Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Many new technologies go through cycles of boom and bust, so will it be with AI.
I heard a lot about AI in 1970s too as a graduate student. Many universities had novel AI Labs. They are still around but there are also hotter Media Labs, Digital Xyz Labs, Robotics/ Automation/ Machine Learning Labs, etc. The future consumer world that the prominent AI thinkers at the time (1970s) projected was nothing like the world today because they couldn't guess about web/ Internet, wireless phones, smart phones that are as good as a roomful of computer equipment then, etc. The hottest thing in AI is the generative AI and that goes back only to Fall 2022 (less than a few months ago) and it has spread like wildfire. It will soon be proliferating with versions from many companies. All this hype may cool down when companies figure out that nobody is making money yet from it. If nothing else, there will be a huge consolidation/ shakeout. After a bust, another wave of commercially useful generative AI may come along and will be embedded in many things - software and/or hardware.
Then, Apple will jump into it and beat up everybody all over again (-:).
AI generated significant excitement in recent months after ChatGPT became available to the masses. Many companies jumped on the AI bandwagon in their Q1 2023 earnings calls. All this hype makes me very circumspect regarding investment opportunities emanating from the technology.
I believe AI will increase general productivity and may facilitate medical breakthroughs among other benefits. However, there are also considerable risks associated with the technology. I agree with much of your assessment but don't have an opinion regarding Apple's AI strategy.
There is lots of work to be done on the software side. It may take several more years of refinement before they will start be deploy. On the hardware front, NVIDIA and other gaming chipset manufacturers are the spotlight lately.
Another play in this AI space is the “picks and shovels” companies that enable this technologies. TSMC is the largest semiconductor foundries in the world in producing chipsets for many electronic devices including Apple. However, the geographical risk with China is causing many investors to pause.
One aspect of the CHIP Act is to bring manufacturing capabilities and capacities back to US. TSMC is on track to build a manufacturing plant in Phoenix, Az and another one in Germany. This will take several years to complete but it will stabilize the manufacturing capabilities in US and Western Europe.
One aspect of the CHIP Act is to bring manufacturing capabilities and capacities back to US. TSMC is on track to build a manufacturing plant in Phoenix, Az and another one in Germany. This will take several years to complete but it will stabilize the manufacturing capabilities in US and Western Europe.
So we were out at a club last weekend and via some mutual, professional friends, we met and spoke at length to one of the many Project Managers at the AZ site. The man has been a PM all of his career and engaged in many national/international high $ and high profile construction projects.
We asked him how things were progressing at the site.
Um, OUCH!
He related some stunning (and detailed) comments (that I won't detail here) about the company's lack of understanding and appreciation for the many layers of regulation, inspection and certification on US construction projects. For much of his time during the early stages of construction, he would get to the site, 'splain again why they need to adhere to this/that regulation, tell them to Just Do It, and then go home for the day. Next day, rinse and repeat. In his over 30 years as a PM, he stated he's never seen anything approaching the issues on this job.
LOTS of other issues surround this project and they are being documented daily by local press, TV and the like. Online searches will easily locate many of the biggest issues.
IMHO, I think picking Arizona as the manufacturing site is a mistake. Semiconductor manufacturing is a very water intensive process and the West is having severe water shortage in past decade. Local building codes and environmental laws govern whether the company can get the building permit.
Europe is even restrictive on their building codes for good reasons. I recall Tesla ran into water problem in Hamberg, Germany.
IMHO, I think picking Arizona as the manufacturing site is a mistake. Semiconductor manufacturing is a very water intensive process and the West is having severe water shortage in past decade. [snip]
This should be a major concern. Forty million people depend on the Colorado River for water. An epic drought (23 years!) and historic mismanagement of water resources (Colorado River Compact, 1922) brought record low water levels in Lake Mead and Lake Powell last year. Link
Water is the lifeblood for the western half of US. TSMC is following Intel who has built a plant in Phoenix many years ago. Clearly the management picked the location due to the largest $ and land granted by Arizona. Will see how this will plays out.
