The I/O Fund was early to publishing stock analysis that stated AI would be an explosive opportunity. Beth went on record to say that Nvidia will surpass the valuation of Apple, and it has been her stance since November 2018 that AI will bring us a new set of FAANGs, one of which will be Nvidia. Since her callout, Nvidia shares have risen nearly 1,000%, with surging AI demand sending data center revenues to a projected $31 billion in FY24, an impressive 58.8% CAGR from 2018’s $1.93 billion.
In January, Beth was on Real Vision’s 3 Ideas and stated it would take World War 3 to get her to sell her Nvidia position. This was a strong statement at the time, yet Nvidia later led a historic 6-month performance for the Nasdaq with over 200% gains in 2023. Real Vision invited Beth Kindig back for a candid interview with Raoul Pal for a one-hour discussion on how to position for AI. Listen here for the full discussion on why AI is the best investment opportunity of our lifetime.
Watch the full-length 1 hour video on RealVision here.
AI’s Potential Impact on The Economy Will Be Unrivaled
The reason that AI will be the best investment opportunity of our lifetime is because of the impact it will have on GDP. As discussed in the 1-hour interview, the potential of AI to revolutionize nearly every sector, boost productivity, reduce costs, and significantly influence GDP is unparalleled. To be exact, AI is estimated to add up to $15.7 trillion to the global economy by 2030, and drive a market 5x the size of tech’s current global spend.
Later, McKinsey highlighted in June that AI’s total economic impact could be as high as $25 trillion combined, when spanning ML, advanced analytics, generative AI and AI-related worker productivity gains.
Beth points out that the contribution to GDP around the world will be “unlike any technology in modern times” and “infinitely higher than something like mobile.” AI is expected to more than double the GDP of developed countries in Europe, Asia, and the United States, and drive worker productivity as much as 35% higher across those regions.
It’s a trend that will be “4-5x larger than the FAANGs,” and one that will result in massive winners.
To watch the full 1-hour video, click here.
Beth explained to Raoul that “given the numbers we have today, because people like to think of AI as a hype, what I would encourage people to realize is that in 2010, mobile was not a hype, and we’re probably more like 2008 or 2009 right now, in terms of where we are with the vintage of AI and where it’s going to. So just keep all that in mind -- if you believe that mobile would've been the right way to position, then AI certainly will be because it is so much more massive in terms of its contribution.”
Big Tech is Cornering AI, Edging out Startups
In the past, nearly all innovation came from the private markets and smaller teams. There is certainly a lot of innovation in AI still occurring in the private markets, yet AI will not be as democratized as mobile or the internet boom. This is due to the cost of training models, and Big Tech’s 10+ year head start on AI.
Google, Facebook, Amazon, and Microsoft have invested billions into AI development for years and can quickly and effortlessly integrate AI into their established business models. For example, Beth explored in June how AI could drive $100B in revenue for Microsoft by 2027, from OpenAI’s APIs running on Azure, to AI integrations and partnerships via Bing, and the rollout of Copilot, among other drivers.
Beth points out that AI “will be very enterprise driven,” with some consumer overlay, as opposed to mobile’s consumer-driven nature. In that context, “what is really ideal for a stock is if you take a consumer-facing company like Google, and they can inject their AI technology into the ads machine, or Google Search. So they don’t have to go out and try to get lots of consumers to adopt something new, consumers will continue to use Search, it’ll just be improved Search; advertisers will continue to use Google, it’ll just be improved ROI.”
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To watch the full 1-hour video, click here.
