I Was Completely WRONG About AI (Shocking Truth)

0:00Ladies and gentlemen, I got a confession to make. I was wrong about artificial intelligence. I was really wrong, actually. Now, it's no secret I've been a bull on the technology for a while. I think the impact on society is going to be positive and it's going to lead to economic abundance. I still believe every single one of those things today. I believe it more today than ever before. But I got some of the details wrong and I got to tell you about it. For example, I thought AI was going to destroy a significant number of jobs. I don't believe that anymore. I have changed my mind on how AI is going to impact jobs in America.

0:31Previously, I thought AI would replace many entry-level roles. Those roles were typically filled by young employees. The technology would then work its way up the organization, and it would eventually reduce the total number of jobs in a company. So first the young people get hurt, and then eventually the managers get hurt. But the data is saying something different. So when I get new information, I have no choice. I've got to change my mind. The number of software engineers being hired right now has been increasing. The number of open software engineer roles is growing as well. Now, the number of new college grads who get hired has increased 5.6 % over the last 12 months.

1:06It's a narrative violation. And the unemployment level for people age 20 to 24 years old who have a college degree, that's fallen from nearly 9 % to almost 5 % as well. The Wall Street Journal recently wrote that AI created 640 ,000 jobs between 2023 and 2025 in the US, according to LinkedIn. And now we know that new white collar positions such as head of AI and AI engineers are a big part of that. And I'm starting to see some of this happen in companies throughout our portfolio. They're aggressively hiring to keep up with the demand for their products and services. So if AI can make employees more productive, which is widely accepted as fact, I don't think that's controversial at all, then companies are going to want as many productive units of labor as possible.

1:50If it makes you more productive, I want more employees. It's a key reason why I'm changing my mind. AI appears to be a magical technology that's going to make companies more productive and more profitable. The net result is going to be more corporations, more startups, and more jobs. All three of those things, more corporations, more startups, and more jobs, all three of them are big positive wins for the American economy. Now, when I tweeted that I was changing my mind recently. I was shocked at how many people agree with my new perspective. Palantir co-founder Joe Lonsdale. He loves the positive impact on America.

2:23Marc Andreessen said, this is the way. Box CEO Aaron Levy said, the better AI gets at performing tasks, the more companies can take on those tasks, which leads to hiring more people to do the surrounding work of those tasks. And Zynga founder Marc Pincus said, I share this view that AI is and will be the biggest job generator the world has ever seen. Now, some of you may wonder how to reconcile this epiphany that I've had with the various headlines that you're reading of companies laying off so many employees. The short answer is that companies are using AI as an excuse. They don't wanna admit it, but it is an excuse.

2:59They aren't actually letting people go because of AI or because AI's taken those people's jobs. Steven Sanofsky put it perfectly. He said to me, the layoffs are clearly still all about over-hiring and under-managing. The demand for labor is going to skyrocket as companies learn what AI does, just as the demand for labor increased as computing diffused through product and service delivery. This is why everyone is sinking so much money into the AI industry. Whoever wins, whatever company it is, whoever wins that race to provide the hardware and software to every company on earth, they're going to be worth trillions of dollars.

3:35There may literally be no bigger addressable market in the world than selling low-cost, high-value intelligence to millions of companies and billions of people. The model companies like OpenAI, Anthropic, etc., they get most of the coverage. And they're getting the coverage because, frankly, there's unlimited demand for their products. They deserve to be in the news every day. Anthropic added$11 billion in annualized revenue in a single month. That is absurd. I've never heard of that before. OpenAI and Microsoft, they just renegotiated their deal so that it's a non-exclusive for open AI. That's a sign to me of just how many enterprises are banging down the door for this technology.

4:13But people are confused on how companies are adopting AI though. This is another area where I've changed my mind. Let's take BasePower in Texas as an example. One of their co-founders recently tweeted the following. In the span of approximately three months, the team at BasePower has built out operational tools that replace or avoid the purchase of an enormous amount of SaaS software. Token costs might actually equal the cost of buying the SaaS, But cost isn't the point. It's the fact that the tools are perfectly tailored to our operations, infinitely customizable going forward, and tied into our data.

4:48He gave a couple of examples. Warehouse management systems, manufacturing execution systems, a CRM for B2B sales, a material requirements planning, sales and operations planning tool, a labor crew management forecasting and associated vehicles tool, policy objectives and stakeholders tracker, and countless dashboards for each team. Jason says that the impact for AI has had on our business is incredible. I thought it was all about cost, but now it's very obvious. It's not just about using AI to get cost savings. Instead, it's also about how customizable and how it ties into your system. Some companies aren't just gonna do what everyone else is doing though either.

