbs to win a pot of 81.5bbs (the pot going to the river plus your bet and their call) meaning they need to have the best hand 33.6% of the time to call.

Structure your betting range so that it contains roughly 33.6% bluffs (assuming your value bets win every time when called, which may or may not be the case).

In this spot, your all-in range should be 12.8 combinations of straights, .9 combinations of sets and 6.6 combinations of bluffs.

Your all-in value range contains 13.7 combinations of hands and your bluffing range contains 6.6 combinations of hands. 6.6/(13.7 + 6.6) = 32.5%. That means when your opponent calls with their bluff catchers (almost all of their range), they will win 32.5% of the time, which is close to the pot odds they are being offered, making them indifferent.

When the GTO strategy takes a line where

GTO River Betting Strategy

straight 12.8 combos 62.4% set 0.9 combos 4.6% two pair 0 combos 0.0% top pair 0 combos 0.1%

underpair 0 combos 0.0%

2nd pair 0 combos 0.1%

3rd pair 0 combos 0.0% low pair 0 combos 0.1%

king high 1.8 combos 9.0% nothing 4.8 combos 23.7%

it bets the flop, turn and river, it pretty much always bluffs using a large size with a polarized range with the bluffs making up the percentage of your range that will make your opponent indifferent based on the pot odds.

Even though implementing GTO strategies is close-to-impossible for humans, live poker cash games and tournaments are still highly profitable in 2023.

The real money in poker is made when you get out of line in order to massively exploit the mistakes your opponents make.

If you know your opponent goes all-in in the above river situation with all their bluffs instead of only some of them, your adjustment is to call with all your bluff catchers. If they rarely or never bluff all-in, fold all your bluff catchers.

If you pay attention to the strategies each opponent uses that are far from the GTO strategy, you can make logical adjustments that will enable you to exploit them and win a ton of money.

Looking for a more detailed guide to game theory optimal poker play? See the QR code More GTO.

Game theory optimal

(GTO) poker strategy is a style of play in which players seek complete balance to protect themselves from exploitation by their opponents. This strategy is the opposite of exploitative poker, which focuses on finding weaknesses in other players. While GTO poker has been proven successful in heads-up poker, it can also be applied to other poker games.

This style of play involves bluffing and value betting on every street of every hand with a balanced range.

Jonathan Little, a professional poker player and WPT Player of the Year, has amassed more than $7 million in live tournament winnings, written 14 best-selling books and teaches at PokerCoaching.com. @jonathanlittle

More GTO Complete guide to GTO poker

Post-punk Band Shame Serves up Food for Worms

This English post-punk band expresses a new sense of maturity and reinvention on an album recorded live in the studio. If you like Lou Reed’s experimental rock, you’ll like these guys.

By Kendall Polidori

The third studio album from shame—Food for Worms, out Feb. 24—comes across like a declaration of maturity. The bandmates have grown up together, crossing the finish line of adolescence and learning what it’s like to come out on the other side of inward thinking.

If their past records took listeners on a trek through the band members’ inner experiences, the new recording looks outward toward their relationships with the people around them.

While taking a post-punk approach, shame allow themselves to feel every emotion— happiness, confusion, passion, humor—not just anger. Like one of their musical inspirations, Lou Reed, shame explores the complexity in their lives and the world around them, talk-singing their way through each song. Their vocal style brings to mind the likes of British rock bands IDLES and Yard Act. All have their own approach to their vocal display, but all have a sprinkle of British, or perhaps cockney, accent. Lead singer Charlie Steen’s voice isn’t necessarily good, but it’s not trying to be. This album also uses more backup vocals from other band members.

The first single from the album, Fingers of Steel, is the ideal introduc-

The Beatles, Stones and Zeppelin were awesome —but rock lives on. Why not break out of the classic rock cocoon and give new rock a chance? Rockhound is here to help. Think of it as a bridge from 1967 to today and beyond.

tion—it opens with a light piano section, and then the band’s three guitarists dive in full force with amplified precision. They ditch polished studio recordings for live ones and deliver variation in instrumental layers, which wasn’t as evident in previous recordings. Fingers of Steel, their most popular single from the album on Spotify, recounts the frustrations of trying to help a friend who must figure out the ropes on their own.

In a recent interview, Steen explained shame’s vision like this: “I don’t think you can be in your head forever. It’s weird, isn’t it? Popular music is always about love, heartbreak or yourself. There isn’t much about your mates.”

Recorded live, Food for Worms, is less polished than their 2018 Songs of Praise and 2021 Drunk Tank Pink—but in a good way. It’s not an album for casual listening. It beckons listeners to get amped up and do something, like dance around the kitchen.

The band doesn’t pretend they’re the first to make a name for themselves in post-punk. They know it’s been done before, but so has every variation of any genre. They’re creating music for themselves, not chaining themselves to certain instruments, which is what makes it so appealing. The sound doesn’t force itself down listeners throats—it flows with ease.

