The Age of Excess or The Age of Austerity?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Make it so
AMR and Qualcomm’s little spat
Wheelchair NASCAR

If that’s enough to get the AI apps coding, read on…

AI Collision 💥

Apologies for the image that comes next. It’s LONG, but it’s important for me to show you to reinforce something that is worthy of your full consideration.

I saw this image on my X.com feed with the caption,

We should build a monument of this image as a memory to an age of hubris and excess.

At first, I thought to myself, wow, yeah, that’s 1,191 private companies with valuations over $1 billion – will be over $1 trillion of wealth from this lot.

And some of the names you’ll know very well…

Brewdog, Shein, Juul, Flixbus, Bolt, Strava, MasterClass, Klarna, Revolut – it’s a long list, as you can see.

It’s a mix across all industries, and on the face of it, yes, it seems like cash has flown fast and free to pump these companies to billions of dollars (and then some).

It would be easy to think that perhaps that’s as good as it gets, and that the next 1,000+ “unicorns” will take longer to assemble and will be harder to make.

But I don’t think so. In fact, I think we’re on the cusp of an even bigger age of excess… sort of.

These companies were all built by people, hiring people, building bigger companies with people.

My view is that we will see more “unicorn” companies, but they will be built with less people and more AI.

Many of these companies have been able to build applications that obviously fit a consumer need – hence the popularity and use of some of them; case in point, Klarna and Revolut.

But what if you could build everything from an application to a backend database to hosting on a cloud and marketing rollout… build a billion-dollar business, with just one person?

I think that’s where we’re heading. That it will be companies with a handful of people leaning heavily into the use of AI tools that will unlock a new age of excess and abundance, opening up new channels of wealth and opportunity.

I say this because at the same time I saw that X.com post, I was also in the midst of researching and experimenting with an AI-powered software company called Replit Agent.

In essence this can create an application and all the pieces of the puzzle that go with that from simple prompts. You can then tweak it, learn as it goes, add features – you can do it all, and do it all by yourself. Here’s its intro video which I found gives at least a good preliminary insight as to what the company is doing:

Of course, to properly use Replit Agent, you need to sign up and pay for it. So as a company, Replit could very well be one of those new “unicorns” in the not-too-distant future.

But I think it’s also tools like this that unlock the full potential of AI for anyone. It means if you’ve got an idea, any idea that you think is good enough to actually create something with, you can use tools like this to make it so.

I believe that will be the biggest wealth-creation catalyst for generations to come.

AI gone wild 🤪

There’s nothing like a good old-fashioned tit-for-tat. Especially when it comes to the semiconductor supply chain that is fundamentally critical for modern technology and consumer devices…

I’m talking about the current spat between ARM and Qualcomm. ARM has quite literally just rug pulled Qualcomm as a big f*** you to this ongoing dispute.

OK, so this needs a bit of context so it makes sense…

The dispute between ARM and Qualcomm is all about licensing and intellectual property (IP).

It all began when Qualcomm acquired Nuvia for $1.4 billion in 2021. Nuvia’s speciality was high-performance ARM-based CPU designs.

Straight off the bat, you can get a bit of an idea why this would piss off ARM. At the time Qualcomm said,

The world-class NUVIA team enhances our CPU roadmap, extending Qualcomm’s leading technology position with the Windows, Android and Chrome ecosystems.

However, things took a turn when ARM, which licenses its IP to companies including Qualcomm, claimed that Qualcomm’s use of Nuvia’s designs breached their licensing agreements.

Specifically, ARM argues that Qualcomm is using Nuvia’s licences in ways not originally permitted, such as for client PCs instead of servers.

This legal dispute has been ongoing for a couple of years now. ARM had demanded the destruction of certain Nuvia designs pre-acquisition. In short, ARM wasn’t happy and wanted some things set right.

That didn’t happen. And ARM found out.

Now, ARM has issued a 60-day notice to cancel Qualcomm’s licence to use ARM’s IP for chip design.

If some kind of cease-fire can’t be reached between the two inside this time, then Qualcomm will have to stop manufacturing and selling ARM chips!

If Qualcomm were to lose the licence, it would impact products like the Snapdragon Elite platform for AI-enabled PCs and have a knock-on effect on other hardware providers reliant on Qualcomm’s technology.

The Qualcomm stock price took a bit of a hit on the news, sinking from $173 to $163 in the blink of an eye. ARM’s price didn’t handle the news well either, sinking from $152 to $140.

These kinds of disputes are never good for either company. Even if they can sort it out, you can’t help thinking there’s now prolonged bad blood which doesn’t shape up well for either.

As this washes out in the next 60 days, it might very well push both ARM and Qualcomm to levels that makes them both worth looking closer at for investment. Neither is going away any time soon, both have in-demand tech, and both are critical as the rollout of AI-enabled devices continues.

This little-spat is certainly good theatre and might also be a good buying opportunity.

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 📈

Predictive Oncology (NASDAQ:POAI) up 14%
Intuitive Surgical (NASDAQ:ISRG) up 8%
Taiwan Semiconductor (NYSE:TSM) up 8%

Bust 📉

BigBear.ai (NYSE:BBAI) down 8%
C3.ai (NYSE:AI) down 6%
Micron Technologies (NASDAQ:MU) down 4%

From the hive mind 🧠

AI and healthcare is going to be one of the biggest areas of innovation we’ll see in the next few years. It’s a hot area where I think a lot of money will be made. And here’s another example of how that shapes up.
This is just wildly confusing. It further highlights the point of what is real, what is fake, what is AI and what is not.
WARNING: this is bloody sad. No two ways about it. This is what the dark side of AI looks like and it’s nothing but pure tragedy. More needs to be done to ensure the mental wellbeing of kids are looked after in an increasingly digital and now AI-influenced world.

Artificial Polltelligence 🗳️

Our flash poll from Tuesday got a great response, you can find the results below.

I get the feeling that being more about passport control could open up a whole can of worms, which I really don’t want to launch into here at AI Collision… That said, my colleague and friend Nick Hubble certainly has a LOT to say on the topic.

In fact, he’s saying that in just five days’ time, when the UK budget is released into the wild, the British establishment is about to drop a bomb on British citizens that makes Brexit look like a drop in the ocean – and that it could have wide-reaching impact on the wealth of everyone in the UK.

You can see his thesis right here.

As for this weekend’s poll, you can find that below.