Is woke AI the end of Google?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• Will woke AI kill Google?

• Dad, can we speak to co-pilot?

• Poor old Robin

If that’s enough to get history rewritten, read on…

AI Collision 💥 Google messed up and it’s going to hurt!

Black Nazis. Mixed-race Romans. Elon Musk and Hitler being tough to determine who has been worse for history…

These are just some of the crazy outputs that Google’s artificial “intelligence” Gemini has been spitting out over the weekend.

Here take a look for yourself,

The absurdity of it all has gone viral.

And it’s not just a couple of things it’s misfired on either. It has flat out decided to rewrite (and reimage) history based on “woke” ideals.

It got so bad that it prompted Google to issue a statement about how things have “missed the mark”.

Google said:

It’s clear that this feature missed the mark. Some of the images generated are inaccurate or even offensive. We’re grateful for users’ feedback and are sorry the feature didn’t work well.

We’ve acknowledged the mistake and temporarily paused image generation of people in Gemini while we work on an improved version.

Missed the mark is an understatement.

But this further reinforces a point we made all the way back on 5 October 2023, in our of our earliest editions of AI Collision 💥, where we considered where “truth” exists in a future of AI.

It makes you wonder what truth might look like in the future if AI is allowed to source data that is crap data, and a virtuous cycle kicks in where crap data in equals crap data out, and that crap data is the next input and the cycle just goes on and on.

Google has proven that crap data equals the reconstruction of history.

Not a good start Google.

But there’s something bigger in play here. And I suspect that it could be a strong reason to take a dim view of Google long term.

Already Google is falling way behind in the AI agents race. This latest catastrophe has eroded trust in the tech giant at an unprecedented level.

Compared to the slick AI that’s working very well elsewhere, things are looking a bit shaky for Google. I know that’s hard to image, but I think right now we’re looking at the complete reshaping of “search” and how we find information on the internet.

And the reason I say that is because of a five-year-old and two-year-old…

My son who’s five, is fascinated with the moon and planets and the universe.

More specifically he really wanted to know more about the phases of the moon, and why the moon turns red during a lunar eclipse. I didn’t know so we decided to find out.

However, we didn’t do a Google search.

That’s so last year!

We opened Microsoft’s Copilot app and my son asked the question, “Tell me about the phases of the moon and why the moon turns red in a lunar eclipse.”

After a second or two, a pleasant Australian voice (I set the language to English (Australian)) read out all the information he needed to know. It also included links, images and prompted him to look for more information.

And guess what, it was exponentially better than a Google search would have delivered.

You know what my boys now do when they want to find out something?

They come up to me and say, “Dad can we talk to Copilot?”

Both of them. A five-year-old and a two-year-old.

Google search will be nothing to them. When they want something, they’ll ask Copilot. Copilot is already the dominant AI in that respect – they know no other way.

Their future will be integrated with AI, and that trust in AI is being laid now. Not in a decade’s time, not even in a week’s time.

Now.

Google dominated search and became a titan because of its Chrome browser and Google Search.

But what happens if you take away Google’s dominance in search? Bing never quite cut it for Microsoft, it missed the mark. But perhaps Copilot is the Google Search killer that Microsoft has been gunning for?

Ed note: As noted in last week’s editorial, I’ve got a new AI briefing that’s actually going live today at 1pm. So now’s your last chance to register for that and get your special AI Collision 💥 viewing pass. It’s free to attend, and there’s loads of great info I’ll be talking about, including three AI stocks I think are primed for this AI explosion we’re seeing in the markets right now.

Just hit this button to head to the registration page.

AI gone wild 🤪

Is a $10 trillion company that crazy an idea?

This is the question in everyone’s mind when looking at the stock chart of Nvidia.

I mean how high can it go?

It is just shy of $2 trillion.

Can it 5x from here?

Is $4,000 per stock an actual possibility?

Or does it not matter? The better question here is not how high can it go, but how important is it to the future of AI systems? And will its competitive moat last forever?

These are the questions you need to ask.

Ultimately there’s no limit to what a company could be worth. Based on the market, sales, its tight protection of what it does and who it does it for.

And, of course, what competition is out there to threaten it.

But I want to focus on the price and nothing else for a moment.

That’s because I think we’re approaching an interesting point with Nvidia, Broadcom, Super Micro and a whole host of other market superstars that have exploded in value over the last year.

