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“Popping M&Ms in the air and going after them and chomping them like Pac-Man. I actually gained weight in space which no one ever does.” – Mike Massimino
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We just got a slug of economic data, and the results relative to expectations was mixed. Both initial and continuing jobless claims came in lower than expected which eased some fears about a weaker labor market. GDP, however, was also weaker than expected as was Personal Consumption. Most concerning for the market, though, was that inflation readings in the form of the GDP Price Index and Core PCE both came in higher than expected. Futures are still considerably higher driven by technology as Meta earnings after the close yesterday were considerably better than expected. In response to the data, interest rates increased and futures lost a little bit of steam.
Occasionally, a trend enters the mainstream and sucks all the air out of the room. In the early 1980s, Pac-Man was released with little fanfare and critical acclaim, but it quickly overtook the country. Only 5,000 arcade units were originally produced for the US, but according to Wikipedia, within a year of its release, Pac-Man had grossed more than a billion dollars in quarters and generated more revenue than Star Wars. That’s literally tons of money! One reason for Pac-Man’s popularity was its ability to cross the gender divide; it was not only popular with boys and young men, but also wildly popular among women (hence the subsequent release of Ms. Pac Man). Pac-Man became so popular that in 1982, the song “Pac-Man Fever” reached number nine on the Billboard 100!
Since the early 1980s, there have been several other trends that have had different levels of lasting impact on mainstream consciousness, with the latest being AI. As a caveat, this is in no way meant to imply that AI is a fad. Unlike Pac Man, AI technologies will have a lasting and profound impact on every sector of the economy in ways that we can’t even imagine, so let’s just get that little bit of housekeeping out of the way. But the way in which AI has overtaken every other topic and crowded out every conversation has been unparalleled to anything we have ever seen, and Chat GPT’s ability to make AI technology accessible to everyone is probably a big reason why.
Corporate America is a perfect example of how AI has crowded everything else out. In Tuesday’s conference call from Alphabet (GOOGL), the term AI was mentioned 58 times after being mentioned 59 times in its January call. That’s an average of about once a minute! Alphabet first started to call itself an ‘Ai-first’ company in 2017, so you would think that they’ve been talking about it a lot on their quarterly calls since then. However, prior to the Q4 2022 call, the term was only mentioned more than 20 times once, and the average number of mentions per call up until then was less than ten. It wasn’t until Chat GPT’s launch in November that Alphabet (and many other companies) really started talking about it.
Unlike Pac-Man, AI doesn’t yet have a hit song topping the charts, but it’s probably only a matter of time. In this case, though, “AI-Fever” probably won’t even be written by a human.
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