Investors be ready: AI is changing our world faster than society can adapt

[Marcus Auerbach]

Since yesterday a company called Nvidia is valued higher than Apple. Yes, you have read that correctly. 3 Trillion $ market cap. 
Nvidia is now the second biggest company in the US. Ask 10 random people today about Nvidia: 8 will probably tell you they don't know what that is. That is how fast things are changing.

The more I think about this, the more I realize how deep the impact will be on our job market. And anything that happens to the job market impacts our tenants and real estate investing in general. And it is happening faster than we can adapt as a society.

Anyone who works remote is probably going to loose their job in the next couple years to an AI. This is low-hanging fruit for AI, because there is no physical work. Chat GPT3.5 was cute because it could create text. The next step is for AI using multiple software platforms autonomously: booking your family trip based on a few YouTube travel videos you liked, including flights, hotels, car and restaurants,  creating an excel spreadsheet with the agenda and sending emails to all family members with everything they need to know. What used to take you hours, will take seconds.

If you think I am talking about something in the future, you have not kept up the last 8 weeks. 

Watch the presentation of the latest version of ChatGPT4o and if you don't have much time, skip to min 15 where "she" teaches him how to do math. Tell me your kid's teacher is that smooth explaining math! Link.

And if you think it is going to stop there and not reach into the physical world than watch this: Figure1 robot demonstration. Remember this is the worst they will ever be, these things are getting rapidly better. Google CEO estimates that we will see their capabilities double every 12-18 months. Nvidia CEO Jenson Huang is talking about the next wave which is physical AI. They have created a metaverse as a virtual training ground for robots. They can learn how to do physical tasks like assembling a product by trying it a billion times inside a simulation until they have mastered it. And they are adaptive and able to solve unforeseen problems: if a part is to big and does not fit, they will grab a tool and adjust it.

Which means factory jobs are being next.

Since we are talking about paradigm shifts, this will be the biggest of all. And it is happening faster than society can respond.

In my mind, the outcome is pretty predictable. Literally half of the population will be unemployed. Anyone who works remotely or online is first, low-skill manual labor is next, according to the estimate of industry experts within 5 years. So we will go from a record low unemployment rate of 3.8% to a probably never seen before high.

We always say housing is a basic need and therefore we will always have a viable business model. That is probably true, but who is going to pay for it? Do we have to shift to universal basic income just to keep society going?

 People need to eat and pay rent. So many people are worried about a housing market crash like we have seen in 2008 and we know that is not going to happen, at least not in the same way and for similar reasons. But I am worried that we are going to see a lot of turmoil in the next 5-10 years. And I think just like 2008, we are not going to see it coming. We always expect that the future will be the same as the past.