I think Copilot makes me 2x productive at rote stuff like writing tests and - wait for it - less productive at writing complex code. It’s just not very helpful having incorrect suggestions flash across the screen. It’s actually quite distracting. I have turned Copilot off for now.

I mentioned in another post here that I believe that one major reason LLMs aren't ubiquitous right now is inference cost.

I'm going to guess that one major reason Copilot fails at complex code is because it can't read enough of your codebase to suggest complex code. The technical reason is because inference cost is too high right now for very large context queries. Therefore, the major bottleneck is inference cost.

That's why I'm investing in TSMC because we will need a lot more silicon to reduce inference cost.

I imagine a world in which future GPT versions are at least 2x better than GPT4, context size is 100x higher, and inference cost is 100x lower.

> That's why I'm investing in TSMC because we will need a lot more silicon to reduce inference cost.

Or what we really need is another approach to either the hardware problem (more efficient chip designs that may be entirely different from existing ones), or the software problem (more efficient ML core models). The latter is obviously more likely to happen, rather than the former.

It's going to have to be both.

But I don't know who to bet on for solving the software problem. The hardware problem will depend on chip fabs, TSMC, Intel, Samsung. Since I can't buy Samsung stocks easily, I bet mostly on TSMC and a bit of Intel for geopolitics reasons.

There are also chip designers such as Nvidia, AMD, Apple, ARM, etc that will need to solve the inference problem. I'm already invested in Nvidia and Apple. I don't know who else to invest in right now. Many of the AI chip design companies are private and startups.

Great feedback, noted.

I suspect that AI and tech in general are _extremely_ well correlated. Indeed AI is just a subset of tech. Because they are so well correlated, your strategy really does not provide any hedge, you’re just all-in on tech. I’m very bullish on tech as well, but your described strategy makes me worried because I sincerely think you could lose your job and then find that the AI stocks don’t do well. Eg, consider the scenario:

1. We hit sudden limits in computational density, energy efficiency, and energy storage technology

2. We face another AI winter (which happens surprisingly often!)

I don’t know the industry you work in, but for many in tech that could lead to a layoff and then underperforming stocks. I think you can imagine an equivalent scenario for yourself, based on your industry, etc

At least 2 seems unlikely in isolation to me.

almost everyone I know who is somewhat 'digitally-savvy' (and even some others) use GPT for various things. I, as a very early adopter, use llm's of various kinds for more and more things; my conservative estimate is that I do at leat two 'requests' an hour, but obviously ANY real interactive session balloons those requests to bigger and more.

So aside from the fact that LLM's are already used so much in such a short time, I fully expect that as UI's get better, even if everything else stays the same, more and more things will be (subtly) LLM-powered. Because a lot of the stuff I do regularly are super useful to non-techies, and it's just a matter of UX/acclimatization.

For what it's worth, I'm not a 'fan' of what I think is a a pandora's box of sorts, culturally especially. I unironically call mine Gepetto to remind me that I might not be as much in the driver's seat as I'd like, pulling the metaphorical car strings.

okay, sorry about this turning into a glorified blogpost :)

I have 30% in S&P500 for a reason. Maybe you think it's too low?

I do want to consider your scenario:

1. If we hit a limit on chip node tech as you said, all stocks would suffer since advancements in computer chips contributes to all industries.

2. If we face another AI winter, then my job is more safe? Even if I get laid off in my current job, I assume that AI isn't good enough to completely replace me based on your scenario so I at least can find another job.

I think a professional financial planner (which I’m not) would say that 30% is too low, and also advocate holding cash and some bonds. You really have a very aggressive investment portfolio. But personally I don’t mind aggressive investment, and I feel your present allocation may be fine depending on your beliefs and your risk tolerance. Your initial post has this if-I-get-fired/if-I-don’t-get-fired analysis, which I think presents your investments as lower risk than they really are. I think your job and 70% of your investments is going to do whatever tech does. If you still feel ok with that, then I think your allocation is probably matching your beliefs and risk tolerance well.

  Your initial post has this if-I-get-fired/if-I-don’t-get-fired analysis, which I think presents your investments as lower risk than they really are.

The idea is that if I don't get fired, then my job will continue to feed me. If I permanently lose my ability to make money as a software dev, then AI will have taken off and my stocks should now feed me.

As another commenter pointed out, you’re essentially betting heavily on tech, which may or may not work.

But why bother picking individual stocks if you can get lower expenses and higher rebalancing efficiency for your factor tilt by picking a tech ETF instead? You also wouldn’t have to count on Nvidia, Google and the like retaining their top positions forever.

There’s also no guarantee that S&P 500 won’t end up trailing world indices in the near future.

Probably because I don't see other public tech companies right now that can challenge the AI incumbents. None of the AI chip startups looking to challenge Nvidia are public companies. I don't see any potential AI consumer companies that can challenge AI delivery to consumers better than Apple, Microsoft, Google, Amazon can.

Many of the tech companies in the NASDAQ are themselves older, "traditional" tech companies which can be disrupted by AI as well so I don't want to buy into all tech companies.

I might switch to a tech ETF in the future. But right now, I prefer my own picks.

What if you lose your job and your stock? E.g. chipmaker neither wins nor loses, and all the other tech goes down or doesn't rise because some other, new, challenger takes the market.

If I'm so unlucky that I get no hits in my picks, I get replaced by an AI, then hopefully the 30% in S&P500 will continue to feed me. :D

Or I will just utilize the powerful AI that replaced me at my job to earn a living as a solo creator.

I do think that if an AI is powerful that it can replace me as a software dev, it should boost the stock market well beyond any 2024 bubble.

Excuse my ignorance about stocks. Do you get some dividends or would you sell at the event of getting replaced by AI and live off that / reinvest?

You sell some to pay for your living expenses and sell some to move into fixed income for some guaranteed income. You rebalance your portfolio by your risk tolerance and your current needs.

How would this make sense if the market is a bubble? Bubbles pop by definition and you end up losing everything? Not sure what it has to do with your employment.

You can view your skills as an asset, and balance your investments accordingly.

"Lose everything" is a wild stretch. They have 30% in a moderately broad fund. They have a chunk in companies that are still doing non-ai things, then their first part is chip manufacturers. AI could disappear and people would still need computers.

Because if AI is good enough to permanently end my software dev job, it should be valued much much much higher than the stock market today.

I imagine a world where anyone has an AI powerful enough to make apps that used to require a full team of professional software developers and do so much quicker. If we get to that world, I don't see how the stock market wouldn't be significantly higher than today, even if it's in a bubble today.