Microsoft Is Spending $100 Billion To Build An AI Super Computer
TLDRIn this episode of the Joseph Carlson show, the host discusses Microsoft's rumored $100 billion investment in Stargate, an AI supercomputer project in partnership with OpenAI. The show also covers Amazon's decision to abandon its Just Walk Out technology in favor of traditional shopping carts with scanners. Additionally, the host shares his views on the ongoing Disney shareholder vote regarding board seats for Tron Partners and Nelson Peltz, criticizing Disney's management and underperformance. Finally, the episode touches on Steve Eisman's CNBC appearance, where he argues against Federal Reserve interest rate cuts, fearing potential bubble territory.
Takeaways
- 🚀 Microsoft is reportedly considering a $100 billion investment with OpenAI to create a supercomputer named Stargate, which would be a significant leap from their previous expenditures.
- 📈 The Joseph Carlson show's Story Fund has seen substantial gains, with a year-to-date return of 17.5%, outperforming the QQQ and S&P 500 indexes.
- 📊 The success of the Story Fund can be attributed to holding onto stocks like Amazon and Netflix during challenging times, demonstrating the importance of patience and resilience in investment.
- 🛒 Amazon has decided to abandon its 'Just Walk Out' technology, shifting towards a more traditional shopping experience with scanned carts instead of cashier-less checkouts.
- 💡 The narrative that Amazon's 'Just Walk Out' technology was entirely dependent on manual labor in India is misleading; AI was the primary system, with human oversight for quality control.
- 🎭 Disney shareholders are currently voting on whether to elect members of Trion Partners to the board, following criticism from Nelson Peltz about the company's performance and management.
- 🏆 Bob Iger's leadership at Disney has been questioned, with the company's stock performance lagging behind the market and competitors like Netflix over the past decade.
- 🤝 The addition of Nelson Peltz to Disney's board could bring much-needed accountability and a fresh perspective to the company's management strategy.
- 💭 Steve Eisman, known for his role in 'The Big Short', argues that the Federal Reserve should maintain current interest rates to avoid creating a potential bubble in the stock market.
- 🌐 The Federal Reserve's dovish monetary policy is considered favorable for asset growth, making it a beneficial time for investors holding assets.
Q & A
What is the significance of Microsoft's potential $100 billion investment in Stargate with OpenAI?
-The significance of this investment lies in the potential creation of a supercomputer that could significantly advance AI capabilities. It would be a massive, unprecedented investment that could push the boundaries of AI technology, potentially leading to breakthroughs in various fields. However, it also raises concerns about the risks involved and the return on investment, given that it exceeds Microsoft's annual free cash flow and is several times more than their current data centers' costs.
How does the Joseph Carlson show host view the news about Amazon's Just Walk Out technology?
-The host views the news about Amazon's Just Walk Out technology as misleading, especially the popular tweets that claim the system was solely powered by low-paid workers in India. The host argues that these tweets are inaccurate and sensationalized, as the Just Walk Out technology was primarily powered by AI, with human reviews used to improve the AI system, a common practice in the industry.
What is the current situation regarding the Disney shareholders' vote on electing Trion and one of their members to the board?
-The current situation is that there is an ongoing proxy fight between Disney's executive team and Trion Partners, led by Nelson Pelts, who is seeking a seat on the board. Disney's team is reportedly trying to influence the vote by leaking information about their supposed lead in the vote, which is seen as unfair and potentially illegal.
How has Bob Iger's leadership impacted Disney's performance over the past decade?
-Under Bob Iger's leadership, Disney's stock has significantly underperformed the market, with a 51% increase over 10 years compared to the S&P 500's 180%. The host argues that Iger's decisions, such as licensing Disney's content to Netflix, have contributed to the rise of competitors like Netflix and have not yielded strong returns for shareholders.
What is the host's stance on the Federal Reserve's potential interest rate cuts this year?
-The host agrees with Steve Eisman's perspective that there should be no Fed cuts this year. The host believes that the financial markets are doing well and that lowering interest rates could lead to a bubble, which could be problematic. The host also suggests that the Fed's dovish nature is already priced into the market, contributing to the stock market's positive performance.
What is the host's portfolio performance update?
-The host's portfolio, the Story Fund, has seen significant gains, with a year-to-date return of 17.5%, outperforming the QQQ and the S&P 500. The host attributes this success to holding onto stocks like Amazon and Netflix during difficult times, which eventually recovered and contributed to substantial returns.
What is the context behind Microsoft's potential investment in Stargate?
-The context is that Microsoft is considering a massive investment in Stargate, a supercomputer project in collaboration with OpenAI. This investment is rumored to be more than the company's entire capital expenditure for the last year and is intended to support OpenAI models, potentially including the training of successor models to GPT-4.
How does the host address the criticism of Amazon's Just Walk Out technology on social media?
-The host criticizes the social media narrative that Amazon's Just Walk Out technology was not powered by AI but by low-paid workers in India. The host argues that this is a misrepresentation and that the system was primarily AI-driven, with human oversight used to enhance the AI's performance.
What is the host's opinion on the role of the board of directors in a company?
-The host believes that the board of directors should work on behalf of the shareholders to ensure that the company's executives are held accountable and that the company's actions align with the shareholders' best interests.
What is the host's view on the potential impact of interest rate cuts on the stock market?
-The host agrees with Steve Eisman's view that if the Federal Reserve lowers interest rates, it could lead to a stock market bubble. The host is concerned that such a bubble could be problematic and prefers stock market growth driven by company performance rather than investor speculation.
What is the host's strategy for investing in stocks?
