Chapter 8. Predictions for AI.
You can't connect the dots looking forward, you can only connect the dots looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something, your gut, destiny, life, karma, whatever, because believing that the dots will connect down the road will give you the confidence to follow your heart, even when it leads you off the well-worn path. Steve Jobs, co-founder Apple. Let's go back in time for a little thought experiment. Imagine it's January 23rd, 1984, the day before the Macintosh was released.
Or let's jump to July 18th, 2006, the day before the first Tesla Roadster was announced, or January 28th, 2007, the day before the iPhone was released. Imagine how you would feel and how wealthy you would be if you'd had the foresight to invest in Apple or Tesla on any of those days. In fact, let's ask ChatGPT. ChatGPT prompt. How much would $1,000 be worth today if it were invested in Apple on January 1, 1984? How much would $1,000 be worth today if it were invested in 2007 right before the iPhone launch? ChatGPT response. A $1,000 investment in Apple in 1984 would be approximately worth $32,797,104 today. A $1,000 investment in Apple just before the iPhone launch in 2007 would approximately be worth $326,214 today.
If you remember from an earlier chapter, I owned one of the very first Tesla Roadsters. I paid $125,000 for it. and when I purchased that car, I was granted the option to buy 1,000 shares of Tesla stock for what was about $20 a share at the time. When offered the option, I made a major error in judgment because I had limited thinking at the time. At that point in my life, I had always lost money in the stock market, so I told my assistant to sell the shares as soon as they shot up to $30. I figured I would make 50% in one day on my investment. Unfortunately, she didn't understand what I asked for and did not issue a stop-sell order, and the shares sold when they dipped back down to around $15 or so. More importantly, if I still had that stock today, it would be worth well over $2 million.
There are a lot of lessons here, but the most important one was to follow my gut. In my gut, I knew Tesla was going to be an incredibly valuable company, and I had invested in one of their premium products. I let my past experiences with the stock market override the gut feeling, telling me that today was a rare opportunity to invest in the next game-changing company. Today is one of those days for AI, and I don't want you to miss it. Let me explain why. I've been around and in the technology and entertainment industries my entire life. I started coding professionally when I was 16 on Apple II computers. the Atari 400 and Radio Shack TRS-80 computers. I was right in the thick of it and I just didn't get it. Before the internet existed, I started one of the first digital marketing agencies called Digital Cafe. We began that business in 1989 and some of our first clients included 20th Century Fox, Sony, and Columbia TriStar, which no longer exist. When the first website started showing up, I was approached by someone who was in the porn industry.
Now, I wasn't going to work with the porn industry I value my reputation too much, but that's not the point He had a huge library of content that he wanted us to digitize and sell online Forget the industry he was in This guy saw the possibility of digitizing content and selling it online Removing the need for physical distribution Removing the middleman And I didn't get it Later, I started a business with one of the founders of the pop group Information Society, selling royalty-free music on CD-ROMs. I could have taken the strategy from that earlier conversation, digitized our music, and sold it online. But again, I didn't get it. Selling music online is a $29.6 billion business in 2024. I missed out because I wasn't thinking big enough. I was also good friends with the founder of one of the first online video and radio companies, NetRadio. Yes, I have two podcasts now, but I didn't get it at the time. AI is different. AI is an order of magnitude bigger than all of those innovations combined. And I want you to get it. Here's why AI is different. Those earlier trends are results sell music online, move TV and radio online, sell products and services online, but AI isn't a result in itself. It's a multiplier tool for creating new results. For example, NVIDIA, the chip maker whose chips are providing the processing power for all of this new AI innovation, uses its own AI to design new chip technologies. Their stock has skyrocketed 350% in the last year, driven by the AI boom. This is a super exciting time. We're only a year into using and applying AI to business as I write this, and there's so much more to come. Are you getting it? Seriously, I've had multiple chances to be a billionaire and didn't see very obvious signs right in front of my face on multiple occasions.