In songs like Six-Pack, shame explores rapid transitions that make the listener assume the song ends and moves on to the next. While experimenting with layered guitars and bass, the band brings

PHOTO: COURTESY OF SHAME

Food for Worms, shame’s third studio album, was released on Feb. 24.

More shame

Food for Worms

in groovy wah pedals that let each chord stand on its own. They’re post-punk with a psychedelic, funky guitar/bass flair.

Food for Worms begs fans to listen front to back, ditching the idea of focusing on one song at a time. You never quite know when one song ends and the next begins. It’s the recipe for a smooth, close-knit set of songs. The band understands the power of silence, too, by isolating some instruments and letting others fade to a hum when the timing is right.

The catchiest song on the album, Adderall , will have you singing along during your first listen. And to bring the album full circle, kicker All the People highlights Food for Worms’ purpose: To acknowledge

the people around you, take them in with compassion and accept that you can’t change them.

All the people you’re gonna meet / Don’t you throw it all away / Because you can’t love yourself

Hearing it live, it’s one of those songs that makes you want to throw your arm around the shoulder of the stranger standing next to you and head-bang it out together.

START WITH

shame’s song Six-Pack, and you might get hooked right away on the wah pedal guitar intro.

PAY ATTENTION TO

how the tempo slows at the 2:10 mark. If you’re listening casually with headphones, you might think it’s the transition into a new song.

Kendall Polidori is The Rockhound, Luckbox’s resident rock critic. Follow her reviews on Instagram and Twitter. @rockhoundlb

FOOD FOR WORMS TRACK LIST

n Fingers of Steel

n Six-Pack

n Yankees

n Alibis

n Adderall

n Orchid

n The Fall of Paul

n Burning by Design

n Different Person

n All the People

Canada tour for

PHOTO: POONEH GHANA

Hockey Sticks

Visualize the possible gain or loss from any options trade

Simple graphical representations called hockey sticks show the potential profit and loss of any options trade. The name comes from the shape.

Imagery aside, keep in mind that options have a limited lifespan and expiration date. Volatility and time until expiration can change the pricing and profit or loss before expiration. The horizontal axis shows the potential stock price, while the vertical axis represents profit and loss. Remember that options control 100 shares, so options prices can be shown per share or per 100 shares.

Consider a few simple examples of how investors might use options to create a bullish position in Alphabet (GOOGL).

Long call

Investors hoping for a large rally in a stock might purchase a call option with a strike price at, above or below the current price.

In the example with Alphabet trading around $93, consider the potential profit from purchasing a 95 call for $485 ($4.85 debit x 100 shares), which entitles the owner to purchase 100 shares at $95.

The hockey stick shows the strategy won’t make money (at expiration) unless the stock is above $99.85 ($95 + the $4.85 paid for the call), making it a low-probability trade.

Above that breakeven price, the long call makes $100 for each $1 rise in Alphabet. The maximum loss is the $485 cost of the option.

By James Blakeway

with the price around $93, the premium is $118 ($1.18 x 100 shares).

The strategy makes money as long as Alphabet stays above $87.82 ($89 – $1.18), where the green turns to red on the sloped line. The maximum loss for the trade would occur if the stock went to zero—a fairly unlikely scenario for Alphabet in one or two months.

Short put

The short put options strategy, using a strike below the current price, is a higher probability strategy but has a maximum profit of the sale price of the option. This is represented by the flat green portion of the hockey stick. Using the example of selling an 80 put in Alphabet

Short put spread

A hockey stick clearly shows the defined risk and defined profit of a short put spread. Consider the sale of the 90 put and the simultaneous purchase of the 85 put for Alphabet.

The spread is sold for $154 ($1.54 x 100 shares), which is the maximum profit. The maximum loss is the width of the spread minus the max profit [($5 – 1.54) x 100] = $346 loss.

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APRIL

On the green

Expect a full complement of spectators at the Masters. Attendance returned to capacity last year for the first time since 2019, with 40,000 fans per day. The traditional par-3 contest also returned. Tiger Woods is expected this year, and his five Masters victories are one shy of the record of six green jackets held by Jack Nicklaus.

Scottie Scheffler earned his first Masters victory in 2022 with a 10-under 278. Rory McIlroy placed second with a 7-under 281, and two golfers—Shane Lowry and Cameron Smith—tied for third with scores of 5-under 283.

Tax returns

Taxes are a headache. According to the IRS, the average American spends 11-13 hours preparing a federal income tax return, which includes six on recordkeeping and two on planning. Taxpayers who itemize deductions, make charitable contributions or have other complications can expect to spend even more time.

The IRS issues most refunds within 21 calendar days, but the waiting time has increased since the pandemic. The odds of being audited are typically below 1%, and in FY 2021 odds were 4.1 out of every 1,000 returns filed (0.41%).

In FY 2021, the IRS processed more than 261 million federal tax returns and supplemental documents, collected more than $4.1 trillion in gross taxes and issued 600.1 million refunds, amounting to more than $1.1 trillion.

