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The most fascinating part of the report (page 10) is an interview with Jim Covello, Goldman Sachs' Head of Global Equity Research. Covello isn't a name you'll have heard unless you are, for whatever reason, a big semiconductor-head, but he's consistently been on the right side of history, named as the top semiconductor analyst by II Research for years, successfully catching the downturn in fundamentals in multiple major chip firms far before others did.
And Jim, in no uncertain terms, thinks that the generative AI bubble is full of shit.
Covello believes that the combined expenditure of all parts of the generative AI boom — data centers, utilities and applications — will cost a trillion dollars in the next several years alone, and asks one very simple question: "what trillion dollar problem will AI solve?" He notes that "replacing low-wage jobs with tremendously costly technology is basically the polar opposite of the prior technology transitions [he's] witnessed in the last thirty years."
One particular myth Covello dispels is comparing generative AI "to the early days of the internet," noting that "even in its infancy, the internet was a low-cost technology solution that enabled e-commerce to replace costly incumbent solutions," and that "AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn't designed to do."