Is £300,000 too cheap for this hand-signed AI collectible?

Welcome to AI Collision 💥,

Create a bunch of companies all releaseing earnings at once trying to be heard over the others

In today’s collision between AI and our world:

Cutting edge chips are in short supply
Another story from a reader on the inside
Steve Sweat

If that’s enough to get the sweat dripping, read on…

AI Collision 💥

I read this in The New York Times today,

“…the expense of building A.I. systems has shocked tech industry veterans. Unlike the iPhone, which kicked off the last technology transition and cost a few hundred million dollars to develop because it largely relied on existing components, generative A.I. models cost billions to create and maintain. The cutting-edge chips they need are expensive and in short supply. And every query of an A.I. system costs far more than a simple Google search.”

That tells me two things.

Yes, AI is expensive. There’s a large financial cost there’s a large energy cost.
Cutting edge chips are in short supply.

Point two is arguably the most important thing there.

Cutting edge chips are in short supply.

You know what I think when I hear that? I want to own the companies that supply and sell those cutting edge chips that are in short supply.

You know why?

Because AI is expensive and there’s a large financial cost.

In short, the companies that supply and sell those cutting edge chips are holding the proverbial gun to the head of the market. They can make a price, any price, special price for you, and make BANK.

One of those companies to keep in mind has to be Nvidia. You want to know why? Take a look at what Greg Brockman, CEO of OpenAI posted on Twitter last week:

That’s Jensen Huang, CEO of Nvidia. And that’s a hand signed delivery of their DGX H200.

The first in the world, and it’s going to the most disruptive AI company in the world.

Not to Google. Not to Amazon. Not to Apple. Not to Netflix, Spotify, Tesla, not to Microsoft.

To OpenAI.

To Sam Altman and Greg Brockman.

That’s a bigger deal than I think is given credit for. And also I think that Sam Altman is fast becoming one of the most important people in not just AI but in the world, along with Huang.

We asked about it a couple weeks ago in our poll, most people chose Elon Musk still, and then Huang, but Altman wasn’t far off.

I say that table turns in the next year or so.

And I also wonder where AI companies like Nvidia sits come this time next year?

It’s massive, and its volatility means hundreds of billions of dollars in value get wiped from the company and then added back week to week.

But if you take a long term view, say 10 years, then I think you inherently keep coming back to,

Cutting edge chips are in short supply.

Who get the most bang for their buck from those chips?

The company whose name is on that cardboard box in the picture and the bloke standing in between Altman and Brockman who just hand-signed that big silver box (with some of the most advanced tech in the world packed inside).

I tried to find the price for the DGX H200, and couldn’t, but I did find the DGX H100 which was about £300,000. I’m guessing the DGX H200 is more. That one in particular, it will probably end up in a museum one day thanks to it now being the most collectible piece of tech in the world with Huang’s signature on it!

So Nvidia is going to make bank, no doubt. And their earnings release in a couple of weeks’ time will reveal more. I think they’re going to blow the market away again when they release them and it may be the tipping point which sends the whole AI-focused market back into overdrive.

AI gone wild 🤪

I was thrilled to get some further reader feedback last week after I’d asked for anyone’s previous experience in computing that could shine a light on just how far the industry had come over the year.

“PS” wrote in to me (just using initials to maintain their privacy) to tell me about his history and it was fascinating insight which I wanted to share with you today.

Hi Sam,

I graduated in Electronic Engineering in 1971, with an ambition to become a circuit design engineer, specifically a semiconductor/chip designer.

It seemed to me that custom silicon was the way that electronics equipment would be made (as opposed to sticking dozens/hundreds of small scale chips on a printed circuit board) and I wanted to be a part of that future.

In 1973 I joined Plessey and was given a job of designing a mixed digital/analogue custom chip to go in the handset of a small private telephone exchange.

The design took a year, and at the time it was the most complex chip that Plessey had made, with 200 transistors, all individually hand crafted, laid out, and connected up with just a single layer of interconnect.

It was completed in 1974 using a 5 micron bipolar semiconductor process.

