Generative AI is coming for your job. Invest while you can.
The Writers Guild of America (WGA) strike is center stage, as writers across the entertainment industry have laid down their pens in pursuit of fair compensation and improved working conditions.
They’re demanding equitable pay and better treatment in an era of unprecedented content consumption. With streaming platforms driving a content boom, writers are churning out scripts at unprecedented rates without proportional increases in compensation. The WGA’s pushing for higher wages, protection against excessive work hours and eroding healthcare benefits.
The strike is affecting the entire industry, with production on hiatus. This strike follows a history of impactful actions by the WGA, reminding us of the crucial role writers play in the entertainment ecosystem.
As the strike unfolds, audiences are getting a glimpse into the often invisible struggles of the creative minds behind our favorite shows and films, prompting us to consider the broader implications of fair compensation within the industry.
It’s Not Just About Pay
Today marks the 119th day of the strike, and despite what you just read, it isn’t just about compensation and healthcare. It’s also about artificial intelligence (AI). The reason that wasn’t mentioned in the first four paragraphs of this issue is because that introduction was written by ChatGPT after being given a prompt to produce a 150-word blurb about the WGA strike.
So if you were wondering where the snark in our writing went, now you know. AI hasn’t yet developed its sense of humor, sarcasm or wit. It’s insipid. Like the Mike Pence of content creation, but without a pulse.
However, like Mike Pence, AI is really good at imitating human beings.
As a result, the WGA is concerned that AI’s takeover is imminent. Perhaps not this year or next, but if something’s not done to address it, sooner than later.
Fortunately for them — and workers in other at-risk industries — generative AI is still in its infancy. But it’s only going to get better.
That’s what it’s designed to do. Generative AI refers to deep-learning models that create high-quality content based on data it was trained with. With more practice, it teaches itself how to improve.
And it does so by leaps and bounds.
The South Park Case Study
If you’re in the ‘AI is here to save the world’ camp, it’s time to reconsider your position. As the strike continues, AI’s already looking to work its way into the writers’ room, onto the director’s chair and into the post-production studio.
For a glimpse of how that’s happening, look no further than Comedy Central’s South Park, which after 325 episodes spanning 26 seasons, is getting its first (unsanctioned) taste of what AI is capable of.
While the show’s production is on hold, an AI-powered episode generator — appropriately called Showrunner AI — has already created a handful of South Park episodes that weren’t written by the writers, animated by the animators or directed by the directors.
You can see how the program works and one of the episodes here.
So yeah, we think the WGA has every right to be fearful about the security of their jobs in the not-so-distant future. Because if this is just the first iteration of an AI-created animated show … it’s concerning to think about how good it will be in a matter of years.
And if for some reason you think this is a bubble or trend, think again. The global AI market is currently valued at $100 billion. And by numerous estimates, it’s expected to grow to $2 trillion by 2030.
For writers, editors, directors and a slew of other workers in industries AI’s going to negatively impact, it sucks. But it’s never going away.
Generative AI and deep fakes will be with us until the sun expands into a red giant and engulfs Earth, leaving in its wake a solar system only suitable for habitation by whatever species of alien Mike Pence identifies as.
But when life gives you lemons …
Make Lemonade
Like with any instance of groundbreaking technology, there are investable opportunities.
When they were nascent tech startups, nobody put much faith in companies like Google (GOOGL), Amazon (AMZN) or Apple (AAPL). Even Warren Buffett turned his nose up at Apple at first, missing out on its largest gains.
(For the record, he later caved and bought 915 million shares for $31 billion. Today, that investment’s worth $176 billion — a 467% increase.)
But since they went public, those three tech giants have seen shares appreciate 4,692.62%, 147,966.67% and 127,478.57%, respectively.
In 2023, we’re looking at a similar opportunity in AI.
Industry leaders like NVIDIA (NVDA), with its 221.47% year-to-date gain, are no-brainers. But most investors can’t afford $460 shares.
So if fractional investing isn’t your thing, you have to look for companies with enormous upside and fundamentals that are as safe as possible given that (1) they’re unlikely to be profitable, (2) certainly won’t be dividend-payers and (3) are in a highly competitive facet of the tech sector.
Our pick is C3.ai (AI). You can’t find a stock with a more fitting ticker. Even Cheesecake Factory (CAKE) and Dave & Buster’s (PLAY) come up short.
C3.ai specializes in “enterprise AI,” meaning it combines proprietary AI with software designed to meet organizations’ needs. And its shares are already off to the races. Since the beginning of the year, they’re up 162%.
The stock’s extremely volatile, though, as most emerging tech equities are. Throughout the year, it’s seen a high of $46.37 and a low of $11.07, with numerous peaks and troughs between.
C3.ai’s price-to-earnings ratio is currently -11.8. Low P/E ratios can be indicative of undervalued shares, but negative P/E ratios are indicative of negative earnings per share. However, it’s not uncommon for tech startups to burn through a lot of cash. This instance is no different: a cash burn of $187 million this year, which accounts for roughly 5.5% of its market cap.
But analysts are projecting the company to reach break-even in the near future, and among C3.ai’s customers are numerous members of the Fortune 500 as well as branches and divisions of the armed services, including: Shell (SHEL), Koch Industries, Cargill, Raytheon (RTX), Baker Hughes (BKR), the U.S. Army, the U.S. Air Force, the Department of Defense’s Missile Defense Agency and the Defense Innovation Unit, Lockheed Martin’s F-35 Lightning II division, and utilities giants Duke Energy (DUKE) and ConEdison (ED).
The Wall Street Journal gives the stock a high-end, one-year price target of $50. Shares are currently trading for $29.15, good for a potential 71% increase.
TL;DR
The WGA strike is shedding light on the vocational threats posed to workers by AI. For better or worse, the technology’s going to change the world. With groundbreaking tech comes abundant investment opportunities. Always, conduct your own due diligence. But don’t let this chance to invest in potentially pioneering tech pass you by without at least considering it.