The Nostradamus of AI didn’t see this coming

Whoops, there goes $35 billion. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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This is Bloomberg Opinion Today, the emanating humanity of Bloomberg Opinion’s opinions. On Sundays, we look at the major themes of the week past and how they will define the week ahead. Sign up for the daily newsletter here. Subscribe to Bloomberg.com for unlimited access to all our coverage. Wiser Time The events of this month have made me a wiser and stronger investor. My daughter is currently on a girls-only Mediterranean beach vacation in, naturally, Albania(?!). No, she isn’t planning on scouting for island takeovers by Jared Kushner. At least as far I know. Anyway, my role in this adventure was to cat-sit for Cat Max, the blind domestic shorthair she inherited from my father (don’t ask). I’m not really a cat person, but I admit he’s a pretty impressive animal, just so long as you don’t move the furniture around. The worst part about having a cat, of course, is the cat food. That wet Fancy Feast is just about the foulest looking and smelling thing I can imagine, and I’ve eaten haggis. I joke a bit around here about being reduced to penury and Friskies in my dotage, but that no longer seems funny. Or unrealistic. So I consulted one of my two unofficial, unpaid investment advisers (ChatGPT, not Nir Kaissar, unfortunately), moved some stuff from ETFs I don’t understand into something called a bond ladder (which I also don’t understand), and voila, I’m going to ride off into the sunset with my saddlebags full of gold. Simply put: The events of this month have made me a wiser and stronger investor. Has a nice ring to it, right? That’s cuz I stole it from this guy: The difference is that while I was taking investment advice from a bot, he was losing his investors $35 billion. Not sure he priced that in, virtually or literally. What also differentiates me from Leopold Aschenbrenner, billionaire founder of the hedge fund Situational Awareness, is that when I lose my retirement pittance nobody will bail me out (not even Cat Max), yet when he lost his investors billions, he got bailed out by Ken Griffin. It gets even better: “Just days after his hedge fund was on the brink of collapse, Leopold Aschenbrenner has made his return to the investing scene, plunking down $400 million to back a privately held company,” Bloomberg News reports. And Matt Levine’s take is ... “Good for him”???? “Being smart and plugged-in about the long-term rise of artificial intelligence is a pretty good investing strategy, but doing it in a hedge fund with lots of borrowed money that can be called away at any time is a bad funding strategy,” Matt explains. “But he learned both parts of the lesson: no more leverage, but still full speed ahead on venture capital.” John Authers thinks that Aschenbrenner’s nickhame, the Nostradamus of AI, was spot on. “We now know that Aschenbrenner called most of the advances of the last two years with uncanny accuracy,” John writes. “He also proved that he could see what was happening well enough to profit from it in real time.” Then came the Greek chorus: “He juiced up his returns with leverage. And that was hubris.” We non-soothsayers may find it puzzling that a fund with a reported return of 439% could have crashed so quickly and so spectacularly. Aaron Brown turns that logic on its head. “The easy story is another tech wunderkind flying too close to the sun,” he writes. “The more useful one is that the 439% return was a warning, not a triumph.” Paul J. Davies warns of a trickle-down effect: “Hedge fund professionals and mom-and-pop traders all loaded up on debt this year to turbocharge investments in companies expected to benefit from the AI boom, such as chipmakers, cloud-computing hyperscalers and equipment makers.” While the moms and pops are probably headed down the pet-food aisle, Aschenbrenner was headed down the marriage one.[1] If Aschenbrenner was talking a big game while simultaneously making it a wee bit tough for investors to know what was going on behind the curtain, he’s hardly alone. As Beth Kowitt points out, lots of moguls are talking more, but may not be telling us much. “Meta Platforms Inc.‘s Mark Zuckerberg broke three years of silence on X to announce the launch of a new AI model. Nvidia Corp.’s Jensen Huang signed up for the platform to share an open letter in support of an open artificial intelligence ecosystem,” she writes. Gary Cohn, the former Goldman Sachs boss, thinks that this new loquaciousness shows there’s no need for quarterly reporting. Not so fast, says Beth: “All this CEO chatter is not the same thing as disclosure, and it’s a mistake to confuse the two. Rather, it’s selective storytelling, designed to create a curated narrative about a company or the person running it.” The narrative that Huang is curating these days also involves seared spicy cod roe, grilled pork throat cartilage and $1,900 dinner tabs. “When Nvidia Corp. founder Jensen Huang was in Tokyo last month, the most surprising place he visited wasn’t a chip supplier or even videogame maker Sega Sammy Holdings, but Yakiton Sankichi. The casual eatery is an izakaya, often translated as a Japanese pub,” writes Gearoid Reidy. “Huang’s fans have flocked to Yakiton Sankichi,” adds Gearoid, “which is now apologizing to customers for slow service due to an explosion in popularity. But might his golden touch rub off on the izakaya industry as a whole?”  I guess I can see myself eating cat food one day, but I draw the line at porcine trachea. (Editor’s note: don’t watch this video — or look closely at the below screenshot — if you’re squeamish). Source: Asian BBQ Shimata via YouTube Bonus Wiser Than You Reading: Anthropic Is Teaching CEOs Everywhere a Valuable Lesson: Gautam Mukunda Musk’s Attention Economy Is Slipping Into Recession: Liam Denning Goldman Sacking Sets a Price on ‘Stigma’ From Lawsuits: Chris Hughes What’s the World Got in Store? US CPI, Aug. 12: Lethargic Wage Growth Recalls the Painful Post-2008 Job Market — Jonathan Levin China CPI, Aug. 9: China’s Trade Defiance Will Come at a Cost — Juliana Liu UK GDP, Aug. 13: Burnham’s Social-Care Drive Is Personal for Us All — Rosa Prince Human Being You know who is pricing in AI? Hollywood. And guest columnist Miles Surrey thinks it’s a mistake. “For some filmmakers, AI isn’t a creative revolution as much as a way to package themselves as disruptors and access capital that has become harder to attain,” he writes. “But when this kind of investment focuses on the technology behind these projects, rather than the quality of the films themselves, it risks mistaking a new way to fund movies for a reason audiences will want to watch them.” But does tech necessarily depersonalize art? Catherine Thorbecke found quite the contrary. “I went into an AI film festival in Tokyo last week expecting slop, and left surprised by how much humanity emanated from the screen,” she writes. “My favorite was an 11-minute short from the point of view of a child with a camcorder spending a magical summer with his grandparents. He records his cereal, mermaid sightings and fleeting, sun-drenched images of youth.” Animated but not slop. Source: Runway “Even suggesting that an AI-generated movie might be good tends to draw indignation from filmmakers and cinephiles who still see the technology as an insult to creativity (it can be), a mass heist of intellectual property (no doubt), or a looming threat to artists’ livelihoods (all true),” she adds. “The anger is understandable. We’ve all seen the soulless junk that defines much AI-generated content online. But what happens when the same technology lets actual artists tell stories they couldn’t otherwise afford to make?” It’s a question to chew on — along with braised-liver flavored Friskies, of course. No cats were harmed in the making of this newsletter. Sorce: Archive Photos via Getty Images Note: Please send seared spicy cod roe and feedback to Tobin Harshaw at tharshaw@bloomberg.net. Sign up here and find us on Bluesky, TikTok, Instagram, LinkedIn and Threads. We’re improving your newsletter experience and we’d love your feedback. If something looks off, help us fine-tune your experience by reporting it here. [1] OK, he got married at a "Tuscan-style chateau" in Carmel, California, that probably didn't have an actual aisle, but allow me some license. Follow Us You received this message because you are subscribed to Bloomberg’s Opinion Today newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. 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