Again, we are getting off track on the topic of AI. As I posted above, my comment was
Another play in this AI space is the “picks and shovels” companies that enable this technologies. TSMC is the largest semiconductor foundries in the world in producing chipsets for many electronic devices including Apple. However, the geographical risk with China is causing many investors to pause.
Barron's had some recent stories on Colorado River situation.
EMERGING MARKETS (4/3/23). To benefit from the US Chips and Science Act to promote domestic semi-CHIPS manufacturing, TSM (Taiwan) and INTC are building huge facilities near Phoenix, AZ. But chips manufacturing is very WATER-intensive and that is a scarce resource in AZ. Phoenix draws 40% of its water from the COLORADO RIVER that runs through 7 states, and AZ is the last one. Almost 70% of Colorado River water is used for farming. In a hyperbole, Kathryn SORENSEN, a former director of Phoenix Water Services, and now with Kyl Center (Arizona State U), said that the state’s water planning goes back “thousands of years”, so it can handle the water demands. https://ybbpersonalfinance.proboards.com/post/998/thread (If wondering why this US-related story is under the Emerging Markets, note the reference to TSM and Taiwan is part of most EM indexes; BTW, S Korea is considered EM by MSCI, but developed by FTSE)
COVER STORY (8/29/22), “(ESG) Beyond Drought: The Coming WATER Shortage Is a Threat from Main Street to Wall Street”. Water shortages in CA and elsewhere have changed consumer behaviors, HOME lawns and plantings. Investors are paying more attention to water impacts/risks/metrics on portfolios and BUSINESSES (agriculture, apparel/fashion, energy, mining, semi chips, data centers, etc). The SEC will require climate risk disclosures by 2022 yearend. Only 3% of world’s water is FRESH, and 2.5% is locked up in glaciers, polar ice caps, atmosphere, soil, so only 0.5% of the water is fresh and readily available. Many companies are RECYCLING water for reuse or alternate uses. Number and durations of DROUGHTS are rising globally. Problems in the US are acute in Colorado River areas (with Lake Mead and Lake Powell below 30% capacity). Global water DEMAND will exceed supply by 40-56% by 2030. Many companies have to write off assets stranded/idled by water scarcity. https://ybbpersonalfinance.proboards.com/post/753/thread
My 2 cents, return to the Rust Belt. Lots of water in WI., two great lakes to dip from ! Building in AZ. has no common sense , with the water usage required.
That thought has occurred in IL for MATCHING federal $s with IL $s:
"State of Illinois Launches $15 Million Federal Grant Support ... CHICAGO - Governor Pritzker and the Illinois Department of Commerce and ... the State's efforts to secure funding through the CHIPS and Science Act,..."
One aspect of the CHIP Act is to bring manufacturing capabilities and capacities back to US. TSMC is on track to build a manufacturing plant in Phoenix, Az and another one in Germany. This will take several years to complete but it will stabilize the manufacturing capabilities in US and Western Europe.
So we were out at a club last weekend and via some mutual, professional friends, we met and spoke at length to one of the many Project Managers at the AZ site. The man has been a PM all of his career and engaged in many national/international high $ and high profile construction projects.
We asked him how things were progressing at the site.
Um, OUCH!
He related some stunning (and detailed) comments (that I won't detail here) about the company's lack of understanding and appreciation for the many layers of regulation, inspection and certification on US construction projects. For much of his time during the early stages of construction, he would get to the site, 'splain again why they need to adhere to this/that regulation, tell them to Just Do It, and then go home for the day. Next day, rinse and repeat. In his over 30 years as a PM, he stated he's never seen anything approaching the issues on this job.
LOTS of other issues surround this project and they are being documented daily by local press, TV and the like. Online searches will easily locate many of the biggest issues.