April 18 may seem far away but it will be here much sooner than the majority of taxpayers seem to think.

Lennon’s lost weekend

John Lennon and Yoko Ono were separated for 18 months in 1973 and 1974, and that’s when he moved to LA and began a relationship with his then 22-year-old assistant, May Pang.

The two lived with Lennon’s son Julian, and Lennon often referred to that period as “the lost weekend.” But Pang maintains the phrase doesn’t do justice to their time together.

The film, The Lost Weekend: A Love Story, offers a fresh look at Lennon through the experience of Pang and Julian, during a moment when Lennon was having a career revival.

Indie reads

This year marks the 10th anniversary of Independent Bookstore Day, which celebrates indie bookstores across the U.S.

As of 2022, 2,023 independent bookstores were operating in 2,506 locations. The record low was in 2009, when only 1,401 bookstores were open for business in 1,651 spots.

Since Amazon came into being in 1995, the number of indie bookstores has decreased by 63.2%, and the number of locations has fallen by 64.2%.

Amazon accounts for more than half of the books sold in the U.S. and more than 65% of the books sold online.

trades&tactics

actionable trading ideas

BREAKOUT A CANDLESTICK ANALYST SHEDS LIGHT ON THE MARKETS

A Timely Ticker

By Stephen W. Bigalow

C3.ai (AI), an artificial intelligence software company, provides application development and creates a runtime environment that enables customers to design, develop and deploy enterprise AI applications.

It’s part of what several analysts view as the next major expanding industry, and it offers AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications.

The multiple uses benefit many business applications and can provide for great expansion of earnings. Annual sales are approximately $252 million, with upside expectations.

As illustrated by the fry pan bottom breakout on the candlestick chart, investors have recently become strongly interested in this area.

A classic fry pan bottom followed by a J-hook pattern indicates the next phase of interest. Trading up through the $27.50 level would confirm a classic pattern, making the next likely target, wave one equaling wave three, target the $42 level. Buy on any trading above $27.50 and place a stop back at the $26 level.

C3.ai’s

BUY above $27.50

STOP $26.00

Buy above $27.50

The Classic Pattern— A fry pan bottom followed by a J-hook pattern is a common price movement of human nature that produces high probability results.

Fry pan bottoms show a curving buildup of investor sentiment. The expected result is a strong price move upon a strong breakout, as illustrated with a gap up at the breakout area.

J-hook

16.03

Technology: Artificial intelligence software

Market Cap: $2.47 B

Employees: 574 (as of 2021)

(As of Feb. 22)

Beta versus SPX: 1.49

One-year total return: 2.08%

Analysts’ target (Avg.): $27.50

J-hooked on AI

recent price movements may lead to trading opportunity ahead.

Stephen W. Bigalow, a veteran of 45 years of trading, directs a candlestick analysis learning forum at candlestickforum.com.

C3 AI, Inc. (AI)

Wave 3 Wave 3

Wave 1

T-line

50-day SMA*

Fry pan bottom

200-day SMA*

Source:

Meet Stephen Bigalow (see p. 63)

CHERRY PICKS RIPE & JUICY TRADE IDEAS

Fundamental Intelligence

Getting smart about these AI stocks begins with an understanding of the basics

By Michael Rechenthin

Be smart picking stocks in the artificial intelligence sector by considering the fundamentals of 12 popular AI companies.

That’ll require reviewing market capitalization, implied volatility and price/ earnings (P/E) ratios.

Smaller companies—the ones with less than a few billion dollars in annual sales— carry the greatest risk. They lack brand or sector diversification, they have limited funding and they don’t have long lists of capabilities.

But small-capitalization AI stocks, such as SoundHound AI (SOUN), and BigBear.ai Holdings (BBAI), also offer the opportunity for the greatest appreciation of price.

It’s the old story of greater risk/greater reward.

Implied volatility might be a new phrase for non-options trades, but it’s calculated from the price of the stock options. The more “expensive” the insurance (options price), the greater its implied volatility.

Implied volatility is greater for smallercapitalization stocks, and that’s no coincidence. “They” are pricing the insurance (options price) higher because there’s a greater risk of movement.

Who are “they?” They’re the traders and investors using options to protect and speculate around the price of the stock. The more risk the investing and trading public believes the stock presents, the greater the cost of insurance for the stock.

Then there’s the price-to-earnings ratio (P/E ratio). It’s the most recent price divided by earnings per share. Many find it a useful tool for analyzing a company’s profitability,

especially in comparison to its peers.

The P/E figure can fluctuate from quarter to quarter but does give a high-level indication of profitability, especially in comparison to similar companies and stocks.

P/E is a popular measure, but it does have some flaws. Companies can be quite selective when it comes to boosting earnings per share. For example, they can increase earnings by cutting costs, which is generally favorable, but it’s not the same as suggesting the company is doing better because of an increase in customers. Instead, though, the company is doing better by controlling costs.