-The host prefers to invest in stocks based on their organic growth, earnings, and cash flow improvements. The host does not support the idea of stocks increasing in value solely due to investor speculation, which could lead to a bubble and subsequent market crash.
How does the host describe the role of accountability in the management of a company?
-The host believes that accountability is crucial in company management, as it ensures that executives are held responsible for their actions and decisions. The host supports the involvement of activist investors like Nelson Pelts to bring accountability to companies like Disney.
Outlines
📰 Market News and Portfolio Update
The paragraph discusses various market news updates including Microsoft's potential $100 billion investment in a supercomputer with Open AI, referred to as the Stargate project. It also covers Amazon's decision to abandon its 'Just Walk Out' technology in favor of a traditional shopping cart system with scanning features. Additionally, the host shares insights on his portfolio, the Story Fund, which has seen significant gains by investing in companies like Amazon, Netflix, Google, and Microsoft, despite initial losses due to market fluctuations.
💡 The Importance of Holding During Market Distress
This section emphasizes the importance of not selling off stocks during market downturns. The host explains how holding onto stocks like Netflix and Amazon during their plummeting periods, despite negative sentiment, has resulted in substantial returns. The key takeaway is that research and analysis are important, but sticking with companies through challenging times can yield significant gains in the long run.
🚀 Microsoft's Stargate Supercomputer Investment
The host delves deeper into the rumors of Microsoft's massive $100 billion investment in Stargate, a supercomputer project in collaboration with Open AI. The investment's scale is put into perspective by comparing it to Microsoft's annual free cash flow and previous investments. The host expresses skepticism about the potential returns on such an investment, considering it a significant risk. The discussion also touches on the potential uses of Stargate and the implications for Microsoft's partnership with Open AI.
🛒 Amazon's Pivot from Just Walk Out Technology
The paragraph addresses the misconceptions spread by popular Twitter accounts about Amazon's decision to discontinue its 'Just Walk Out' technology. The host clarifies that the system was primarily AI-powered, with human reviewers in India used to improve the AI model, rather than replace it. The narrative that the technology was solely dependent on manual labor is debunked, highlighting the importance of accurate reporting in financial news.
🎭 Disney Shareholder Vote and Leadership Concerns
The host discusses the ongoing vote among Disney shareholders to elect Trion Partners' Nelson Peltz to the board. The situation highlights the conflict between Disney's executive team, who have been criticized for their management, and an activist investor seeking greater accountability. The host expresses support for Peltz's involvement, citing Bob Iger's questionable decisions over the past decade that have led to Disney lagging behind competitors like Netflix.
📈 Market Analysis and Fed's Interest Rate Decisions
The host shares his agreement with Steve Eisman's perspective on the Federal Reserve's interest rate policies. Eisman argues that the Fed should not cut rates this year, fearing it could lead to a market bubble. The host concurs, noting that the financial markets are already performing well and that rate cuts could exacerbate an overheated market. The discussion underscores the importance of a dovish monetary environment for asset growth and the potential risks of an interest rate-induced bubble.
Mindmap
Keywords
💡Microsoft
💡Stargate
💡OpenAI
💡Amazon
💡Just Walk Out technology
💡Fin Twit
💡Disney
💡Proxy Fight
💡Steve Eisman
💡Federal Reserve
💡Interest Rates
💡Investment
Highlights
Microsoft is reportedly considering a $100 billion investment in a supercomputer project named Stargate in collaboration with OpenAI, which would be a significant moment in AI development.
The speculated expenditure on Stargate is three to four times Microsoft's capital expenditure of the previous year, which stood at $28 billion.
Amazon is discontinuing its 'Just Walk Out' technology, a system that allowed customers to grab items and leave the store without checking out, and is shifting to a traditional shopping cart with scanning technology.
The 'Just Walk Out' technology was misrepresented in popular tweets as being solely operated by thousand of low-paid workers in India, ignoring the AI system that was the core of the operation.
Disney shareholders are currently voting on whether to elect members of Trion Partners, an activist investor group, to the board. Nelson Peltz of Trion has been critical of Disney's board for their lack of accountability and poor stock performance over the past decade.
Bob Iger, Disney's CEO, has made several decisions over the past decade that have allegedly hurt Disney's stock performance, including licensing key content to Netflix, which has since become a major competitor.
The Joseph Carlson show host agrees with Trion Partners' stance on Disney's board, emphasizing the need for accountability and better performance for shareholders.
Steve Eisman, known for his role in 'The Big Short', suggests that the Federal Reserve should not lower interest rates this year, fearing it could lead to a market bubble.
The host of the Joseph Carlson show supports Eisman's view, arguing that the market is already priced in for potential rate cuts and that lowering rates might not necessarily lead to a bubble.
The host's Story Fund portfolio has seen significant gains, outperforming the S&P 500 and QQQ, primarily due to successful investments in Amazon, Netflix, Google, and Microsoft.
The host emphasizes the importance of holding onto stocks during difficult times, as selling during lows would have significantly impacted the returns of the Story Fund portfolio.
Microsoft's potential investment in Stargate is seen as a risky move, but the host trusts Satya Nadella's judgment, given his successful track record with the company.
The host critiques the misleading nature of popular tweets and the impact of misinformation on public perception, especially regarding Amazon's 'Just Walk Out' technology.
The host discusses the importance of accountability in leadership, as exemplified by the proxy fight between Disney and Trion Partners.
The host shares his personal investment strategy, advocating for holding onto stocks that increase in value due to strong company performance rather than market speculation.
The host's perspective on the Federal Reserve's actions is that they are influenced by a dovish倾向, which is favorable for asset value appreciation.
The host concludes the episode by encouraging listeners to try out the Patreon for the Joseph Carlson show, offering a risk-free trial period.