It’s a point that I call the “Splittening”.

Right now Nvidia’s stock price is almost at $800. Broadcom’s stock price is at almost $1,300, Super Micro is at $860, ASML is at $933, Lam Research at $930… and so on.

These stocks, purely on the stock price, are expensive. And that’s a huge barrier for a lot of investors desperate to invest in these stocks.

For example, the average US personal savings rate (the amount people have left after taxes and spending) is estimated to be around 3.5% (in reality these figures are likely lower).

That’s 3.5% of the average disposable income, which is currently around $46,700. In other words the average US person has about $1,634 in savings to invest each year.

Now, you reckon half of that goes into a single stock of Nvidia? I doubt it. Most likely none of it goes into the market. But it should. It should be invested long term. But to chunk half into just one stock of one company is a big ask.

Now, what if Nvidia’s stock was $8? And Broadcom’s was $13? And Super Micro was $8.60?

The company might be worth the same, but what if someone with $1,634 to invest could maybe buy 10 shares in Nvidia, 10 in Broadcom and 10 in Super Micro, and still have some for others?

This is where stock splits come into play.

It doesn’t happen a lot, but it does happen over time. Where a stock price becomes so expensive on the issued equity, that price becomes a huge barrier for a whole host of investors that are eager to invest in the stock.

My take is that a lot of these companies that have run up in price, like the ones mentioned, will be doing stock splits soon.

If that’s the case, I also think that’s going to be some proverbial rocket fuel under their stock split price as investors that were previously priced out of these stocks or found investing in such an expensive stock too restrictive, now have a much easier path to invest at a cheaper price.

It’s no guarantee of the company being worth more after they’ve done a stock split, but it’s an interesting psychological dynamic when you look at a stock price vs the stock valuation.

I’d say if Nvidia did a stock split, then I think it would see its stock pump even higher as waves of smaller investors were able to proverbially “load up”. And for those in the stock before the split, you end up with a bigger bag, albeit the same value of ownership – and the chance to ride the new wave of investors FOMOing in.

Anyway, we don’t know if that’s going to happen. But it certainly feels like it will or at least should be on the cards for a lot of these stocks in 2024.

Boomers & Busters 💰

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

Boom 📈

• Brainchip (ASX:BRN) up 36%

• Appenx (ASX:APX) up 24%

• Nvidia (NASDAQ:NVDA) up 10%

Bust 📉

• C3.ai (NASDAQ:AI) down 7%

• BigBear.ai (NASDAQ:BBAI) down 6%

• Vicarious Surgical (NASDAQ:RBOT) down 5%

From the hive mind 🧠

• I think I’ve heard it all now. First it was bitcoin uses too much energy. Then it was AI uses too much energy. And “Big Tech” uses too much energy. But now…it’s “Big Tech” uses too much water!

• The interesting thing here isn’t that a studio expansion is being put on hold because of AI, but that a prominent producer is going to use AI in their movies. Will audiences respond to a movie knowing the scenes are AI made? Is it that different to CGI now? Or will audiences turn back towards more “traditional” real world cinema?

• We’ve said it before that one of the biggest stories about this year of elections is going to be the influence that AI has on it all. And I tell you what, Meta is not going to want to get caught up in election muddying, like they have previously. So they’ll be proactively showing they’re doing something, anything to make the threat of AI go away.

Artificial Polltelligence 🗳️ the results show

What AI have you used? There’s so many to choose from now, so we’re curious, have you used any? And if so, which will come out on top as the most used so far?

Well the votes are in…

The winner is… ChatGPT!

That’s not a huge surprise as ChatGPT was really the spark that lit the fuse on the explosion of generative AI and AI agents.

Interesting to see Perplexity and Copilot in a distant battle for second.

My take is that this time next year, Copilot will be streets ahead of the rest of the pack. That every time you jump onto a Microsoft operating system you’ll be interacting with Copilot.

Anyway, time will tell. And, we’ll have a new poll for you on Thursday.

Weirdest AI image of the day

Reporter: Hey Robin, aren’t you tired of being considered just Batman’s sidekick? Robin: Nah!!! It’s not that bad. – r/Weirddallee

ChatGPT’s random quote of the day

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Thanks for reading, see you on Tuesday. And if you’re enjoying our work, please like, share and leave comments below,

Sam Volkering

Editor-in-Chief

AI Collision

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