I have friends who are billionaires. My wife likes to give me a hard time and say, you're a lot smarter than those guys. Don't let it get to you. Now here are some key things to keep in mind and some big ideas that are really important. One, entrepreneurs will continue to innovate, create products, and create value. We live in the world of trillionaire creation. Elon Musk broke the mold on massive wealth creation in a short period of time. We will see individuals who will become trillionaires sooner versus later. One of the things that will enable this is the dramatic move towards open-source software, which interestingly has been led by Meta, Google, Amazon, and Microsoft. They understand how valuable and important it is to crowdsource infrastructure. At the same time, they know how to commercialize and profit from it. Number two, AI will be even more precise and pervasive, affecting every part of life and business in ways the smartphone did.
After the iPhone was launched, the App Store enabled anyone in the world to produce products and distribute them without requiring additional marketing or sales channels. ChatGPT. Prompt, what are the major growth milestones for the Apple App Store? ChatGPT response? One launch, July 10, 2008. The App Store was launched with iOS 2.0, initially featuring 500 apps. Two 1 billion downloads April 23, 2009. Less than a year after its launch, the App Store reached its first billion downloads. Three 100 billion downloads, June 2015. Apple announced at its Worldwide Developers Conference, WWDC, in 2015 that the App Store had surpassed 100 billion downloads. 4. $1.1 trillion in app sales, 2022. Apple announced in 2022 that the App Store reached $1 trillion in annual app sales. The OpenAI custom GPT store launched on January 10th, 2024, will do the same but faster. If you think of AI as a platform for everything else, this is a massive opportunity to create products and monetize IP at an incredibly fast pace. Having said that, regulation is the enemy of innovation and entrepreneurship. So it is our job to keep the woke and socialists away from AI. They will sell fear, and find ways to steal. I include every government, politician, and bureaucrat in that statement.
Do not forget that socialism steals and creates artificial barriers that don't exist in a free and open market society where private property is of utmost importance, as is the protection of intellectual property. Three, higher education will continue to lose its foothold and relevance. This is a big statement, but the tradition of linear education will continue to become unimportant and lose its power and control. Today, universities are increasingly seen as huge and massive scams. They are losing their credibility due to nonsensical woke and socialist mindsets. In many universities, the ratio of bureaucratic administrators to students is two to one. That means the majority of your tuition and tax money is paying for unnecessary overhead and regulation instead of educating kids and teaching them how to learn.
Now, with AI, anyone in the world can learn anything incredibly quickly and become an augmented human by teaming up with AI. People all over the world will be empowered to create new, innovative products and services. Chat GPT. Prompt. How will AI impact higher education? Chat GPT. Response 1. Personalized AI tailors educational content to individual student needs, enhancing learning outcomes. 2. Automated administration. AI automates routine tasks, streamlining administrative processes in higher education. 3. Intelligent tutoring systems. AI-driven systems provide personalized tutoring, offering immediate feedback and support. 4. Enhanced Research Capabilities. AI accelerates data analysis, boosting research efficiency, and enabling new discoveries. 5. Virtual Learning Environments. AI creates more immersive and interactive online learning experiences. 6. Adaptive Assessments. AI designs personalized assessments, offering a more accurate measure of student understanding. 7. Career prediction and guidance. AI analyzes trends to offer personalized career advice, aligning education with job market needs. 8. Ethical and privacy concerns. The use of AI raises important questions about data privacy and the ethical use of technology. 9. Changing Skill. Demands. AI integration into curricula prepares students for a future where AI skills are in high demand. 10. Faculty Roles in Development. Faculty roles evolve towards facilitation and mentoring, with professional development in AI integration. T
he only thing preventing a transformation of our educational systems in the AI era from happening is mindset. If you have a mindset of abundance, creation, and self-sufficiency, along with positive discipline, you can create the next new thing faster and easier than ever, using AI as your partner. 4. The world will get even flatter. Language and culture have been a barrier to expanding a business beyond borders for all of human history. With AI and technologies that already exist, such as HeyGen, language will cease to be a barrier. Today, not a year from or a decade from now, you can use an iPhone Plus AI to take any audio or video and translate it to any language for any market in a few minutes. Soon, you will be able to watch and listen to anyone speaking to you and get real-time translation back and forth from your phone.
