{"id":62979,"date":"2024-07-29T11:48:38","date_gmt":"2024-07-29T15:48:38","guid":{"rendered":"https:\/\/www.technologyinvestor.com\/?p=62979"},"modified":"2024-07-29T11:48:38","modified_gmt":"2024-07-29T15:48:38","slug":"the-ai-boom-how-big-who-will-benefit-still-how-to-save-on-your-home-insurance-how-to-live-longer","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=62979","title":{"rendered":"The AI boom? How big? Who will benefit still? How to save on your home insurance. How to live longer."},"content":{"rendered":"<p style=\"text-align: left;\">This is a huge week.<\/p>\n<p style=\"text-align: left;\">Earnings are coming from Microsoft on Tuesday, Meta on Wednesday, and Apple and Amazon on Thursday.<\/p>\n<p style=\"text-align: left;\">They&#8217;re all investing massively in AI generally and chips from Nvidia specifically. How much? We&#8217;ll hear more this week.<\/p>\n<p style=\"text-align: left;\">We hear two stories &#8212; They&#8217;re investing like crazy. The returns from their AI investments are lagging.<\/p>\n<p style=\"text-align: left;\">Surprise. It&#8217;s all new and there have been huge runups already in stock prices.<\/p>\n<p style=\"text-align: left;\">Me? Whenever I loosen up some cash from dividends I invest it in Apple, Amazon and Nvidia.<\/p>\n<p style=\"text-align: left;\">Meantime, the Economist has a piece this week, which includes this chart:<\/p>\n<p style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-62994\" src=\"https:\/\/www.technologyinvestor.com\/wp-content\/uploads\/2024\/07\/When-the-AI-Reolution-comes.jpg\" alt=\"\" width=\"300\" height=\"355\" \/><\/p>\n<p style=\"text-align: left;\">Here are words from the piece.<\/p>\n<p class=\"css-1f0x4sl e1tt35bk0\" style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\"><span data-caps=\"initial\">\u201cT<\/span><small>he risk\u00a0<\/small>of under-investing is dramatically greater than the risk of over-investing,\u201d said Sundar Pichai, the boss of Alphabet, on an earnings call last week. He, like lots of executives nowadays, was talking about artificial intelligence (<small>AI<\/small>). More specifically, he was talking about building more\u00a0<small>AI\u00a0<\/small>data centres to serve the customers of the tech giant\u2019s cloud-computing arm. The sums involved are eye-popping. Alphabet\u2019s capital spending is expected to grow by about half this year, to $48bn. Much of that will be spent on\u00a0<small>AI<\/small>-related gear.<\/p>\n<p class=\"css-1f0x4sl e1tt35bk0\" style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\">Mr Pichai is not alone. New Street Research, a firm of analysts, estimates that Alphabet, Amazon, Meta and Microsoft will\u00a0<a href=\"https:\/\/www.economist.com\/business\/2024\/06\/23\/is-artificial-intelligence-making-big-tech-too-big\" data-analytics=\"in_body:link_1:para_2\">together splurge<\/a>\u00a0$104bn on building\u00a0<small>AI\u00a0<\/small>data centres this year. Add in spending by smaller tech firms and other industries and the total\u00a0<small>AI\u00a0<\/small>data-centre binge between 2023 and 2027 could reach $1.4trn.<\/p>\n<p class=\"css-1f0x4sl e1tt35bk0\" style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\">The scale of this investment, and uncertainty over\u00a0<a href=\"https:\/\/www.economist.com\/finance-and-economics\/2024\/07\/02\/what-happened-to-the-artificial-intelligence-revolution\" data-analytics=\"in_body:link_2:para_3\">if and when it will pay off<\/a>, is giving shareholders the jitters. The day after Alphabet\u2019s results the\u00a0<small>Nasdaq<\/small>, a tech-heavy index,\u00a0fell by 4%,\u00a0the biggest one-day drop since October 2022. This week analysts\u00a0will pore over the quarterly results of Amazon and Microsoft,\u00a0the world\u2019s two biggest cloud companies,\u00a0for clues as to how their\u00a0<small>AI<\/small>\u00a0businesses are faring.<\/p>\n<p class=\"css-1f0x4sl e1tt35bk0\" style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\">For now, the tech giants show little inclination to pare back their investments, as Mr Pichai\u2019s remarks show. That is good news for the myriad suppliers that are benefiting from the boom. Nvidia, a maker of\u00a0<small>AI\u00a0<\/small>chips that in June briefly became the world\u2019s most valuable company, has grabbed most of the headlines. But the\u00a0<small>AI<\/small>\u00a0supply chain is far more sprawling. It spans hundreds of firms, from Taiwanese server manufacturers and Swiss engineering outfits to American power utilities. Many have seen a surge in demand since the launch of Chat<small>GPT<\/small>\u00a0in 2022, and are themselves investing accordingly. In time, supply bottlenecks or waning demand could leave them over-extended.