Maybe they should have teamed up with ASU. Stuff sprouts out of the ground when they're involved, or even in the neighborhood. Maybe Phoenix codes are rougher than Tempe's, maybe.
I googled the TSMC project. Most of the stories revolved around serious cultural issues with the work force and the neighbors.
The day last week it was reported that Phoenix may limit housing tract permitting, water ETFs (PHO and FIW) jumped. I have owned the latter through thick and thin since 2018. SPY has returned about 55% for those 5 years, while the two water funds have gained some 75%. CGW, however, has lagged SPY.
Maricopa County is a livestock-dominant county, with 61% of agricultural cash receipts originating from livestock and its products and 39% from sales of crops. Maricopa County is a major agricultural producer ranking in the top 1% of counties in the U.S. for sales of milk, other crops and hay, and vegetables and melons. Major agricultural commodities by sales includemilk from cows ($487.7 million), vegetables, melons, potatoes, and sweet potatoes ($163.1 million), other crops and hay ($129.5 million), and nursery, greenhouse, floriculture, and sod ($123.7 million)
Just a reminder that hay is alfalfa. one of the most water-intensive crops on the planet. Any of you folks think Maricopa should be spending water resources on hay production that generated some part of 129.5 million bucks in 2020?
Water is the lifeblood for the western half of US. TSMC is following Intel who has built a plant in Phoenix many years ago. Clearly the management picked the location due to the largest $ and land granted by Arizona. Will see how this will plays out.
Again, we are getting off track on the topic of AI. As I posted above, my comment was
Another play in this AI space is the “picks and shovels” companies that enable this technologies. TSMC is the largest semiconductor foundries in the world in producing chipsets for many electronic devices including Apple. However, the geographical risk with China is causing many investors to pause.
Hard to separate water issues from anything in Arizona.
But to your second point, I wonder if the companies in the GRID etf are making a little money on all of this construction, and speculation. I find it hard to believe it's all due to infrastructure spending.
Comments
I'll get excited about AI as soon as I hear that it's being considered universally to cure natural stupidity.
I heard a lot about AI in 1970s too as a graduate student. Many universities had novel AI Labs. They are still around but there are also hotter Media Labs, Digital Xyz Labs, Robotics/ Automation/ Machine Learning Labs, etc. The future consumer world that the prominent AI thinkers at the time (1970s) projected was nothing like the world today because they couldn't guess about web/ Internet, wireless phones, smart phones that are as good as a roomful of computer equipment then, etc. The hottest thing in AI is the generative AI and that goes back only to Fall 2022 (less than a few months ago) and it has spread like wildfire. It will soon be proliferating with versions from many companies. All this hype may cool down when companies figure out that nobody is making money yet from it. If nothing else, there will be a huge consolidation/ shakeout. After a bust, another wave of commercially useful generative AI may come along and will be embedded in many things - software and/or hardware.
Then, Apple will jump into it and beat up everybody all over again (-:).
AI generated significant excitement in recent months after ChatGPT became available to the masses.
Many companies jumped on the AI bandwagon in their Q1 2023 earnings calls.
All this hype makes me very circumspect regarding investment opportunities emanating from the technology.
I believe AI will increase general productivity and may facilitate medical breakthroughs among other benefits.
However, there are also considerable risks associated with the technology.
I agree with much of your assessment but don't have an opinion regarding Apple's AI strategy.
Another play in this AI space is the “picks and shovels” companies that enable this technologies. TSMC is the largest semiconductor foundries in the world in producing chipsets for many electronic devices including Apple. However, the geographical risk with China is causing many investors to pause.
One aspect of the CHIP Act is to bring manufacturing capabilities and capacities back to US. TSMC is on track to build a manufacturing plant in Phoenix, Az and another one in Germany. This will take several years to complete but it will stabilize the manufacturing capabilities in US and Western Europe.
In the meantime, nano . . . ;>)
We asked him how things were progressing at the site.
Um, OUCH!
