Taking Stock: Is this really the Golden Age of AI?

**Rahul Tandon** (0:00)
I'm Rahul Tandon, welcome to Business Daily on the week that AI started sacking humans.

**SPEAKER_2** (0:05)
An artificial intelligence manager at the San Francisco market has fired its first human employee, and in labs, the store's parent company says the AI system, Mluna, recommended terminating the worker after they were...

**Rahul Tandon** (0:18)
Taking Stock with me today on that story are Nga Pham, a journalist based in Hanoi, Vietnam, and Justin Wolfers, Professor of Economics at the University of Michigan. What do you both make of that?

**Justin Wolfers** (0:31)
Mate, it's only half the story. Remember, it's also hired a bunch of people too. We always, with business news, tend to dwell in the negative. But if you had asked me what a prompt engineer was, a mere five years ago, I would have said probably someone who helps actors remember their lines.

**Nga Pham** (0:49)
I actually think that AI is getting really scary. I mean, you see AI every day, you don't know what is real, what is not real anymore. And I mean, like Rahul, you probably have read a lot of articles written by AI, right? You can detect that.
And it's just like it's invading us, our lives from everywhere.

**Rahul Tandon** (1:11)
Well, there we go. To be honest with you, I can't tell half the time what is real and what is not real, but that might not be to do with AI. That might be more to do with my own inabilities. We're going to talk about AI a lot on this program.
Has it reached its golden age? That's what the CEO of Nvidia said on Wednesday after its latest set of results beat Wall Street expectations. Quarterly revenues doubled in a year to nearly $100 billion. Pretty impressive. Here is the CEO, Jensen Huang, speaking to CNBC after those results came out. Because once again, there was a lot of concern about the spending levels on AI infrastructure.

**Jensen Huang** (1:53)
I think they're missing a very big point. First of all, this is the first generation of startups that needed tens of billions of dollars to get funded. When was the last time anybody heard of a startup that needed billions of dollars to get off the ground and needed tens of billions of dollars to become profitable? That just never happened, but that's really the nature of AI.
The cost of building AI, the cost of deploying AI, it's very capital intensive.

**Rahul Tandon** (2:19)
It certainly is, Justin. But are you worried, like some people are, about this circular side to AI? A big company gives money to another company and then they spend money back with the original one. Should we be worried about that or should we just look at these results and think, great, this is going to keep driving the US economy forward?

**Justin Wolfers** (2:40)
Well, look, there's actually a logic to the circularity, which is who knows the most about their future investment plans and AI.
It would be like one of the labs like OpenAI or Anthropic and also Nvidia. So who has inside information about what they're doing, where they need to go, what they see is the upside. It's not surprising they will have very, very linked interests. Your question gets at this broader point, which is lots of people like, oh my goodness, this is definitely a bubble, everything's going to crash. This is the point where I want to remind you that in a stock market for every seller, there's also a buyer. The fact that folks are buying Nvidia means there's a ton of folks willing to invest a ton of money believing that this really is a revolutionary future ahead of us.

**Nga Pham** (3:28)
Yeah, I think you're right. I think lots of businesses, and I just came back from Taiwan and obviously Nvidia, and TSMC have formed a very prosperous and very profitable alliance. I mean, they rely on each other. And I have not heard much of the fear of crushing the market or anything.
TSMC actually expects a very, very good revenue this year thanks to working with video and AI really.

**Rahul Tandon** (3:58)
That, of course, Nga, they're talking about the huge chip company that is based in Taiwan. But I suppose the question that people have at the moment, Justin, is are we back to the sort of.com era, where we're going to spend too much on infrastructure, we're not going to need as much as we think we are when it comes to AI. And that's going to lead to a lot of problems moving to the future. Because at the moment, if you look at the stock market, not the economy, it's what's driving it in the US, isn't it?