ChatGPT Prompt, how will AI enable businesses to expand globally? Give me the top five reasons with a one-sentence explanation of each reason. ChatGPT 1. Language Translation and Localization AI-driven translation services enable businesses to easily localize content and products for different regions, removing language barriers. 2. Market Analysis and Insight. AI can analyze global market trends and consumer behavior in real time, helping businesses make informed decisions about where to expand. 3. Automated Customer Service. With AI chatbots and virtual assistants, companies can offer 24-7 customer support in multiple languages, improving customer satisfaction worldwide. 4. Supply chain optimization. AI algorithms can predict demand, optimize inventory, and improve logistics, making global supply chains more efficient and responsive. 5. Targeted marketing and personalization. AI tools can analyze global consumer data to personalize marketing efforts and target potential customers in specific regions more effectively. 5. Robotics will happen sooner versus later.
All the technology and information gathered from virtually everything everywhere, including cars, will soon be used to drive robots. Robotic systems will learn by watching and listening to every video and audio that exists. This also means that sophisticated filtration systems will need to be built to keep garbage out of the learning system. NVIDIA is developing the chips that run AI-driven smart robots in factories for companies like BMW. They also built the AI training platform to train robots to do a job like move parts around a factory floor. Tesla sees its cars as robots with wheels, and it has developed humanoid robots called Optimus.
Think an early version of C-3PO from Star Wars. Elon Musk said he believes that robots will create a fundamental transformation for civilization that will lead to a future of abundance, where you can have whatever you want in terms of products and services. He thinks robots will help millions of people and boost economic output by two orders of magnitude. He believes robots will outnumber humans soon. Chat GPT Prompt. I want you to calculate the cost per hour of a robot that I would lease for $1,000 per month and how much money I would save against a $20 per hour employee that could work 24 hours a day, 7 days a week for 30 days. Show me the costs of what a human employee would cost per hour versus the robot cost per hour. ChatGPT response. To calculate the cost per hour of the robot and compare it with the cost per hour of a human employee who could work 24 hours a day for 30 days, we will start by breaking down each cost. Robot costs. Lease cost per month, $1,000. Total hours in a month. Cost per hour for robot. Human employee costs. Hourly wage, 20-tier hour. Total hours in a month. As stated, 24 hours a day for 30 days, which is 720 hours. Total monthly wage for human employee. Cost per hour for human employee, 20 hour. Now let's do the math to find the cost per hour for both the robot and the human employee and calculate the savings. The cost analysis yields the following results. Robot costs. Cost per hour for Robot 139, rounded from 138.89. Human employee costs. Cost per hour for human employee $20. Savings. Savings per hour by using the Robot 1861, thus leasing a robot for $1,000 per month would cost you approximately $139 per hour, significantly lower than the $20 per hour cost of a human employee capable of working 24 hours a day for 30 days. The savings by opting for the robot instead of a human employee would be about $18.61 per hour.
This analysis shows a substantial cost advantage in favor of the robot for continuous, around-the-clock work. ChatGPT. Prompt. Now tell me how much I would be paying the human for the equivalent amount of time, and also include other expenses, which might include taxes and potential liabilities that I would have to pay for any other state, local, or federal taxes? ChatGPT. Response. To determine the total cost of employing a human for the same amount of time as the robot, including additional expenses such as taxes and potential liabilities, we need to consider several factors.
