Amid the chaos of the markets in recent weeks, an opportunity has presented itself. A chance to get ground-floor entry into the NEXT chapter of the AI story. While everyone is looking the other way. One of the world’s preeminent AI and tech angel investors James Altucher has been all over this in recent weeks. We can finally release his findings here today. Click here to watch. Or read the following essay from James for a bit more background…
Best wishes,
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Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator
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A new “wealth window” is opening now
Hey Aussie friends. It’s James Altucher here.
First and foremost, I want to give you my take on the correction in many AI ‘Phase One’ stocks.
It was bound to happen. It happened to early Internet stocks. And it’s occurring in a period of wider market volatility.
But what it’s done is created an opportunity.
A ‘Wealth Window’, as you can see here.
As we transition to what I call AI 2.0, a new breed of stocks is rising.
And if you can get in on them while everyone is distracted with Trump tariffs and wars and whatnot, you may thank yourself in years to come.
My new talk for Fat Tail Daily readers is aimed at helping you do that. You can watch it here.
The buzz around AI hasn’t abated.
But the main stocks that have benefited so far have fallen back.
This is natural. This always happens.
We are getting past the hype phase. People making claims who have zero tech background and zero real AI experience.
Most of them are just marketers who know nothing about the technology at all. It’s also rubbed me the wrong way in the last year or two how loads of companies jumped on the bandwagon to become “AI companies” and get higher valuations as a result.
It reminds me of the internet boom in the ’90s. A company would add “.com” to its name and suddenly its stock would go up 500%.
When 1-800-Flowers Inc. changed their name to 1800Flowers.com, they filed for an IPO that day.
Because they were no longer a flower store, they were a “.com” company. High-tech flowers! We’ve seen this with AI during its phase one stage.
It irks me because I actually went to grad school and studied AI and built a lot of my career around this technology.
I’ve been working on AI-related stuff since 1987. I’m not going to claim to be the AI expert, but I do know a thing or two about the technology after being immersed in this stuff for decades.
My AI Backstory
I studied Computer Science at Cornell back in the eighties. I met Steve Jobs back then. I even helped work on a chess program called “Chiptest”… which was later bought by IBM and renamed “Deep Blue.”
That program went on to beat chess grandmaster Gary Kasparov. My first published academic paper on AI came out in 1991, and I gave a talk about it at the Conference on Automated Deduction in Kaiserslautern, Germany. I was the youngest person there.
The reason automated deduction is interesting is that every single computer program is mathematically equivalent to proving a logical theorem.
For instance, prove to me that you can sort all the names on a list in alphabetical order. The proof is basically the program that does it.
So if you can prove theorems automatically then you can program computers automatically. I have since worked on AI-based fictional characters, chess computers and AI for day trading. From 2002 to 2009, I day-traded using AI programs I wrote, ran a hedge fund the same way and even wrote a book based on some of my ideas called Trade Like a Hedge Fund.
On my podcast, I’ve discussed AI with Eric Schmidt, former CEO of Google; Kai-Fu Lee, the godfather of speech recognition and now one of the biggest VCs in China; among many others.
And I recently recorded a course about AI for the short-form podcast company, Blinkist, where I went over, step by step, the development of ChatGPT from the beginnings of AI in the ’50s and ‘60s all the way up to now.
I helped create an app on top of ChatGPT, proposalgenie.ai, that helps workers create freelancing proposals for jobs. At a website I created, notepd.com, I fed in about a thousand of my articles and created an AI James. You can use it to generate unique ideas from my point of view.
I recently had Kevin Surace, CEO of a company I am invested in called appvance.ai, on my podcast. Appvance uses AI to look at a large, complicated programs and generate scripts to test the program to see if there are bugs.
According to Kevin, “Every company is now mandated by their boards to use AI in every single part of their company. So if they are a manufacturing company, not only will they use AI to improve their manufacturing but their marketing division has to use AI, their legal division, even their HR division.”
So every company pretty much WILL become an AI company in the not-so distant future!
The point I’m making here is:
I KNOW WHAT I’M TALKING ABOUT HERE
We are at a transition point.
Phase one is moving to phase two.
The ‘hype’ of the last two years is dulling a bit in the investment markets.
AND THAT’S YOUR IN.
But you can’t be looking at the big first movers like Nvidia. They’ve had their exponential growth.
The question is…who is next?
I try, as best I can, to answer that question for you here.
Best,
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James Altucher,
Editor, Investment Network Australia
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