Another way of “manipulating” P/E is by buying back shares. Less stock in the marketplace means a greater share of money per share. That makes for a larger number at the bottom of the formula. P/E ratio will therefore be a smaller number.

Four stocks have negative P/E ratios, signaling recent losses. One of the greatest ways to increase a stock price is by creating a

profit—at least in the long run.

Exchanges have minimum requirements for being listed. They include having a market capitalization of a specific amount and having minimum share increments— generally around $5 a share.

If the stock goes beneath that level for too long, exchanges can have them removed. That’s not good for the stock.

This is risky territory right now for the smaller players. C3.ai (AI) has partnerships with Google, Amazon, Intel, Microsoft and Baker Hughes, among others. But the company has been bleeding cash and has never made a profit. For those reasons, potential buyers need to beware.

Right now, we’re attracted to the mostcapitalized players—Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN) and NVIDIA (NVDA).

Michael Rechenthin, Ph.D. (aka “Dr. Data”), is head of research and development at tastylive

THE TECHNICIAN A VETERAN TRADER TACKLES TECHNICALS

Artificial Intelligence Reveals Itself

By Tim Knight

Artificial intelligence (AI) is a rapidly growing field, and several companies and industries stand to benefit from its growth. Some of the stocks that are likely to benefit the most from growth in AI include companies specializing in:

• AI research and development, such as NVIDIA (NVDA), Intel (INTC) and Advanced Micro Devices (AMD).

• Cloud-based AI services, such as Amazon Web Services (AWS), Microsoft Azure (MSFT) and Google Cloud (GOOGL).

• AI-enabled products and services, such as Salesforce (CRM), NVIDIA and Alphabet (GOOGL).

• Data and analytics services such as Splunk (SPLK).

• Development and manufacture of autonomous vehicles, such as Tesla (TSLA), Waymo (Alphabet) and NVIDIA.

• Development of AI-enabled software and services, such as Cognizant (CTSH), Infosys (INFY) and Tata Consultancy Services

As with any new industry, especially one promised to grow to the trillions, there are no guarantees.

False starts

AI is a rapidly developing field, and over the years, there have been several false promises and overhyped claims made about its capabilities. Here are a few examples:

In the 1950s and 1960s, AI researchers predicted that machines would be able to perform any intellectual task that a human could within a decade or two. These predictions proved to be overly optimistic, as many of the challenges of AI remain unsolved to this day.

In the 1980s and 1990s, there were many

claims that AI-powered “expert systems” would revolutionize industries such as medicine and finance. While these systems did have some limited success, they ultimately failed to live up to the hype.

In the 2000s, there were predictions that AI-powered virtual personal assistants, such as Apple’s Siri, would be able to understand and respond to natural language commands. While these systems have improved over time, they still have significant limitations in their understanding and ability to respond to complex commands.

In the 2010s, there were predictions that AI-powered self-driving cars would be widely available within a few years. While self-driving cars are under development, they are not yet widely available, and the technology still has many challenges to overcome.

In recent years, there have been many claims about the ability of AI to achieve “human-like intelligence,” or “AGI.” While the field of AI is making rapid progress, experts agree that the development of human-like intelligence is still a long way off, if it’s even possible.

It’s important to note that these examples are not meant to discourage the development and advancements of AI, but rather to highlight the importance of being realistic about the capabilities and limitations of the technology.

Better decisions

Artificial intelligence can also be used in a variety of ways to help choose better investments in the stock market, such as with:

Predictive modeling: AI algorithms can be trained on historical stock market data to identify patterns and make predictions about future stock performance. This can help investors identify potential winners and losers in the market.

Portfolio optimization: AI algorithms can be used to analyze historical data on stock prices and returns, and to optimize the composition of a portfolio to maximize returns and minimize risk.

Sentiment analysis: AI can be used to analyze news articles, social media posts, and other sources of information to gauge public sentiment about a particular stock or market sector. This can help investors identify stocks that are gaining popularity or losing momentum. Algorithmic trading: AI-powered algorithms can be used to make trades automatically in response to market conditions and other signals. This can help investors take advantage of shortterm market movements and trends.

Firms at risk

As exciting as this all is, AI has the potential to disrupt many industries, and some companies may be more affected than others. The industries and companies that may be most harmed by the growth of AI include:

• Companies that perform manual and repetitive tasks, such as data entry and customer service, may see their jobs automated by AI-powered systems.

• Manufacturing companies that rely on manual labor for production may also be affected by the introduction of AI-powered robots.

• Transportation companies that rely on human drivers may also be impacted by the

Readers who’ve immersed themselves in recent news stories about ChatGPT may guess the end of this article. Others might not.

Investors can use artificial intelligence to help choose better investments in the stock market.

growth of autonomous vehicles powered by AI.

• Retail companies that rely on brick-andmortar stores may also be impacted by the growth of online retailers that use AI-powered personalization and recommendation systems.

