Artificial intelligence, or AI, has emerged as a significant trend in markets throughout 2023.
While I haven’t written extensively on AI, I have been closely following the topic and want to explore some overlooked themes and questions surrounding this technology.
Theme 1: Technological Progress Through Step-Changes
Technological development often occurs through overlapping step-changes, rather than a smooth linear progression. Breakthroughs in energy sources and materials have historically driven major advancements. While AI has great potential, it is essential to consider the broader context and how it fits into the larger picture of technological progress.
Theme 2: Increasing Accessibility with AI
Instead of focusing solely on investing in AI-related software and hardware, it is crucial to consider which products will become significantly more accessible thanks to AI. The integration of AI technologies can streamline workflows and make complex tasks more efficient, opening up new opportunities across various industries.
Theme 3: Disruption and Adaptation
In addition to considering the benefits of AI, it is essential to examine which industries and businesses might be disrupted by AI. Understanding the potential for disruption can guide investment decisions and help identify opportunities for growth in sectors less likely to be heavily impacted by AI.
Theme 4: The Complexity of AI
As AI systems become more advanced, they can reach a level where the software’s complexity surpasses human understanding. This level of sophistication raises questions about the potential risks and ethical implications of AI systems that operate beyond human comprehension.
Theme 5: The Impact of AI on Inflation
AI has the potential to create disinflationary effects by improving the efficiency of various services. However, monetary expansion and debt levels remain high, affecting the broader economy. It is essential to consider the interplay between AI-driven productivity gains and monetary policies to understand the broader implications for inflation.
Theme 6: Bitcoin and AI
Theme 6A: The Use of Bitcoin for AI Transactions
Bitcoin, with its open-source and programmable nature, is well-suited for facilitating AI transactions. Open-source digitally-native money can enable machine-to-machine, machine-to-human, and human-to-machine payments, providing a natural payment solution for AI agents operating in a world of digital systems.
Theme 6B: Proof-of-Work for Security and Spam Prevention
Beyond its monetary potential, Bitcoin’s proof-of-work mechanism can also be applied to verify authenticity and prevent spam in digital content, given the rise of AI-generated fakes and impersonators. Proof-of-work serves as a means to validate identity, ensuring that content originates from genuine sources and reducing the spread of false information.