AI can help you save $1.2 million per year

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• Not the first airline or AI company you think of

• BHP goes back for another go

• Bad influences

If that’s enough to get the jets flying, read on…

AI Collision 💥

I nipped down to the petrol station earlier today. I needed to fill the car up with diesel.

At the pump I paid €1.75 per litre. Filling up the car cost me around €100. I don’t drive much, so I only fill up maybe every three weeks or so. That means over the rolling year I’m in for about €1,800 in fuel.

That’s pretty good.

Now, had my fuel bill been around €176,000 for the year… I’d need to be re-thinking my driving strategy and usage. If I was driving a Boeing 787 Dreamliner, that would be my fuel bill (for just one fill though!).

Airlines actually pay more like 64.36 cents per litre, or $2.46 per gallon of jet fuel.

But if you’re an airline (thankfully I’m not) then year on year you’re facing fuel bills well into the hundreds of millions of dollars.

That’s because a single Boeing 787 Dreamliner has a fuel capacity of 101,085kg.

With aviation jet fuel prices at around 64.36 cents per litre (also thankfully not the €1.75 I have to pay), then to fill up the tank of a 787 costs a tick over $65,000.

Now imagine you run an entire fleet of around 300 planes. Not all are as big as the 787, but still, your fuel bill is astronomical! Well into the hundreds of millions per year.

So if you could save some money here or there you’d take it right?

Like that infamous story of American Airlines who realised that if it removed the olive that came with the dinner salad (as most people weren’t eating it) the company would save $40,000 per year.

Now, what if there was a way that an airline could save not just $40,000 per year, but $1.25 million per year?

Sure it’s not billions, but in a world where airline margins are infinitely diminishing, a $1.25 million saving is everything.

Alaska Airlines says there is a way to save that cash. In fact it’s saying that’s how much it’s already saving thanks to AI.

That’s right, Alaska Airlines says that since implementing AI into its travel systems it’s been able to save some dough, or olives, or jet fuel.

In 2023 alone, thanks to AI adjusting flight paths and improving efficiencies, clipping a few minutes here or there off of flight times, AI has helped the company to save as much as half a million gallons of aviation fuel.

At 243 cents per gallon for jet fuel, that’s a handy saving for the airline of $1.25 million.

(Note: some screengrabs on socials say half a billion in fuel savings, that’s wrong. It’s half a million.)

This is what happens when AI is put to good use to help improve efficiencies. It equates to real-world savings.

The parent company, Alaska Air Group (NYSE:ALK), hasn’t blown the doors off its financials thanks to AI, but every little bit helps.

It is profitable, it has seen its stock price improve over 10% year to date and we know it’s using AI (and has done for a few years now) to help improve that bottom line.

The company is not the first airline you think of when you think of an airline stock – and it is definitely not the first company you think of when thinking AI – but this is the perfect example of the convergence of AI with all kinds of different industries and how AI is helping, quite literally, guide the world.

AI gone wild 🤪

Can anyone say, “BIDDING WAR”?

Last week I wrote to you about the battle for copper as the mining giant BHP put in an unsolicited bid for Anglo American.

BHP was prepared to outlay $39 billion for the company. As I explained last week:

… [BHP] got itself in a tizz over trying to get its hands on every great copper asset it can. And this is the reason why it’s taking a $39 billion swipe at absorbing Anglo American into the BHP family.

There’s only one reason the company wants Anglo too…

Copper.

That’s it.

Anglo has some top-notch copper mines. As a friend of mine in the industry said to me, “Quellaveco and Collahuasi are awesome. Maybe the two best in the world.”

Anglo promptly rejected the bid. It was not enough and far too complicated.

But it was a distinct signal that the only thing on the miners’ minds right now is the battle for the best copper assets in the world.

And who can blame them really.

After all, copper is needed in everything from EVs to AI data centre servers.

The world hadn’t quite cottoned on to this demand for copper in AI until March this year when Nvidia announced, somewhat surprisingly, to the world that it was making a notable pivot from fibre to copper in its next generation AI servers, the DGX GB200 with NVLink.

In other words, its mega-crazy-fast and smart AI servers were going to need a ton of copper for the huge demand for these products, and that most likely moving forward this would be a multi-generational thing for Nvidia AI servers.

Add to that mix the increased need for cooling for these AI servers and that copper is one of the best materials for thermal management and you’ve got yourself one gigantic demand-side addition for copper long term.

Thereby, BHP is dead set on getting more of the best copper resources in the world.

And that’s why it went back to the table this week with another bid for Anglo.

This time BHP has upped the game with a $42.7 billion proposal for Anglo (and its copper mines).

And…

Anglo promptly rejected it again.

This indicates Anglo’s waiting for the other suitors as I proposed would likely come. BHP, being well aware of this, got this revised bid in pronto after the first failed attempt.

Sounds like BHP wants it bad and will probably go back again. But I suspect Anglo will hold out for more.

Anglo’s stock price is benefitting from all this too as you’d expect…

Expect this to heat up further. Expect more bids. Expect Anglo to sell these mines or the whole company to someone.

This train has left the station and isn’t coming back. The battle for copper is on, and Anglo might be the first target, but don’t expect it to be the last.

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• iRobot (NASDAQ:IRBT) up 40%

• Zeta Global Holdings (NYSE:ZETA) up 22%

• Team Internet Group (LSE:TIG) up 10%

Bust 📉

• Tesla (NASDAQ:TSLA) down 6%

• Cyngn (NASDAQ:CYN) down 31%

• Duos Technologies Group (NASDAQ:DUOT) down 20%

From the hive mind 🧠

• The talk going around is that Apple has now struck a deal with OpenAI to power Apple’s AI future…more on this in the coming weeks! But for now imagine a world where Siri might actually be helpful…

• We wrote to you about AI dogfighting planes a couple weeks ago. Well is there a better way to validate the technology than having the actual US Air Force Secretary in the passenger seat as the AI takes control?

• This seems like a sizeable investment. And I guess $4.3 billion is sizeable. But the location? France? That one I didn’t see coming. And can’t really make heads or tails of why France. But then again I’m not the one with the $4.3 billion cheque.

Artificial Polltelligence 🗳️

I called on your expertise and predictive potential last week to see if Nvidia’s earnings were going to blow the roof off or underwhelm.

The date is getting closer to its announcement, but now your vote is locked in and I wonder if we can use it to make a call on what it will do to the stock price.

Nonetheless, here’s what you think will happen in eight days’ time…

Another poll coming Thursday…

Weirdest AI image of the day

Bad influence warning signs – r/Weirddallee

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision

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