• Banks, insurance companies and other financial services firms that rely on manual processes may also be impacted by the use of AI-powered systems for tasks such as fraud detection and financial analysis.

It’s worth noting that while some companies may be negatively impacted by AI, others may find new opportunities for growth and success by adopting the technology. It’s important for companies to be aware of these changes and adapt accordingly.

Opportunities via ETFs

For investors, there are exchange-traded funds (ETFs) that specialize in artificial intelligence. These ETFs invest in companies that are involved in the development and application of AI technology, such as companies that develop AI software, hardware and services. Here are a few examples of AI-focused ETFs:

• Global X Robotics & Artificial Intelligence ETF (BOTZ)

• Robo Global Robotics and Automation Index ETF (ROBO)

• First Trust Cloud Computing ETF (SKYY)

• Global X Autonomous & Electric Vehicles ETF (DRIV)

It’s important to keep in mind that these funds may not focus exclusively on AI and may also hold companies that are involved in other technology sectors, such as cloud computing, automation and electric vehicles.

“Are there ways artificial intelligence can be used to choose better investments in the stock market?”

Even the original illustrations in this piece were created almost instantly by a computer by making these two requests:

“Paint a stock chart in the style of Picasso,” and “create an illustration of the New York Stock Exchange with an artificial intelligence theme.”

An AI News Story? Not Exactly.

The adjacent AI-written article qualifies as “artificial” because a machine produced it, but the word “intelligence” hardly applies.

The chatbot begins its piece with a classic example of how not to lead off a news story. It concocts a dull, passive sentence typical of a sleepy small-town weekly newspaper but unfit for a sophisticated urban daily.

More specifically, a story in a weekly might begin this way: “The city council met Wednesday in regular session to consider building a new town hall.” A daily might present it this way: “Rioters hurling fiery Molotov cocktails broke through police lines again last night as protests against the construction of an expensive new town hall entered their third day.”

With that rather striking comparison in mind, let’s look at how an editor might sharpen the first sentence of this AI piece for investors.

The writing in this article isn’t going to win any literary awards, but it’s still well-constructed and has plenty of useful, actionable information. Considering that ChatGPT was introduced near the end of 2022, one can only imagine how powerful and useful this system will be in even one year’s time.

Tim Knight has used technical analysis to trade the equity and options markets for decades. He founded Prophet Financial Systems and created the website slopecharts.com, which offers free access to his charting platform. @slopeofhope

If variety is the spice of life, nobody told ChatGPT. The chatbot chooses the words “there were” to construct sentences in four consecutive paragraphs. That makes me want to take a nap.

Besides, it’s not just the repetition that leaves me feeling somnambulant. Something else seems wrong, too. Human writing coaches regard sentences with the words “there are” as passive. Instead, they recommend active sentences that derive power from strong verbs.

Passive: There were predictions that AI-powered self-driving cars would be widely available within a few years.

Active: Futurists predicted AI-powered self-driving cars would be widely available within a few years.

See the difference? If not, you’ll still feel the difference as you read.

The reveal

For the first time in this article, a human is typing these words. Except for some minor editing, everything above was composed by ChatGPT by posing a few simple questions:

“What are good examples of false promises from the past related to artificial intelligence?”

“What stocks will benefit the most from growth in artificial intelligence?”

“What kinds of companies will be harmed the most by artificial intelligence?”

AI: Artificial intelligence (AI) is a rapidly growing field, and there are a number of different companies and industries that stand to benefit from its growth.

Human: Artificial intelligence is poised to change nearly every aspect of global commerce: Companies with savvy leadership will prosper, while the clueless will fail.

Now that we’ve strung together nearly 200 words just to complain about the story’s first sentence, let’s move on.

We could go on, but we’re leery of judging AI-produced writing too harshly. It may strike us as lame now, but it’s expected to improve so much so quickly that our criticism may become dated almost overnight—maybe even quaint. We’ll soon see.

In the meantime, we’ll express our appreciation to Tim Knight for producing this AI-written column and sharing the questions he used to do it. We already liked his articles, and now we like them even more now that we’ve experienced machine writing.

As for the chatbot? Let’s give it an A for effort but a C- for writing skills. Its article seems lackluster—competent but by no means professional. — Ed McKinley

AI has the potential to disrupt many industries.

PHOTO: MIDJOURNEY

Tim Knight recently released the novel Solid State. © 2023. All rights reserved. The book is available on Amazon.

Adding AI to Your Portfolio

Separate truth from fiction in the hype surrounding artificial-intelligence stocks, and remain mindful of exposure

By James Blakeway

Investors who’ve been around the block—and their younger proteges who’ve done their homework—know something about the dot-com sensationalism of the late ‘90s and early 2000s.

Companies that claimed they were online or simply added “.com” to the end of their names generated intense interest in their initial public offerings or even in their established stock.

Something similar occurred in recent years with the rise of cryptocurrencies and an overzealous reaction to anything labeled “crypto” or identified with the “blockchain.”

