Derek Martin 🇨🇦

My predictions over the following months: 1. Stock market will get hurt bad when the music stops on data centers, models, and chips. Too much froth, too high of investment, too many companies will fail. The switching costs are low. I don't know how these companies will become profitable. Its a mega bubble. The rest of the economy is already in a deep recession. Real pain will set in when the public markets dive. 2. Power is the bottleneck. AI is burning an absurd amount of power. The cost of electricity is skyrocketing which is making the cost of everyday life more expensive and hurting quality of life. I'm against data centers because of the power, not the water. The grid is extremely fragile and the weakness will be exposed in the coming months. 3. Subsidies are skewing the market. AI isn't cheap. The prices to use it are artificially low because of subsidies all the way up the chain. You pay $20 or $200 a month but the true costs are 10x That spread is venture capital money being incinerated at scale. When they raise the price, the users will disappear and investors will hold the bag. 3. A big security breach is coming. A bank, a certain model, something is going to rock our world. People are letting bots log in to their banks, their email and everything else. Big trouble coming. 4. Grokbot is exceptional. Its the first model that is adding significant value to my everyday life. I don't know why anybody would use a different personal assistant. 5. AI is insanely high maintenance Billions are being poured into training the next model. They day it comes out its already behind. China has cheaper electricity and more chips. The chips they bought will be obsolete in 18 months. Companies are stuck paying big money every month to maintain and update all of their AI tools. Its a mess. 6. The power companies will renege on their deals. Political pressure will unwind all the unsustainable power deals these data centers and LLMs have negotiated. Power costs will explode. Then comes the choice: Do we jack up costs for our AI / compute and watch everybody switch to the next model or do we incinerate more VC capital? Nobody wins. 7. Credit will be the first domino to fall. Data centers are already struggling to finance the GPUs over 10 years when they will be obsolete in 18 months. We'll end up with a shit load of half built data centers who can't negotiate power rates or buy chips because nobody will let them borrow money. The money will get cold feet as soon as the markets tank and the show will be over. 8. It'll be a dark, dark period in economic markets. The people who own assets that make real money (real estate or businesses) will win. The people who plan ahead and avoid massive leverage will win. The people with cash on their balance sheet will accumulate more assets and generate exceptional wealth. -- Don't listen to me. I'm just a bear. Not investment advice. Good luck!