• Google in panic mode…
  • Samsung is trying to beat Apple to the punch…
  • ChatGPT launches a paid subscription

Dear Reader,

What happened with eggs?!?

The chart below looks like that of a hot artificial intelligence stock. But it’s just the average cost of a dozen eggs.

And that’s just the average. I’m sure there are many of us paying a few dollars more than that. It’s a huge jump considering that prior to 2021, the average cost hovered around a very reasonable $1.50 or so.

So what’s going on? First off, there are all sorts of rumors that our food supply is under attack. There have certainly been a large number of industrial fires at food processing plants that have received a lot of attention. The most recent one that comes to mind is the fire at Hillandale Farms in Bozrah, CT, that resulted in the death of about 100,000 hens.

But how do we make sense of this? Is this a trend? And is it impacting the price of eggs? Well, the data says that this is highly unlikely. There are about 372 million egg laying hens in the U.S. That means there are more hens than people. And a hen can lay about an egg a day.

Even if a few million hens died a year in industrial fires, it just wouldn’t heavily impact the price of eggs. And industrial fires at food processing plants aren’t anything new. The National Fire Protection Agency (NFPA) reports that there are about 5,000 industrial fires a year at manufacturing and food processing plants in the U.S. That’s the equivalent of 13.7 fires a day.

The NFPA also noted that there were about 2,000 fires in 2019 in agricultural, grain, livestock, and refrigerated storage facilities. Unfortunately, these incidents are very common.

The reality is that these facilities have lots of flammable materials, fuel, and chemicals – exactly the kind of environment where accidents can happen. Which begs the question again… Why is the price of a dozen eggs so crazy?

Since February 2022, there has been an outbreak of bird flu that has resulted in the loss of around 43 million hens last year. It sounds like a lot, and it is, but that’s only about 11% of the total egg-laying hen population. That might account for a small increase in the price of eggs, perhaps 15 or 20 cents. But not the 220% price increase that we’ve seen since 2020.

The real problem is caused by bad economic and monetary policy. For example, the price of energy has skyrocketed because the Biden administration is hostile towards U.S. energy production. Its policies have resulted in the reduced production of clean, abundant, and cheap natural gas. In the absence of natural gas, the U.S. has turned back to coal for electricity production and become a net importer for energy again. That’s why our electricity bills have more than doubled in so many parts of the country.

Failed pandemic policies forced and paid portions of the labor force to stay at home. And inexplicably, the U.S. is still officially in a state of pandemic emergency, which isn’t scheduled to end for another three months (until May 11). We currently have the lowest levels of labor force participation since the 1970’s. That’s bad. And it means much higher costs of labor, which means much higher prices for food.

And then there’s the trillions of dollars of stimulus spending and printing. This devalues the U.S. dollar, reduces purchasing power, and causes inflation in prices. The cost of feed for the hens, along with everything else required to manage livestock, has also gone through the roof.

These are the real reasons that the price chart of a dozen eggs looks like that of a hot AI stock. The good news, if there is any, is that all of these destructive policies can be reversed. I wish I could say when that’s going to happen, but it’s at least somewhat comforting to know that there is a solution if “we the people” want it.

Eggs are a superfood. They’re a food staple, and a fantastic part of any nutritional diet. And they should be affordable to all.

Google’s rapid response to ChatGPT…

Last month we saw that Google had issued a “code red” internally throughout the company. This was in response to the release of OpenAI’s ChatGPT and its exponential adoption.

For the sake of new readers, ChatGPT is a generative artificial intelligence (AI). And a powerful one at that.

ChatGPT is capable of having intelligent conversations with humans on just about any topic we can imagine. In fact, if we didn’t know it was an AI, we might be tempted to think it was a human except for the fact that it types too fast with its responses.

The AI can answer questions on any subject. It can write essays about any given topic. It can compare and contrast different philosophies and opinions. And it can write software code upon command.

And as we discussed, ChatGPT has the potential to impair Google’s business model at its core. That’s because it could redefine the search engine entirely.

If we think about search, it’s really something of an antiquated process. We type in what we are looking for and press enter. Then the search engine spits out pages and pages of results. It’s up to us to comb through these results to try to find the information we want. For simple things like a website search, it’s fine. But for more complex searches it can be an inefficient and time-consuming process.

That’s why generative AI is such a threat. We could ask the same complex inquiries, but rather than sending us links to other web pages to sort through, ChatGPT would provide us with a clear and complete written answer.

Obviously this threat has lit a fire under Google’s AI teams. So much so that Google hastily organized a big AI event today. Google’s calling it an emergency event. And the tech giant plans to reveal its own generative AI product currently called “Apprentice Bard.”

Apprentice Bard is based on Google’s own large language model called LaMDA. That stands for Language Model for Dialogue Applications.

This is going to be interesting.

If we remember, one of Google’s computer scientists recently suggested that LaMDA was sentient. That it had become self-aware.

I don’t believe that to be the case.

As the computer science community pointed out, LaMDA is trained on billions of parameters specifically to develop pattern recognition. The AI is great at recognizing patterns in speech. This gives the algorithm the ability to choose the optimal response to any question or comment during a conversation.