<\/p>\n<p class=\"css-1f0x4sl e1tt35bk0\" style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\"><small>ai<\/small>\u00a0investment can broadly be split into two. Half of it goes to chipmakers, with Nvidia the main beneficiary. The rest is spent on makers of equipment that keeps the chips whirring, ranging from networking gear to cooling systems. To assess the goings-on along the\u00a0<small>ai<\/small>\u00a0supply chain,\u00a0<i>The Economist<\/i>\u00a0has examined a basket of 60-odd such companies. Since the start of 2023 the mean share price of firms in our universe has risen by 106%, compared with a 42% increase in the<small>\u00a0s<\/small>&amp;<small>p<\/small>\u00a0500 index of American stocks (see chart). Over that time their expected sales for 2025 climbed by 14%, on average. That compares with a 1% increase across non-financial firms, excluding tech companies, in the\u00a0<small>S<\/small>&amp;<small>P<\/small>\u00a0500.<\/p>\n<p class=\"css-1f0x4sl e1tt35bk0\" style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\">The biggest gainers were chipmakers and server manufacturers&#8230; Nvidia accounted for almost a third of the rise in the group\u2019s expected sales. It is forecast to sell $105bn of <small>AI\u00a0<\/small>chips and related equipment this year, up from $48bn in its latest fiscal year.\u00a0<small>AMD<\/small>, its nearest rival, will probably sell about $12bn of data-centre chips this year, up from $7bn. In June Broadcom, another chipmaker, said that its quarterly\u00a0<small>AI\u00a0<\/small>revenues jumped by 280%, year on year, to $3.1bn. It helps customers, including cloud providers, design their own chips, and also sells networking equipment. Two weeks later Micron, a maker of memory chips, said its data-centre revenues had also jumped, thanks to soaring\u00a0<small>AI\u00a0<\/small>demand.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\" data-component=\"paragraph\">Companies that make servers are also raking it in. Both Dell and Hewlett Packard Enterprise (<small>hpe<\/small>) said in their most recent earnings calls that sales of\u00a0<small>AI\u00a0<\/small>servers doubled in the past quarter. Foxconn, a Taiwanese manufacturer that assembles lots of Apple\u2019s iPhones, also has a server business. In May it said its\u00a0<small>AI<\/small>\u00a0sales had tripled over the past year.<\/p>\n<p style=\"text-align: left;\" data-component=\"paragraph\">You can read the entire Economist piece <a href=\"https:\/\/www.economist.com\/business\/2024\/07\/28\/what-are-the-threats-to-the-1trn-artificial-intelligence-boom\" target=\"_blank\" rel=\"noopener\"><strong>here.<\/strong><\/a><\/p>\n<p style=\"text-align: left;\"><span style=\"color: #0000ff;\"><strong>Saving shekels on home insurance<\/strong><\/span><\/p>\n<p style=\"text-align: left;\">My favorite insurance broker, Matt Wood of Metz, Wood in Chatham, NY, tells me there are a few ways to save on your home insurance:<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Install a water cutoff system. Saves on floods. We have Moen. It&#8217;s great.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Have your home monitored by an on-line monitoring service that doesn&#8217;t require a pricey landline.\u00a0 SimpliSafe is an approved alarm provider. It provides\u00a0 centrally monitored fire and burglar alarms. About $1 a day.<\/p>\n<p style=\"text-align: left;\">You get discounts by providing certificates from SimpliSafe and Moen.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Increase your deductibles. You don\u2019t want to treat your insurance as a home maintenance policy for every little thing that goes wrong. Increasing to a $5,000 or $10,000 deductible will result in meaningful savings, and prevent you from having small claims on your record.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Combine your insurance policies. The most significant benefit that insurance companies offer is a portfolio discount for doing all of your insurance policies together.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Work with an independent agent who represents many reputable insurance companies. A good independent agent will monitor your account for any changes, and will be able to move you to another provider if you face a large premium increase or your provider drops out of the market.<\/p>\n<p style=\"text-align: left;\"><span style=\"color: #0000ff;\"><strong>Watch the Olympics streaming<\/strong><\/span><\/p>\n<p style=\"text-align: left;\">You need Peacock Premium Plus for $14. It gets rid of the irksome ads.