5:28They're not just going to license the models from the big model companies. They would rather become a model company themselves. Revolut's a good example of this. They recently announced that they have created a foundation model for finance using all the various transactions, trades, and data from their platform. That type of training data that they had access to is an incredible advantage in creating a foundation model. So that brings me to the question, where should you invest to benefit from the AI revolution? How do you make money from this trend? Personally, I think that you've got to go deep into the trend.

6:00You have to go deep into the vertical integration. Find the things that make AI work. It's not just about the model companies, but it's the data centers, the power providers, photonics, chemicals, et cetera. That's where the real value is going to be captured. We have seen the semiconductor companies run in the public market, but what do you think is gonna happen to the other component providers in the coming months and years? Jordy Visser has been all over this. He's essentially looking for, where is there an overlap between the AI industry and some sort of commodity or input that has a shortage.

6:33Whenever you can find something that has way too much demand and not enough supply, economics 101 takes over and the price of that thing is likely to go up. Take a listen to how Jordy explains how he's thinking about this recently. People have to understand that chemicals are used in almost everything, but this massive industrial build out. And this is just the beginning because chemicals are going to be used in the auto upgrade. And just so people hear this, because I've started to talk to more and more institutional investors, we may never sell more cars than we did this year meaning we did 16 million okay maybe next year we'll do 16 we've been around 16 million we got close to 16 million in the 70s so then people go well we're never going to sell more so why would this be important and it's like okay here's what's going to happen and this is big for qualcomm leading edge thing for people here qualcomm's not ready yet but it's getting close if we do 16 million next year a good portion of that 16 million let's assume 1 million this year were AI components, meaning you could speak to the car, the car could do things.

7:35Hey, move the wiper, do this. So Alexa with inside the car, that takes a lot more chips, takes a lot more chemicals for that. Well, next year, maybe we do 4 million. So instead of 0 % growth rate of autos, we're actually doing three, 400 % of AI autos. Smart car. Exactly. And that's what's going to start happening every year. And so what people need to think about with semis is Jensen Yuong saying it's going to be an $85 trillion recycling. Eventually what happens is if we have a hundred million cars owned in this country, which is less than there is, but if we have a hundred million, by the time we get five years out, maybe 80 of them are AI because no one's going to want the older models.

8:15So that process is a lot more dollars that goes in the semiconductor. This is endless, the upgrade cycle, and this is happening fast. So that's where chemicals fit in. Now, my big takeaway from this is that Geordi understands you have to go behind the AI. You've got to go to those data centers, power providers, photonics, chemicals, and much more. But to me, I think that people need to understand a very key component of this. There's a brand new industrial revolution. We are going to commoditize intelligence, and then we are going to push it into every corner of the economy, into every company, and into the hands of billions of people globally.

8:51In order to do that, we have to lay all of the infrastructure for AI to be successful. That means that we are going to have to build hardware. We are going to have to build connectivity. We are literally going to beam the internet down from satellites. We are going to have to increase capacity, both in terms of the ability to get the intelligence into the world, but we're also going to have to increase the capacity on our devices and where we consume the AI technology. And then last but not least is we are going to have an explosion of corporations and startups. We are going to see capitalism thrive in a way that we have not seen in a long time.

9:27The industrial revolution that we are standing at the doorstep of is likely going to drive trillions of dollars of economic value into the hands of companies, both in the public market and private market. And you as an investor, your job is to figure out where can I take my earned capital and go and put it into the market? My guess is a great framework to use this is similar to what Jordy talks about is find where is AI going? And then how can I figure out all of the components, the inputs and the scarcity commodities? Go and find those things, buy them and hold them. And then likely as demand continues to increase for AI and these things have trouble actually fulfilling that demand, the price will skyrocket.

10:12And you as an investor holding that asset, you're going to benefit. It's not rocket science. It's simply supply and demand. And I think that a lot of folks, myself included, misunderstood some of the details of the AI trend. But now that I understand that it's actually going to create more jobs, that it's all about customization and tying into your data rather than just cost savings, that tells me that actually more people are going to want AI than I previously thought. It makes me more bullish on the technology and on the sector. and it means that more dollars of mine are gonna flow into these companies and these opportunities.

10:47Because when you see a trend that is going to revolutionize my life, your life, the United States of America and the world, the only thing you can do is participate. Because if you're caught sitting on the sidelines, then you're likely not only to miss out on major gains in your investment portfolio, but you're also likely to end up putting your capital into businesses that are at risk of being disrupted by the very technology that you opted out of investing in. That's it for today's show. Thank you guys so much for watching. Please remember to subscribe on YouTube. We have just over 46 ,000 subscribers and every single one of you that subscribe really means a lot to me.

11:26And I'll see all of you live from the desk of Anthony Pompliano tomorrow.