50 years later and how things have moved on – today’s state of the art/AI chips now contain around 200 billion transistors – 1,000,000,000 times as many as my first chip, with feature sizes around 2,000 times smaller (4,000,000 times smaller in terms of area).

I wonder where we will be in another 50 years.

Best wishes,

PS

Imagine that. One billion times as many transistors and as much as 2,000 smaller in the space of just 50 years.

So cast your mind forward to the year 2074…

You’re reading AI Collision 💥 I’m still writing it because I’m still fit and alive enough to do so. I talk about the latest Nvidia chips and how they now have 200 quintillion transistors on them.

That number is 2 followed by 20 zeros. At this level we’re talking about numbers that are impossible to contextualise. But I’m going to try…

For example scientists believe there are possible around 1 septillion in the universe. A septillion is a 1 followed by 24 zeros. So if in 50 years chip development has continued on its current track, we’re now starting to get close to having as many transistors on a single chip as there are stars in the entire god damn universe!

Does that seem wild and crazy enough to you?

Does to me. And it my tiny little human brain even struggles to think that’s possible. But I’m sure that PS here and MJ from the other week probably thought that over 200 billion transistors on a chip in just 50 years would be possible too…

The takeaway here is also that the world has gone through a lot of crap in 50 years and still we’re able to make this kind of progress.

Doubt humanity at your own peril I say and be excited about the tech and the companies that will dominate these industries over the next 50 years.

Again, I call on you my loyal and fascinating group of readers to let me know about any experiences or anecdotes you’ve got related to these fields and AI.

If you’d like to write in, just hit the button below and it’ll open up a direct line to me where you can send me a message and let me know your story.

Boomers & Busters 💰

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

man in black suit jacket and black pants figurine

Boom 📈

Amesite (NASDAQ:AMST) up 72%
Darktrace (LSE:DARK) up 26%
Tesla (NASDAQ:TSLA) up 27%

Bust 📉 (not so many “busters” this week!)

BrainChip (ASX:BRN) down 4%
Veritone (NASDAQ:VERI) down 3%
Oddity Tech (NASDAQ:ODD) down 4%

From the hive mind 🧠

Bill still pulling strings doesn’t surprise me. If you create something, anything, it would be so hard to let go, ever. I don’t think he’ll ever stop really. And why would you when you’re helping lead the market in the most disruptive tech since the internet.
We told you last week about Microsoft’s handy little AI courses to get used to Copilot. Only fair that we let you know Google has some too which is supposed to help you become more productive.
The way in which AI will be used to prank people, scam people or make people appear racist is going to really make law enforcement challenging. But it will also make for some great headlines.

Artificial Polltelligence 🗳️

AI bubble has burst, buy the dip and let ‘er rip…

These are the questions we have to ask when we look at AI related stocks copping a hammering in the market over the last few weeks, and then bouncing off the floor as though it was all just a bad dream.

But then as I read in the New York Times earlier, the bubble is over again, but then again it’s just that companies have to figure out how to make money…you don’t say!

So here’s the results from last week’s poll which asked you that question, is the dream, is the bubble burst and over…or do you buy the dip?

It’s neck and neck with buy the dip, and a bit of both.

I think that speaks to the pragmatic nature of what we do here at AI Collision and your smart approaches to investing.

I agree that it’s a bit of both. There is no doubt that a lot of AI companies have raised silly money off a really good pitch deck and really nothing else.

That’s a sign of a market in a bubble. But it’s private venture capital that’s making those moves. We haven’t really seen a free for all of companies listing on the stock market on a whim and a prayer that are AI focused.

I think that’s a good by product of the market in the last few years. Companies that are deciding to go public are making sure their ducks are lined up much better than perhaps before when the pitch deck and a bit of seed capital would suffice.

And I think investors are a little savvier too. You’re making sure that if a pure out and out growth stock hits the market, the company is in a position with the appropriate backers that gives them the best shot at success – and those that are just riding the hype train well it seems like they never make it to market anyway.

A new poll will be with you on Thursday.