Typically, for an employer in the United States, these additional costs can include but are not limited to. 1. Social Security and Medicare, FICA. Employers are required to pay 6.2% for Social Security and 1.45% for Medicare on the first $140,800 of the employee's wages. As of my last update in 2023, this threshold may have increased. 2. Federal Unemployment Tax, FUTA. Employers pay FUTA tax at a rate of 6% on the first $7,000 of income per employee. However, they can receive a credit of up to 5.4% for state unemployment taxes, potentially lowering the FUTA rate to 0.6%. 3. State Unemployment Taxes, SUTA. Rates vary by state and by the employer's claim history, but expect a general range. 4. Workers' Compensation Insurance. Rates vary by state and occupation. This insurance covers medical expenses and a portion of lost wages for employees who become injured or ill on the job. 5. Health insurance and benefits. If offered, the cost can vary widely depending on the plan. Human employee total cost calculation. For simplicity, let's assume an average cost for additional expenses as a percentage of the total wage. These expenses can typically add an additional 20% to 30% on top of the base wages, depending on the factors above and the employer's specific circumstances. Let's calculate the total cost of employing a human worker for 720 hours a month at $20 per hour, including an additional 25% for taxes and potential liabilities. Base monthly wage, Additional expenses rate, 25%. Total monthly cost for human employee, base monthly wage, plus base monthly wage times additional expenses rate. Let's do the math. The total cost of employing a human for the equivalent amount of time, 720 hours a month, at a $20 per hour wage, factoring in an additional 25% for taxes and potential liabilities, would be $18,000 per month. This calculation underscores the significant cost difference when comparing the leasing of a robot to employing a human for continuous around-the-clock work, not only in direct wages but also when considering the additional financial responsibilities that come with human employees.
This means there will be more robots and automations in the physical world soon, and I know it's completely unrealistic to say that we are going to ask a human to work 24 hours a day, 7 days a week, 30 days in a row. Still, think about the increase in productivity and value that could be created by having 5 robots that each cost you $1,000 per month and how much wealth you could create personally with them. Your combined cost per hour would be less than $10. This will reshape society and what it is we value dramatically. Number six, mental health issues will continue to grow. It's my opinion that most people are simply not ready to deal with these rapid changes. I read recently that AI is going to obliterate the service industry where 40% of service engagements are predicted to change or be lost. Training will be mismatched because a lot of capabilities and skills are going to be made irrelevant due to AI. Historically, new development and technology actually create more net jobs that are higher paying. In the meantime, there's going to be a whole bunch of people who don't know what to do or where to go. And if you think we have issues with addiction now, get ready for drug addiction and sex addiction to explode as technologies like 3D augmented reality become even better and hit our dopamine systems hard. We know the Facebook like button was a dopamine hit. Imagine being able to put on a set of goggles and visually turn your wife into Scarlett Johansson. For people struggling with sex and porn addiction, the lines between reality and the AI-created virtual world are going to be hard to see. And that's just one example. People are going to need help. That translates into huge opportunities to create mental health solutions using the best of AI. 7. Unimaginable new products are going to be created in every marketplace with AI as a partner. That also means massive discoveries will be made in medicine and health, food production, energy storage, transportation and logistics and more. I already told you that NVIDIA used its own AI to design new chips. They were able to decrease the time required to lay out a new chip design by 30x. At the same time, the AI-designed chips beat human designs in key performance measures. So basically, NVIDIA can innovate 30 times faster than anyone else. Companies that leverage AI to work on their business and to innovate will be hard, maybe impossible, to catch.
