WINNER: There’s Nothing Fake About AI’s Hype

Shares of Nvidia soared over the past year as investors found a stock on which to pin their ultimate AI hopes and dreams.

Photo of Open AI's Sam Altman
Photo by TechCrunch via CC BY 2.0

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It’s difficult to know exactly where we are in the arc of artificial intelligence. For every cry of “this thing is on the cusp of destroying humanity,” there also seemed to be some notable screw-up of a fairly elemental task. Such is the hype roller-coaster of early-stage technology.

Hello, Mr. Chips

Regardless of inconsequential metrics like, oh, revenue and profit, there’s no denying that 2023 marked the year that AI went mainstream. Your family members may not know the NYSE from OTC, but it’s a decent bet that somebody’s relative made the standard “well, when AI puts us all out of work…” quip during a holiday gathering.

Yet it’s been hard for investors to consistently find a way to capture that surge in interest — especially with much of the work being done by startups with mere hopes of making a product or device that becomes the iPhone’s answer to AI. On the other hand, there’s Nvidia:

  • Our thoughts and prayers to anyone who did not own shares of Nvidia for most of 2023. Given that the stock has more than tripled this year, there really wasn’t a bad time to buy it — even if you bought the stock six months ago, you’ve still enjoyed a 12% runup.
  • Nvidia was famously anointed one of the Magnificent Seven stocks this year, in large part due to its intractable role in supplying the semiconductors needed for the coming huge buildout in data centers that are the physical braun of AI. Two years ago, Nvidia had annual revenue of $26.9 billion. This year, it’s expected to post revenue of about $59 billion. That’s how you become the sixth-most valuable company in the world.

Sam, I Am: OpenAI’s ChatGPT was undoubtedly the foremost (and maybe only?) AI-associated company that captured consumers’ mindshare. Indeed, it’s striking to see the evidence that our lives can practically be divided into “Before ChatGPT” and “AfterChatGPT.” However, the palace intrigue of Sam Altman’s firing-rehiring as CEO this fall was a fascinating look behind the scenes, as well as a mini-morality play about what happens when a nonprofit sitting on a gold mine is run by your standard, ruthless tech CEO with the support of a major investor (Microsoft). When the dust cleared, Altman was still standing, and the board that initially fired him was not. Always bet on the deep pockets.