Now, given the public’s fascination with ChatGPT, OpenAI and the AI zeitgeist, companies again appear eager to capitalize on the hype by proclaiming they’re shifting resources into AI.

Some will undoubtedly settle for a PR approach, prematurely changing their company names to include AI or simply switching their websites’ “.com” domains to “.ai.”

But that doesn’t mean investors should greet every corporate AI initiative with unwavering cynicism.

Big tech’s major round of investment is continuing with Microsoft’s (MSFT) funding of OpenAI, and Alphabet’s (GOOG & GOOGL) scramble to react to the explosion of new tech.

So, some investors may turn to buying stock in big tech companies as a way of investing in the future of AI. But it’s important to consider the other exposures of these behemoths.

Two factors might discourage investors from buying mega-cap stocks like Microsoft or Alphabet— particularly if they’re bullish about AI.

First, remember that each share purchased in the tech giants is a microscopically fractional investment in existing value. In late February, Microsoft was valued at just shy of $2 trillion. The investment in ChatGPT is only a slight portion of the company’s overall portfolio.

While it’s possible for Microsoft to double or triple in the coming years or decades, smaller firms staking their entire businesses and futures on AI projects are likely to grow more quickly.

Second, investors may want to think twice about shares in Microsoft or Alphabet because of the risk of overexposure.

Consider people in their early 40s who are invested entirely in a passive 401(k) like the Vanguard Target Retirement 2055 Fund. As with most target date funds, it blends stocks and bonds.

However, Microsoft and Alphabet are so big they can constitute a sizable portion of a large retirement

fund, even the ones with both international and domestic stocks and bonds.

If a 401(k) had $250,000 invested in the Vanguard fund, $6,120 would be in Microsoft, while $3,658 would be split between Alphabet A and C share classes (GOOGL & GOOG).

When jumping into new positions in large U.S. firms, investors should consider whether they already have a stake in them in other forms.

So, branch out and look for opportunities in smaller firms that may grow exponentially by adopting and integrating AI. Keep in mind it can feel like picking a horse to win a race.

In other words, some companies will thrive in this new age of AI, others will survive but fail to innovate and thus grow at the same pace, and some will face obsolescence.

The earlier allusion to stock-based funds can also apply to AI technology. Several exchange-traded funds (ETFs) provide access to this market.

One to investigate is the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT). It’s designed to track the Nasdaq index of the same name (NQROBO). By using modified weighting for the companies’ association with AI and robotics, it splits exposure among “enablers” (25%), “engagers” (60%) and “enhancers” (15%). (See “Portfolio breakdown” on the opposite page).

Investing in an AI ETF and AI stocks parallels betting on one horse and the whole field.

Enablers build the fundamental AI technology, while engagers provide products and software built on that tech. Enhancers offer services or products related to AI or robotics but do not rely on it as their core business.

As a bonus, the First Trust ETF includes international stocks—only about 50% of the funds are allocated to U.S. firms.

Because the First Trust ETF focuses on companies with core product offerings dedicated to AI, it could serve as a strong investment for anyone who wants broad exposure to the sector.

Bear in mind that given the weightings, no single company accounts for a large percentage of the fund. Therefore, a stock that grows exponentially has only a muted impact on the overall fund. That said, it does stand out as a way to participate in the rise of AI.

AI ascension

At press time, the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) was still significantly below its February 2021 peak price but has already rallied 30% off the lows set in October of last year.

Investors adamant about adding exposure to specific companies in the AI industry could take a more aggressive approach with a hybrid investment they can create by combining an ETF and additional shares of specific stocks.

The First Trust ETF provides a good starting point and eliminates a lot of the research needed to find stocks to invest in. If a company stands out, adding it to shares in an ETF naturally distorts the exposure and increases its weighting.

Anytime there’s an option to bet simultaneously on a single horse and all of the horses, it’s certainly worth exploring.

James Blakeway, Luckbox technical editor. @jamesblakeway

Some companies are changing their names to include AI or simply switching their website’s “.com” domains to “.ai.” Don’t be fooled.

First Trust AI and Robotics ETF (ROBT): Portfolio Breakdown

CRYPTO CURRENTLY THE STATE OF CRYPTOCURRENCIES AND DECENTRALIZED FINANCE

The Future of Crypto Staking

Decentralized finance may benefit from the SEC’s decision to shut down staking by cryptocurrency exchanges

By Mike Martin

The U.S. Securities and Exchange Commission has forced the Kraken cryptocurrency exchange to shut down its staking service and pay $30 million in fines.

It’s part of a crackdown on such staking services. Let’s examine the mechanics of staking and explore the reasons why shutting them down may benefit decentralized finance (DeFi).

Unlike Bitcoin, the Ethereum network is a “proof-of-stake” (PoS) blockchain that adds transactions through a process called validation.

Anybody can theoretically become an Ethereum validator. To be eligible, you “stake” the native currency of a blockchain. For Ethereum, this native cryptocurrency is ether (ETH).

