I just unsubscribed from ChatGPT

Many car salesmen are twiddling their thumbs this week.

That’s because cybercriminals hacked 15,000 car dealerships and shut down the company that runs their computer systems.

Salesmen are scribbling deals on scratchpads!

Growth in cybersecurity spending is as close to a guaranteed investing megatrend as it gets.

You can’t run a business without robust cybersecurity. I can’t imagine a future in which CEOs say, “Yeah, cybersecurity isn’t THAT important…”

To borrow a line from Fight Club, “On a long enough timeline, everyone gets hacked.”

Companies will lay off employees and shut down offices before they even consider cutting security spending.

This all but guarantees a never-ending stream of cash will flow into cybersecurity firms’ coffers.

But know this: The individual cybersecurity companies you buy matter a great deal.

Case in point: The largest cybersecurity ETF—the First Trust Nasdaq Cybersecurity ETF (CIBR)—is up about 5% this year. Whereas the only cyber stock we own inside Disruption Investor is up over 50%.

Investing in great businesses profiting from megatrends can help you grow wealthy. This Venn diagram is our North Star in Disruption Investor:

1. The next Steven Spielberg will get started on Dream Machine.

Artificial intelligence (AI) image generators like DALL-E allow you to create all kinds of weird and wonderful pictures with a few clicks.

Now, AI video generators can cook up Hollywood-quality movie scenes in seconds.

I typed “photorealistic closeup video of two pirate ships battling each other as they sail inside a cup of coffee” into a new tool called Dream Machine. What it produced was amazing. I wish I could share the video clip with you.

But you don’t have to take my word for it. Play around with Dream Machine here.

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These video generators are getting so good, so fast… and we’re only on “V1.” This is the worst they’ll ever be. Soon, everyone in Hollywood will use them.

It’s only a matter of time before we have AIs that dream up a brand-new movie idea in seconds… and then tailor-make it just for you.

I’ll be able to type “make me a new Tarantino-style thriller starring a young Denzel Washington, set in 1950s LA”… and watch the movie that evening.

We talked about the new “AI law” a few months ago. Basically, to double the quality of an AI system, you must feed it 10X more data. And the amount of data needed to generate a movie is orders of magnitude more than what’s needed to power a chatbot.

In other words, we’re going to need a lot more data capacity.

Nvidia (NVDA) has been the big winner from the AI spending spree so far. But we’ve shifted our attention to other parts of the data center buildout in Disruption Investor.

2. Claude 3.5 Sonnet from Anthropic is the only AI assistant you should use.

I tested the new model out this morning, and holy cow. It’s significantly better than ChatGPT.

I asked Claude to create an interactive learning game based on Dr. Seuss books for my five-year-old daughter. It designed a functioning game in less than 60 seconds. Here’s what it looks like:

Source: Anthropic

To do this in the past, I would’ve had to pay a coder. Now I just click a few buttons on my laptop, and AI does it for free.

And if I want to change something about the game, I simply prompt Claude to “make it better.”

I can’t remember the last time a technology blew me away like this. Now you can task your AI assistant with various jobs, and it just does them.

I already hit the “unsubscribe” button to ChatGPT.

Folks who still believe AI is a fad simply aren’t paying attention. This is the most important new technology of our lifetimes. It’s bigger than the internet.

As I’ve said many times, you simply must use this tech. And you have no excuse because the best AI tool is free.

I’m excited for AI to disrupt education.

Now, you can turn every single dull textbook page about ancient Greece into an interactive educational game.

As impressive as these AI models are, I wouldn’t invest in Anthropic or ChatGPT creator OpenAI.

AI is advancing so rapidly that today’s state-of-the-art tech is obsolete within a few months. Startups are ploughing heaps of cash into building the latest and greatest models. Then a competitor comes along and dethrones them within months.

AI companies are incinerating O.P.M. (other people’s money)… but that won’t last forever.

You want to own the companies drinking from this firehose of money: The businesses making the chips… servers… and networking equipment powering these AI models. That’s what we’re doing in Disruption Investor.

3. Today’s dose of optimism…

I feel sorry for environmental wingnuts.

They’re refusing to have kids because of what the weather may be like 30 years from now. Here’s one example from UK newspaper The Guardian:

Source: The Guardian

In 1968, Stanford biologist Paul Ehrlich wrote The Population Bomb. He predicted millions of people would soon starve to death due to Earth’s booming population.

The famines never happened. But Ehrlich’s prediction did stop many from having kids, as this sad letter in The Wall Street Journal describes:

Source: The Wall Street Journal

Poor guy. Never listen to a wingnut.

See you Monday.

Stephen McBride
Chief Analyst, RiskHedge

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