He related some stunning (and detailed) comments (that I won't detail here) about the company's lack of understanding and appreciation for the many layers of regulation, inspection and certification on US construction projects. For much of his time during the early stages of construction, he would get to the site, 'splain again why they need to adhere to this/that regulation, tell them to Just Do It, and then go home for the day. Next day, rinse and repeat. In his over 30 years as a PM, he stated he's never seen anything approaching the issues on this job.
LOTS of other issues surround this project and they are being documented daily by local press, TV and the like. Online searches will easily locate many of the biggest issues.
Europe is even restrictive on their building codes for good reasons. I recall Tesla ran into water problem in Hamberg, Germany.
An epic drought (23 years!) and historic mismanagement of water resources (Colorado River Compact, 1922)
brought record low water levels in Lake Mead and Lake Powell last year.
Link
Again, we are getting off track on the topic of AI. As I posted above, my comment was
EMERGING MARKETS (4/3/23). To benefit from the US Chips and Science Act to promote domestic semi-CHIPS manufacturing, TSM (Taiwan) and INTC are building huge facilities near Phoenix, AZ. But chips manufacturing is very WATER-intensive and that is a scarce resource in AZ. Phoenix draws 40% of its water from the COLORADO RIVER that runs through 7 states, and AZ is the last one. Almost 70% of Colorado River water is used for farming. In a hyperbole, Kathryn SORENSEN, a former director of Phoenix Water Services, and now with Kyl Center (Arizona State U), said that the state’s water planning goes back “thousands of years”, so it can handle the water demands. https://ybbpersonalfinance.proboards.com/post/998/thread
(If wondering why this US-related story is under the Emerging Markets, note the reference to TSM and Taiwan is part of most EM indexes; BTW, S Korea is considered EM by MSCI, but developed by FTSE)
COVER STORY (8/29/22), “(ESG) Beyond Drought: The Coming WATER Shortage Is a Threat from Main Street to Wall Street”. Water shortages in CA and elsewhere have changed consumer behaviors, HOME lawns and plantings. Investors are paying more attention to water impacts/risks/metrics on portfolios and BUSINESSES (agriculture, apparel/fashion, energy, mining, semi chips, data centers, etc). The SEC will require climate risk disclosures by 2022 yearend. Only 3% of world’s water is FRESH, and 2.5% is locked up in glaciers, polar ice caps, atmosphere, soil, so only 0.5% of the water is fresh and readily available. Many companies are RECYCLING water for reuse or alternate uses. Number and durations of DROUGHTS are rising globally. Problems in the US are acute in Colorado River areas (with Lake Mead and Lake Powell below 30% capacity). Global water DEMAND will exceed supply by 40-56% by 2030. Many companies have to write off assets stranded/idled by water scarcity. https://ybbpersonalfinance.proboards.com/post/753/thread
Building in AZ. has no common sense , with the water usage required.
"State of Illinois Launches $15 Million Federal Grant Support ...
CHICAGO - Governor Pritzker and the Illinois Department of Commerce and ... the State's efforts to secure funding through the CHIPS and Science Act,..."
Pitches have been made but no takers yet.
https://www.illinois.gov/news/press-release.26493.html
I googled the TSMC project. Most of the stories revolved around serious cultural issues with the work force and the neighbors.
Intel OTOH, meets child care challenge, teams up with Maricopa Community college to offer free training.
Next thing you know Intel will be paying people to tear out the few remaining lawns and install water efficient toilets.
Maybe they can get our two utilities to get modern on distributed solar.
Axios has a good back-grounder on the Silicon Desert.
What is the county getting out of that use of water? Just a reminder that hay is alfalfa. one of the most water-intensive crops on the planet. Any of you folks think Maricopa should be spending water resources on hay production that generated some part of 129.5 million bucks in 2020?
But to your second point, I wonder if the companies in the GRID etf are making a little money on all of this construction, and speculation. I find it hard to believe it's all due to infrastructure spending.