That's why you need to get started now. 8. AI for personalization will continue to rapidly transform every industry. Your intelligent clone will be able to sit in meetings, answer questions for you, and learn in real time for you. It will be able to report and communicate to you so that you can effectively be in 5 or 10 places simultaneously. ChatGPT prompt. How many hours is it estimated that the average worker spends in meetings? In the future, will AI be able to attend meetings for workers, and if so, how much time and money will that save? ChatGPT response. The amount of time the average worker spends in meetings varies significantly depending on the industry, job role, and level of seniority. However, several surveys and studies have suggested that many professionals spend a substantial portion of their work week in meetings. For instance, a 2019 study by Doodle in their State of Meetings report found that professionals spend roughly three hours per week in meetings, though this number can be much higher for managers and executives. Other reports and surveys suggest that the number could be as high as 5-10 hours per week or more, especially for those in higher management roles.
The future potential for AI to attend meetings on behalf of workers is an intriguing prospect. AI technologies are advancing rapidly, and there are several ways in which AI could participate in or facilitate meetings. 1. Meeting summarization. AI can already transcribe meetings in real time and provide summaries highlighting action items, decisions, and key points. This can reduce the need for all participants to be present throughout the entire meeting. 2. Automated Decision-Making and Reporting. For meetings that involve routine updates or decision-making based on data, AI systems could present reports, make recommendations, or even make decisions based on predefined criteria, thus reducing the need for human attendance. 3. Virtual participation and representation. AI could represent individuals in meetings by providing inputs based on the person's previous decisions, preferences, and available data. It could ask questions, raise concerns, or give approvals based on the person's known viewpoints and information in their absence. 4. Scheduling and time management. AI can optimize meeting times, durations, and participants, ensuring that meetings are only held when necessary and with the most relevant attendees, potentially reducing the overall number of meetings. Regarding the potential time and cost savings, if AI could effectively attend meetings on behalf of workers or make certain meetings unnecessary, the savings could be substantial.
Assuming an average worker spends about five hours per week in meetings, AI could reduce this by even 50%, saving 2.5 hours per worker per week. For a company with 1,000 employees, that's 2,500 hours per week, or approximately 130,000 hours per year. Considering the average hourly wage in various industries, this could translate into millions of dollars in saved labor costs annually, not to mention the potential for increased productivity and job satisfaction by reallocating time to more critical tasks. The precise impact would depend on the effectiveness of the AI in understanding and participating in the nuanced human interactions that occur in meetings, as well as the willingness of companies and employees to adopt such technologies. That will be a huge boost to your and your team's productivity. And personalization is going to get embedded into everything, including entertainment. By the end of 2024, we will have a personalized movie prompt that will take your input and create a 100% custom, personalized to your tastes, movie in 4K. Every digital interaction will be tailored and personalized for every person. Those who learn how to use these tools as multipliers will become extremely wealthy, extremely quickly. Let's talk about investing. I get exposed to a lot of new businesses and products. As of now, I am no longer investing as a VC in businesses simply because I think many, if not most, are going to be disrupted by AI. That especially goes for platforms.
For example, today I saw a business proposal and investment opportunity for an AI technology platform that I believe will become obsolete as soon as OpenAI, Microsoft, Google, or Meta decide to build it into their existing systems. It's just like the pocket calculator business, which was completely decimated and destroyed by apps as soon as the smartphone was launched and released. We are going to see lots of functionality built into operating systems soon, and the big players will be doing that. However, if you are a founder or business owner in a B2B industry, you have a huge opportunity to leverage your existing platform and customers to create solutions that leverage your proprietary IP. You can create subscription-based services that you can trademark, patent, and protect. You'll then be able to leverage and license those to create recurring revenue. it. That means you can build your business and get paid and use that leverage to innovate and create products, leveraging your unique superpower, unique ability, and zone of genius. For now, I would focus on finding ways to apply your unique intellectual property, developing products around the trillionaire AI mindset, and creating recurring income as a business owner, and founder. It is absolutely possible to build and bootstrap businesses like this quickly, then monetize and prepare them for an exit.
Building and creating businesses and selling them is, and I believe will continue to be, one of the greatest and fastest ways to create massive wealth. By the way, I'm always interested in collaborating with business owners and founders. One of the best ways to get in touch with me is to go to digitalcafe.ai.