So what Google’s computer scientist witnessed was the AI doing what it was trained to do. But this still speaks to how powerful the language model is. And yes, for some users, it may feel like we’re chatting with a self-aware entity.

So we can expect Google’s generative AI to be something competitive with ChatGPT. And we’ll find out at the event today just how Google plans to deploy it.

I absolutely expect Google to integrate Apprentice Bard into Google Search. It has to. If not, I believe Google’s entire business is at risk.

I can’t wait to see what Google has to share about its plans. Readers can expect another update on this very soon.

The race for the next consumer electronics boom is on…

Just a few weeks ago we looked at how Apple is gearing up for the launch of its extended reality (XR) headset this year. It’s going to be Apple’s first big move into the augmented reality (AR)/virtual reality (VR) space.

These products will become part of the next big wave of mass market consumer electronics. Which is exactly why Apple wants to lead that space.

So it’s no surprise that Samsung just revealed its plans for an extended reality device. And Samsung is partnering with some heavy hitters in the industry to make it happen. They include Google, Qualcomm, Meta, and Microsoft.

Of course, Google makes the Android OS software that runs on all Samsung’s smartphones. It appears Samsung will lean on Google for its AR operating system as well.

Qualcomm produces the semiconductors that go into Samsung’s smartphones. And we know Qualcomm has some chips that drive augmented reality as well. Samsung’s AR headset will put them to use.

And Meta is the largest social media company in the world. It owns Facebook, Whats App, and Instagram. Meta will surely produce extended reality versions of these apps to run on Samsung’s AR device.

And then there’s Microsoft. If we remember, Microsoft recently gave up on its own augmented reality ambitions. It made the decision to stop work on its HoloLens headset entirely.

But Microsoft clearly must have some strong intellectual property (IP) related to AR/VR technology. Samsung’s likely looking to leverage that IP, as well as extend some of Microsoft’s productivity or gaming applications onto Samsung’s new hardware.

This is a big move by Samsung. And I’m sure the company will put out an interesting product at a lower price point than Apple’s.

Apple and Samsung are about to go head to head in the AR space, just as they do in the smartphone arena. And there’s one big reason why…

Lagging smartphone sales is a key driver behind Samsung’s race to put out an AR product.

If we look at smartphone shipments in the U.S., they have been consistently falling since 2017. This is a direct result of consumers upgrading their phones less frequently. And that trend is expected to continue, as we can see from the chart below:

Here we can see that annual smartphone shipments in the U.S. peaked at 176 million units in 2017. But that number has declined nearly every year since. The same dynamic is happening right now around the world.

This speaks to the fact that there just aren’t many incentives to upgrade phones on an annual basis anymore. Especially now that most people have a 5G-enabled devices.

Samsung needs a new product line to make up for this loss of revenue. And its extended reality headset could fill that gap. But it will have to compete directly with Apple in this area.

We’re at the beginning of the end of the age of the smartphone. Augmented reality will be the next platform for human-computer interface.

Apple and Samsung see this. And they’re mounting their battle stations.

ChatGPT is on sale…

Earlier, we saw how OpenAI’s ChatGPT product has Google scrambling. And now OpenAI is moving quickly to capitalize on its big success.

OpenAI just announced that priority access to ChatGPT is now available for $20 a month.

Those who sign up for a paid subscription will get access to ChatGPT at all times. They’ll also experience faster response times. And subscribers will get access to new features in advance of the public.

OpenAI still plans to keep ChatGPT free to the public. But access is never guaranteed. As anyone who has frequently experimented with the generative AI knows, the server is often overloaded. This prevents access to ChatGPT. When we need to use it and it’s not available, that’s pretty frustrating.

Which is why there should be high demand for OpenAI’s offering. And if we run the numbers, it’s easy to see just how profitable this will be.

Remember, it only took five days for ChatGPT to attract one million users. Its rate of adoption has been historic.

Let’s project out a year or two and say that ChatGPT gains 10 million paid subscribers. That’s $200 million in monthly revenue – $2.4 billion a year. Not too shabby. With that type of recurring revenue, ChatGPT alone could be valued at more than $20 billion. That’s why it’s no surprise that the latest rumored valuation of OpenAI is $29 billion.

And even if paid subscriptions are only half that, OpenAI would still be raking in $1 billion a year from ChatGPT. And that’s just from this simple subscription model without considering any other sources of revenue.

OpenAi has made a smart, simple move towards quick monetization.

And to me, the price is an absolute steal. Priority access to this powerful generative AI is worth a lot more than $20 a month.

This latest development is actually a far bigger deal than just the success of OpenAI. Now that venture capitalists have seen the incredible rates of adoption, and a quick path towards monetization, the money is going to flow into this space faster than we can imagine. Capital will be abundant, and innovation will accelerate with AI technology.

And while most companies will be private, we’ll be looking for public companies that acquire promising private AI companies, or employ their technologies to their exciting business.


Jeff Brown
Editor, The Bleeding Edge