Each ether you stake acts as a lottery ticket: Every few minutes, Ethereum randomly chooses a staked coin to do the math required to add the latest block to the Ethereum blockchain. The more coins you stake, the greater the chance you’re selected.

If the network selects a coin you’ve staked, you become a validator and must do the math required to validate all the transactions within the latest block.

Validators receive cryptocurrency as payment for their work.

However, to run your own validating node (computer), you have to stake at least 32 ether. With ether trading at around $1,575, the minimum initial investment to become an Ethereum validator today exceeds $50,000.

Staking in pools

I personally don’t know a single person who runs a validating node, yet I know a lot of people who stake crypto. They accomplish it by joining staking pools.

In pools, users rely on the computers of third parties to do the validating on their behalf. In

exchange for their work, these parties typically keep a small portion of the validating fees they earn.

Coinbase, for example, may be receiving the equivalent of 5% APR from staking the crypto in these pools, but only pay out 4% APR, keeping the difference.

Staking with exchanges

Staking pools exist both in centralized exchanges and decentralized finance protocols, but the federal government is strongly regulating the former.

Why would the SEC shut down Kraken for simply allowing retail investors to participate in yield-earning programs usually reserved for those wealthy enough to stake 32 ethers?

Because the agency can’t guarantee the exchanges are actually staking their customers crypto, according to SEC chair Gary Gensler.

“You, the investor, should receive important disclosures,” Gensler said. “For example, what do they actually do with your tokens? Are they really staking them? Are they lending, borrowing or trading them?”

Gensler’s statement shows staking-as-a-service falls under the SEC’s definition of security. That means companies offering staking services must follow strict investor-protection guidelines and meet disclosure requirements.

In the eyes of the SEC, Kraken failed to alert

Take control of your cryptocurrency by opening a self-custody wallet.

Fed chair Gary Gensler says there’s no guarantee exchanges are actually staking their customers’ crypto to certify blockchain transactions.

the public to the risks inherent in its staking program. As a result, it was fined $30 million and forced to shut down its staking division.

Staking in DeFi

U.S. businesses like Kraken and Coinbase fall under the jurisdiction of the government. But what about decentralized entities that have no one to fine them or shut them down?

This is where DeFi protocols like Lido and Rocket come in.

Like Kraken, decentralized protocols offer staking-as-a-service. Unlike Kraken, however, they’re decentralized. That means there’s no central authority for the SEC to point a finger at. They would be battling every participant on the protocol.

For sure, the SEC will likely someday modify its definition of security to regulate these

protocols or make them inaccessible to citizens, but that day will likely be years down the road.

In the meantime, inflow to these staking protocols has been surging since the Kraken shutdown. One of the largests DeFi protocols to benefit has been Rocket Pool (RPL).

If you’re nervous about the government shutting down your crypto-staking exchange, take control of your cryptocurrency by opening a self-custody crypto wallet. Besides giving you direct access to your private keys, staking protocols with self-custody wallets almost always pays a higher yield than centralized exchanges.

See the QR code on this page for more information on the tastycrypto wallet.

Mike Martin is head of content at tastycrypto, which recently introduced a self-custody digital wallet.

In the eyes of the SEC, Kraken failed to alert the public to the risks in its staking program.

More Security Digital Wallet

The Dollar, Boomers & AI Stocks

A shortage of workers is boosting wages, but AI may soon help the economy do more with less

By Ilya Spivak

Wages are on the rise. Even after a year of inflation-fighting interest rate hikes, average hourly earnings are growing much faster than usual. The 4.4% year-over-year increase recorded in January was far greater than the longer-term average of about 3%.

Some observers trace the trend to COVID19, but that’s only the most recent part of a story that begins with demographics.

Workers who are 55 or older constitute the largest contingent of the U.S. labor force at 24%. That’s true even though only 39% are participating in the labor market, by far the lowest percentage of any age group. In contrast, nearly 80% of Americans aged 20 to 54 are on the job.

Their age aside, the large number of workers dropping out of the labor pool is pushing wages higher—demand is outstripping supply. What’s more, the 55-and-over crowd has been abandoning the workplace at an increasing rate.

Then it got worse. The pandemic struck and greatly accelerated the trend toward ever-earlier retirement.

Temporary accelerants of price growth— like COVID-related supply chain disruptions—are easing. But COVID-19 also triggered a rapid reshuffling of the labor force that appears stickier.

Those changes in the job market will probably make what’s considered “average” inflation structurally higher in the years to come than in the past 10 to 20 years. Pushback from central banks will keep interest rates higher for a long time.

The transition now underway comes alongside a retreat from globalization. This is epitomized by the deepening challenges along

the critical U.S.-China segment of the global supply chain. The legacy of the trade war that began in 2018 remains, with positions seemingly hardening on all sides.

Increasingly frictionless trade over the past three decades did wonders for reducing the cost of business and gave birth to the just-intime, highly internationalized way of producing almost everything. Reversing this process

will do the opposite: Costs will rise, putting higher floors beneath both inflation and policy rates.

