Reality check: Core retail sales surprised on the upside in February, but were revised down by a total of 0.2% for December and January. Goldman estimates that core sales fell 1.3% annualized in the three months to February in real terms. And was all before the oil shock.
I think that AI could be as transformative as Gutenberg‘s printing press.
Unfortunately Gutenberg went bankrupt because of the high capex nature of his operations.
The irony is that this oil shock is very bearish for oil down the road because it is going to supercharge demand for EVs.
One important reason why the stock market hasn’t fallen more is because investors don’t expect oil and gas prices to stay this high for very long.
As the chart below shows, the cost per token is now falling. This suggests that companies are becoming increasingly cost-conscious and are turning to cheaper models for their AI needs.
Look at the chart below of internet data transmission vs internet capex and realize that the same efficiency gains will occur with LLMs. We may not end up needing to spend trillions of dollars on data centers after all.
About half of year-over-year S&P 500 EPS growth in Q1 is expected to come from just two companies: Nvidia and Micron, both of whom are benefiting from temporary chip shortages.
Daily trade volume in the Red Sea plunged by two-thirds in late 2023 due to Houthi attacks and has not recovered since. This suggests that shipping companies will require stronger assurances of safety before undertaking passage through the Strait of Hormuz.
Fear the kink
I wrote about the real INTELLIGENCE CRISIS seven years ago and it has nothing to do with AI:
www.bcaresearch.com/report-acces...
