Three Types of Intelligence

Morgan Housel (0:06)

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Investing involves risks, including possible loss of principle. All right, welcome back. One of the things I've talked about here before is the idea that most good news in the world happens slowly. It's a slow compounding over time that takes years and decades for good news in the economy and the world to make an impact on your life. The opposite of that is bad news usually happens very fast. It happens overnight. It's things out of the blue that you can't avoid, and terrorist attacks and car accidents. But good news tends to be slow. Like most rules, there are exceptions to this. Sometimes the exception proves the rule. And I think there's a version of that happening right now with AI, where in literally the last 90 days, the improvements in the AI models are visible and you can't ignore them. Like how good ChatGPT or Claude is today versus how good it was in April is materially different.

And it still doesn't show any sign of slowing down. I had one of these experiences in the past couple of days, where I started using one of the new AI agents, where it's not a chat bot that gives you information. It can actually complete tasks for you. It can go do things for you. And it was one of those experiences that I've only had a very small number of times in my life, where within 10 seconds of using the product, you are like, there is no way that this does not change the world. There's no way that this is not going to control your life in a short period of time, in a positive way. We have technology that can just do stuff for us now that didn't exist 90 days ago.

And it's astounding. Sometimes you have these moments where you just have to sit back and be like, I can't believe how fast the world is changing. And we're in one of those right now. Very exciting. I'm not an AI expert, so that's my only take on this. And of course, when something is changing that fast and it's that powerful, there are downsides. The downsides to AI that everyone's been talking about in the last couple of weeks, in particular, is the idea that it's eventually going to end humanity, that it's going to take over the world and shut down the power grid and cause a bio weapon, whatever it might be. That's what everyone's talking about. A much more subtle and less exciting and therefore less in the headlines risk is kind of what the slow erosion of what AI can do to people's cognitive abilities, that if and once people realize, particularly young people who have not developed a lot of those cognitive abilities yet, realize that critical thinking is not necessary to have a good fulfilling life and a successful life, you start shutting it down.

And all of the learning that most of us went through early on in pre-AI days, as in like a year ago, tends not to take place anymore, at least as much as it did. And if you talk to college professors and high school teachers, they will tell you how quickly and how profound AI is changing how kids learn, including one way to summarize it is, they're not learning like they used to be. There's a really good interview in the last week with Jensen Wong, the CEO of NVIDIA, the largest companies in the world now that make AI chips. And he's talking about this idea that because of AI, students are not learning things like math like they used to, because you and I used to go home with our homework on paper and do long division by hand. And now if you ask students to do that, they're like, why? The bot can do it all for me. Why would I need to learn this? And so here's part of the interview. I'm going to read Jensen's quote. He says, try to get a kid to do long division right now. The multiplication table is starting to be forgotten. Doing square roots? Oh my goodness. Basic math is being forgotten.