<\/p>\n<p style=\"text-align: left;\">Subscribe and then cancel. Otherwise you&#8217;ll be billed forever. I use my X1 credit card (now owned by Robinhood) which allows me to create a one-time, single use charge card. Cancels itself after the first charge. Really useful.<\/p>\n<p style=\"text-align: left;\"><span style=\"color: #0000ff;\"><strong>Upcoming immigration crisis<\/strong><\/span><\/p>\n<p style=\"text-align: left;\">Venezuela&#8217;s Maduro faked his re-election this weekend. Surprise. Surprise.<\/p>\n<p style=\"text-align: left;\">A quarter of Venezuela have already left. With this fraud, another quarter may leave, Many will arrive at our southern border.<\/p>\n<p style=\"text-align: left;\">Back in April the New York Times wrote:<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">It&#8217;s a stark illustration of the limits of American leverage. Dictators do dictatorship, whether they are under U.S. sanctions or not. In many cases, sanctions tighten their grip on power. There simply aren&#8217;t many sharp tools in the diplomatic toolbox for changing another country&#8217;s politics. Individual sanctions on people in the Maduro regime would avoid the widespread collateral damage, but many of them are already on the sanctions list.<\/p>\n<p style=\"text-align: left;\"><span style=\"color: #0000ff;\"><strong>Favorite cartoons<\/strong><\/span><\/p>\n<p style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-62985\" src=\"https:\/\/www.technologyinvestor.com\/wp-content\/uploads\/2024\/07\/Wells-Fargo.jpg\" alt=\"\" width=\"325\" height=\"190\" \/><\/p>\n<p style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-62986\" src=\"https:\/\/www.technologyinvestor.com\/wp-content\/uploads\/2024\/07\/solar-panels.jpg\" alt=\"\" width=\"325\" height=\"430\" \/><\/p>\n<p style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-62987\" src=\"https:\/\/www.technologyinvestor.com\/wp-content\/uploads\/2024\/07\/no-fly.jpg\" alt=\"\" width=\"275\" height=\"298\" \/><\/p>\n<p style=\"text-align: left;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-62988\" src=\"https:\/\/www.technologyinvestor.com\/wp-content\/uploads\/2024\/07\/OnLine.jpg\" alt=\"\" width=\"300\" height=\"401\" \/><\/p>\n<p style=\"text-align: left;\"><span style=\"color: #0000ff;\"><strong>Same old stuff<\/strong><\/span><\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ My friends are falling and breaking bones. They end up in hospital. And hospital is miserable.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Many friends carry their stuff in bags. They should carry their stuff in backpacks, like their grandchildren<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Putting your heavy stuff into an airline&#8217;s overhead rack is a recipe for a thrown back. Ask one of the young fit men to help. That&#8217;s why God made them.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Your family doctor knows diddly squat about moles on your skin. Go to a dermatologist. I had a friend whose family doctor told him that the mole\u00a0 on his back was fine. He died six months later from melanoma.<\/p>\n<p style=\"padding-left: 40px; text-align: left;\">+ Three things will kill you &#8212; eating too much, not exercising and stressing over Nvidia&#8217;s stock. Sadly you have to wait until Nvidia&#8217;s net earnings report.<\/p>\n<p style=\"text-align: left;\">That&#8217;s it for today. I&#8217;m going to the Olympics on Wednesday. &#8212; <em>Harry Newton<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This is a huge week. Earnings are coming from Microsoft on Tuesday, Meta on Wednesday, and Apple and Amazon on Thursday. They&#8217;re all investing massively in AI generally and chips from Nvidia specifically. How much? We&#8217;ll hear more this week. We hear two stories &#8212; They&#8217;re investing like crazy. The returns from their AI investments [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-62979","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/62979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=62979"}],"version-history":[{"count":19,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/62979\/revisions"}],"predecessor-version":[{"id":63005,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/62979\/revisions\/63005"}],"wp:attachment":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=62979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=62979"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=62979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}