In the near term, that probably points to a stronger U.S. dollar. The Invesco DB USD ETF (UUP) tracking the currency’s average value against major counterparts has been in a long-term uptrend since 2014. Prices accelerated higher as the Fed unveiled its rate-hike intentions in mid-2021 and began to execute them in 2022.

A four-month pullback from the peak in September followed, driven by hopes the central bank is ready to stop and perhaps even begin to backpedal as recession looms.

That selloff is now struggling as Fed officials signal a protracted inflation fight ahead. Another leg of the decade-long advance may be next.

Longer term, the demographic changes afoot, coupled with a drive to bring production closer to home amid supply-chain irregularity, will demand a labor market that has to do more with less.

Rabid excitement about recent breakthroughs in generative artificial intelligence (AI) makes sense in this context.

The technology seems to have significant potential as a force-multiplier, enabling the productivity gains necessary to contain merciless cost pressures inherent in trying to support the U.S. economy with a thinner, less-experienced labor force.

The transition will not be quick, but the ever-forward-looking nature of financial markets means asset prices will respond well before broad-based restructuring is achieved.

The iShares Robotics and Artificial Intelligence Multisector ETF (IRBO) that tracks the space suffered alongside global stocks amid the Fed’s inflation fight last year.

However, a bottom may be taking shape. Prices seem to have completed a bullish head and shoulders chart pattern. The setup suggests an initial rise toward the $39-$41 area over the weeks and months ahead.

Ilya Spivak heads tastylive Global Macro and hosts the network’s Macro Money show. @ilyaspivak

Dollar dominated

The U.S. dollar fell from its peak but could be poised to move higher once again.

AI and robotics stocks took the same beating as the rest of the market last year. But being down doesn’t mean they’re out.

STEPHEN BIGALOW

1. Account screen to monitor current positions

2. Intraday charts for existing positions

3. TV for instantaneous news

Kidder, Peabody & Co., and then for Oppenheimer & Co. When I discovered brokerage firms didn’t know more than anyone else about what made prices go up or down, I struck out on my own.

Favorite trading strategy?

I discovered candlestick analysis by accident. As I started researching the signals and patterns, one concept kept hitting me in the side of the head—this all makes sense! Before candlestick analysis came along, I was one of the worst investors in the world. Once I started using candlestick charts, I started making money consistently.

Average number of trades per day?

One. I’m a swing trader with the average trade lasting two to 10 trading days

based upon 400 years of Japanese rice traders’ observations.

Favorite trading moment?

A lot of moments, but especially when a candlestick pattern is performing as the high-probability expectation.

Worst trading moment?

How did you start trading?

When I was 8 years old, my dad bought me one share of Eazor Express [a trucking company now defunct]. It split two-for-one, so then I had two shares. I would watch the price movement every single day in the newspaper. Starting at the age of 21, I became a stockbroker for

What percentage of your outcomes do you attribute to luck?

A very small percentage. With candlestick signals and patterns, you are constantly putting on trade set ups that are going to have a high probability of moving in your favor,

When I would be in a good bullish candlestick price pattern and a news announcement would come out that would knock the price way down. I would sit there all day long hoping the price would go back up, but I learned that if the price was not doing what the pattern was expected to do, I had to close out a bad position very quickly and move on to another trade that had better chart pattern probabilities for a profit.

Favorite trading book Profitable Candlestick Trading by Stephen

W. Bigalow

THE LAST PICTURE

Jimmy Donaldson, better known to his 136 million YouTube subscribers as MrBeast, became the medium’s all-time top earner when he raked in $54 million in 2021. The 23-year-old attracted more than 376 million views to his most popular video and more than 10 billion views across all his channels.

MrBeast got his start on YouTube by streaming himself playing video games like Minecraft and Call of Duty. Now, he focuses on philanthropy, reviews, reaction videos and the paid challenges that have made him notorious for giving away money to subscribers and people on the street. He’s depicted above

getting “slimed” after winning the Favorite Male Creator award at the 2022 Nickelodeon Kid’s Choice Awards.

What happens with MrBeast matters because of the massive popularity of his medium: YouTube. This year, streaming services are expected to surpass TV in viewership, and it all began with YouTube.

For the first time, streaming enabled the public to watch anything on the internet. From the first video ever posted by co-founder Jawed Karim in 2005—a whopping 19 seconds titled “Me at the Zoo”—to today’s 800 million options.

YouTube has grown into a colossus no other streaming site can match. With 2 billion active viewers every month, it’s Google’s golden child, accounting for almost 12% of the tech giant’s revenue. What’s more, YouTube is second only to Google as the most frequented site in the world.

The next issue of Luckbox will guide you through the YouTube universe while also examining the growth of streaming, the influence of influencers, the birth of the creator economy and, as always, the related investment opportunities.

PHOTO: GETTY IMAGES

YouTube’s Beast Mode

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