SITALWeek #416
Welcome to Stuff I Thought About Last Week, a personal collection of topics on tech, innovation, science, the digital economic transition, the finance industry, and whatever else made me think last week.
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In today’s post: OpenAI made it easy to create new custom GPTs, which allowed me to launch two beta chat agents; making better decisions by understanding everything that leads up to the crucial moment; signs that manufacturing capital is reshuffling dramatically around the globe; and, a bevy of birth rate stats as the hypothesized "sneaker wave" morphs into a receding rip tide.
SITALWeek will return on November 26th.
Stuff about Innovation and Technology
Tailored Intelligence
Last week at OpenAI’s first developer conference, they announced the ability to create custom GPTs. The basic idea is that you task ChatGPT with a certain set of parameters and upload some supporting documents (or tie it to external APIs) to generate a customized chat agent. You can also share usage of the GPT (currently limited to GPT Plus subscribers). Soon, the company will be launching a GPT “app” store that will share revenues with creators of commercial GPT agents (i.e., if you create a GPT agent with access to useful proprietary data, it could become a revenue generating tool that can be used standalone or embedded in an application). Further, if you have an enterprise account with OpenAI, you can create proprietary GPTs (e.g., with access to internal data relevant to your company). This type of knowledge-base-on-steroids should help companies unlock productivity at an unprecedented pace. Another use case would be to build a customer service chatbot with access to your internal records. To experiment with these new features, I’ve launched a GPT called Rootmo that has embedded the knowledge of five of our NZS Capital whitepapers (GPT Plus subscribers can use it here; start with the recommended queries). I am also hard at work on BullSitter, the SITALWeek GPT (this GPT is incomplete, but you can try the sample questions). So far, I’ve found the GPTs to be rather limited because they are not indexing information to create a deep understanding; rather, they are just querying their uploaded documents. Thus, for now, you need to ask somewhat leading questions. For example, you can ask Rootmo to define ROOTMO for you; or, you can ask it how complex adaptive systems are relevant to investing. Despite OpenAI’s slow release of functionality, I think this customization advance marks a major step toward making AI more useful. Ethan Mollick has a more detailed writeup on these GPT “almost” agents. In other OpenAI news, the company announced that they have 2M active developers, 100M weekly active users, and over 92% of the Fortune 500 as customers; they have also slashed the developer pricing tier concurrent with the release of the new GPT4 Turbo. This combination of leading functionality and early traction is likely creating a network effect of such proportions that, with each passing day, it will be increasingly difficult for the competition to catch up; but, it’s early days and we should see more competitive models from Google and others soon.
Miscellaneous Stuff
Determined to Make Better Decisions
Robert Sapolsky has a new book out called Determined: A Science of Life without Freewill. I covered Sapolsky’s last book Behave in #210, quoting a passage that explains just how many things feed into our moment-to-moment conscious behavior: “blood glucose levels; the socioeconomic status of your family of birth; a concussive head injury; sleep quality and quantity; prenatal environment; stress and gluticocorticoid levels; whether you’re in pain; if you have Parkinson’s disease and which medication you’ve been prescribed; perinatal hypoxia; your Dopamine D4 receptor gene variant; if you have had a stroke in your frontal cortex; if you suffered childhood abuse; how much cognitive load you’ve borne in the last few minutes; your MAO-A gene variant; if you’re infected with a particular parasite; if you have the gene for Huntington’s disease; lead levels in your tap water when you were a kid; if you live in an individualist or collectivist culture; if your a heterosexual male and there’s an attractive woman around; if you’ve been smelling the sweat of someone who is frightened. On and on. Of all the stances of mitigated free will, the one that assigns aptitude to biology and effort to free will, or impulse to biology and resisting to free will, is the most pernicious and destructive.” I think being cognizant of the myriad factors and inputs that drive human behavior could have a huge positive impact on our decision making process (a topic I also covered in Time Travel to Make Better Decisions – a paper you can ask Rootmo about!). As much as I love Behave, it’s a bit long and dense and not everyone has the will to take the time to read it. In Determined, Sapolsky offers a condensed (but fairly comprehensive) summary of Behave before delving into the philosophical implications of how to live once you have internalized the ramifications of his research. I’ve discussed this illusory freewill in the past in posts such as this one. Whether or not you have read Behave, I recommend checking out Determined to better understand how the human mind functions.
Stuff About Demographics, the Economy, and Investing
Reglobalization
While attempts at reshoring/reorganizing global supply chains have proven slow and fraught with challenges, it appears a material shift is finally taking place. Foreign direct investment (FDI) in China went negative (outflows of capital) for the first time since China began tracking the stat. After averaging $50-100B per quarter in the 2010s, it recently dropped to negative $11.8B in Q323. Meanwhile, in Mexico, FDI hit an all-time record high of $33B for the first three quarters of 2023, which is ~30-50% above earlier 2020s levels. Around half the total FDI was directed towards manufacturing of all types, including a quarter slated for the automotive sector. On a related note, this WSJ article on America’s inability to manufacture something as simple as synthetic rubber gloves – despite a major effort and large amount of money – is depressing.
The Childless Generation
It’s rare that I come across a novel presentation of demographic stats, but the WaPo’s story on low US birth rates contains some eye-catching data. While Millennials are getting married and moving into houses, they still are not having babies. While it’s possible the numbers reflect delayed childbearing, even rising births for older women are not enough to offset the declining births for younger women. A recent update to the Census forecast (last done in 2017) now shows that there will be more deaths than births in the US just fifteen years from now. Previously, this was not forecast to happen until much later in the century. While there is ample evidence pointing to a long series of economic hardships that conspired against younger generations in the 2000s, even now, more and more young adults are zero-child households. As of 2022, almost 35% of women aged 25 to 44 have had no children, up from ~28% in 2012. The WaPo also cites a 2021 Pew Research poll that 44% of childless adults aged 18 to 49 were “not too likely” or “not at all likely” to have a child, up from 37% in 2018. Further, it’s harder for kids to out-earn their parents these days. For example, 90% of kids born in the 1940s were more prosperous than their parents, but that figure had dropped to ~50% by the time the first wave of Millennials were born in the early 1980s. According to the WSJ, over 40% of families headed by college grads born before 1968 have a net worth in excess of $1M. The remarkably lucky set of circumstances those generations experienced have yet to repeat. With current prospects for building wealth hampered by sky-high home prices, young adults are more likely to be pessimistic regarding their (prospective) progeny’s prospects. Whereas I once described (back in 2019) an imminent demographic sneaker wave of Millennial births, it appears the trend has applied more to household formation and less to births. While I do worry about a shrinking set of opportunities as AI envelopes many white (and eventually blue) collar jobs, I am equally as optimistic (for now) that technology will create an array of unexpected new opportunities that multiply the size of the overall economy despite the impending population decline. Afterall, if you’ve read Sapolsky, you know that I have no choice but to be optimistic.
✌️-Brad
Disclaimers:
The content of this newsletter is my personal opinion as of the date published and is subject to change without notice and may not reflect the opinion of NZS Capital, LLC. This newsletter is an informal gathering of topics I’ve recently read and thought about. I will sometimes state things in the newsletter that contradict my own views in order to provoke debate. Often I try to make jokes, and they aren’t very funny – sorry.
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