The Asset Class That Survives AI Abundance

So this video is part of a series on AI fundamentals, or us talking through the higher level, bird's eye view dynamics and evolution of artificial intelligence and how it affects you and your decision making for the future. Now in this video, we're talking through the asset class that survives abundance. And that's a slightly on the nose title, but what we're getting at in this one is two things. It's number one, a frame for decision making about what investments to get into due to AI and how you think it may evolve over time, and number two, a descriptive explanation of why some asset classes out there are moving either up or down as they are. So we're going to talk through one idea or one theory or lens or frame, whatever you want to call it, that gives you a tool making a decision making tool, and also can explain some of the behavior of asset classes out there that ties into this idea of, okay, let's say AI makes everyone a lot more productive, what assets still have a lot of value. That's going to be this video. Let's hear a word from the sponsor of this one, and then we'll jump into it. Now most of the AI tools that we cover on this channel are digital, right? They exist on your computer. But this one exists in the real world, and it's part of what I view as the next generation and evolution of AI hardware. And it clips onto your shirt, I'm wearing it right now, and it's about helping you remember more. So the team at Luki is sponsoring this video, and they sent me their L1 to test. The L1 is an AI life memory camera. So basically it's a small wearable camera that captures the selected first-person POV moments hand-free while you go about your day, and then AI organizes those moments into a journal, daily recaps, and even comics and auto-vlogs. And the whole idea is capture, number one, notice, and then relive. And the problem that it's built for is that the moments you typically most want to look back on or re-experience are the ones that you are never actually filming in the moment. And if you do pull out your phone to record those, you're just living your life through that screen instead of being there in the moment. And for this, all you do is you clip it on, you turn on auto-mode, and that's it. It's going to pick up moments from your point of view while your hands and your attention stay in the actual moment. And it is transparent by design, so there is a visible privacy light and system sounds. So people around you do know that it's capturing, and you should always get consents before you film. And then you can open the journal for the day, you can scroll through entries and stop on a detail that you forgot, or look through the daily comic or auto-vlog. And so you get that kind of really cool experience of being able to relive moments that matter to you while still living them in the moment through the journal and those summation of thoughts or cultivation features. Now here's how you can try this all out for yourself. You can go to this link on the screen and then use promo code JONLOOKI, that's J-O-N-L-O-O-K-I. That said, back to the video. So I want to start by talking through the extreme, and then we'll pull it back to a more expected case. But an extreme case for the future is this super intelligent AI starts to do really incredible things. Cure cancer, create endless jobs, make manufacturing super cheap, so you have this abundance of goods, you have abundance of capital, and now you have this universal high-income type of scenario where basically everyone has pretty much everything that they need at least to get by. And then also generally you have a lot more wealth in a society like that. And that's the extreme case. You might not believe in it, or you might not believe that there is a 100% chance that that happens, but you can walk that back in two ways. Number one, you can walk back the outcome, so what degree of abundance is provided, right? Or you can walk back the probability that you get to any one of those outcomes, right? So maybe there's an 80% chance you get insane abundance, 10% chance you get kind of abundance, 5% chance it's a bubble, 5% chance something really bad happens. Now regardless of where you fall on that spectrum, right, there are a lot of people out there and there is a general consensus that there is at least some probability that AI will incur this world of abundance and make a lot of goods and services very cheap and give people essentially more purchasing power for goods and services in their economy. And if people think that way, that is going to regulate in part the prices of assets and the actuality of it. If that actually happens, then that will also really dramatically affect prices of things. So how should you make investment decisions with that future, with that being kind of the setup here for artificial intelligence and abundance? And so I think there are two things to keep in mind here that are important. The first is AI may remove the need, but it won't remove the preference. And number two, there are some things that abundance just doesn't work on, that it cannot make more of or decrease the inherent value of. Let's dive into both of those one at a time. The first is that AI doesn't remove the preference even though it removes the need. And the material example I'll give you there is that of really nice neighborhood. If you make a lot of money and you can live anywhere across the country, that doesn't mean you're actually going to want to live anywhere. You're still probably going to want to live in the same nice neighborhood, the same hundred nice neighborhoods across your country. So even if you get this world of abundance, you can buy a home anywhere. You can work remote, for example, that need is gone of, oh, I just need a place to live. But the preference of, I would like a nicer place to live doesn't change because that's something much more fundamental about the human experience. And then second, there are some things that abundance just doesn't work on. Let's talk about pens. If AI creates this world of abundance, maybe you can start to get really cheap. You can get pens for one cent a pop and you can get iPhones for 20 bucks or an hour of labor, whatever it is, right? Those are goods and services in that case, just goods where you can get a lot more of them. You can get them really cheap if this abundance kind of scenario plays out or just AI kind of incrementally makes manufacturing cheaper over time. But what about Picasso painting? You can't make those cheaper, right? There's only so many of them. They're circulating out there. No matter how much abundance AI brings in, there are only ever going to be so many of them. Maybe there's other art and there's a lot of, there's an infinite volume of incredible art out there, but you can't make more Picasso. You cannot make more of that specific asset and that specific asset. Now you can probably already start from those two ideas to pick out that descriptive explanation for why certain assets move in the way they are. And then also that frame for decision-making and let's start with the latter there. If you think about sport teams over the past five, 10 years, they've been exploding in their, their value, right? They are worth billions and billions of dollars. They've been growing at like some of the better teams, a billion dollars a year for the owners. And if you listen to the interviews on why some of the, especially the venture guys are going in and buying these businesses, what are they saying? They're saying no matter what happens with AI, the 49ers is going to have value. You cannot replace the 49ers. You cannot make an infinite number of sports teams. They're always going to be valuable and become even more valuable, likely due to the world and the evolution of AI. Well, there you go. That's a smoking gun. That is a $15 billion decision that we can say in some part hinges on that concept of there are some things AI can knock just abundance out of value. Now that's just one example. Another example would be real estate prices in major cities where you have a lot of people who make a lot of money and could work remotely or could purchase homes somewhere, but they still go buy homes in that city, San Francisco being the case in point, right? People want to be closer to their jobs. They want to be in those communities. And so even when they don't have to, they still just reasonably, right? This makes a lot of sense to all of us. They just want to stay in the city, for example, and they're going to pay more for that. And that's a combination of those two things. That is the preference standing over the need. And it is something that even with AI, you can't make more of. You cannot make magically 10 times more housing in San Francisco. That's something that is permanent and zoned and people don't want more of. It's just, that's how many houses there are in San Francisco. That's how many houses there are going to be. And people are going to want to live in central San Francisco, for example, or in Soho in New York, even if the city, you know, houses get cheaper and the city gets a lot more housing and becomes horizontally bigger. And so you can start to then think about the financial decisions you make through that lens. This is not a hard rule, right? This has to be in context. But you can start to think, okay, do my investments benefit from preference over need, and then will AI making goods and services cheaper benefit this investment or will it harm or not affect this investment? Definitely food for thought. I think this is something that will become a lot more discussed and visible over time in many ways, but I'm going to wrap the video there. I hope you find it useful. Again, this was part of the AI fundamentals series. There are a lot more videos in the series that you want to go watch those, but either way, very glad you're here. Hope you have a good one. I will see you in the next one.