The AI Race Is Getting Harder to Predict, and That’s the Opportunity
Hello, Reader.
Slow and steady wins the race. That old saying has guided everyone from tortoises to marathon runners. But it needs an update in the age of artificial intelligence:
Slow and steady AI development might save the human race.
Some of the people building the world’s most powerful AI systems are warning that the technology is advancing faster than our ability to control it.
Anthropic CEO Dario Amodei published a 3,800-word essay this past weekend, calling for the AI industry to slow the pace of development to allow safety measures to catch up. This warning came just days after 27-year-old Anthropic researcher Jacob Coxon quit and accused Anthropic and OpenAI of racing toward superintelligence while “gambling with our lives.”
Other prominent AI leaders have since backed Amodei’s concerns, and AI-related stocks sold off on Monday. (At the same time, cybersecurity stocks benefited from the growing focus on AI safety and security.)
That puts a rather large question mark at the end of the AI race. “Slow and steady” may keep the track from blowing up. But the people building AI are openly questioning whether they can slow it down safely. So why do they keep pushing ahead at full speed?
In today’s Smart Money, let’s examine that contradiction – and why the uncertainty surrounding AI could point toward a different kind of opportunity.
The $2 Trillion Contradiction
While Anthropic’s CEO is calling for slower AI development because of catastrophic risks, the company is still preparing to go public this year.
Anthropic confidentially filed IPO paperwork with the SEC in June, although the final valuation, offering price, and timing have not been set. Investors have reportedly discussed a potential valuation as high as $2 trillion, but that figure comes from market expectations, not Anthropic itself.
And that creates a two-trillion-dollar contradiction.
The AI industry is warning that its technology may be moving too quickly for humanity to safely control. But investors are simultaneously putting extraordinary valuations on the companies developing that out-of-control AI.
If AI really does have a chance of destroying humanity, then a $2 trillion valuation for an AI company becomes a pretty strange investment thesis. And if the machines really do inherit the Earth – and economy – who exactly is left holding the shares?
Existential questions aside, that contradiction extends beyond any Anthropic IPO – showing up in the conflicting views of AI executives and the reaction across AI-related stocks.
Since AI fears came roaring back late last week and over the weekend, Sam Altman has said that “right now would be an ill-advised moment” for OpenAI to go public. And Nvidia Corp. (NVDA) CEO Jensen Huang pushed back on Tuesday against halting development, calling any new laws or regulations “completely unnecessary.”
After selling off on Monday, semiconductor and other AI infrastructure stocks have recovered some of their losses. But many remain below where they started the week as questions linger over what a slower pace of AI development could mean for the massive spending boom.
That’s the problem we now face: Nobody knows exactly which version of the future is coming. The bag may be mixed, but it still sits elephant-sized in the middle of the trading room. It can’t be ignored, but we also don’t exactly know what to do with it.
And that, I believe, is the opportunity.
Because the safest way to invest in an unpredictable AI future may be to own companies that don’t require you to predict it.
Investing for Any AI Future
Maybe AI becomes the most transformative technology in human history. Maybe regulators slow its development. Maybe the AI boom eventually goes bust.
Or maybe the technology becomes so powerful that controlling it becomes the biggest challenge of all.
There is one strategy that doesn’t require knowing these answers: investing in AI Survivors.
AI Survivors aren’t just businesses that can survive AI disruption. They’re ones that can survive the uncertainty surrounding AI itself. Let’s consider a few different potential outcomes:
1. AI keeps accelerating.
In this scenario, AI continues spreading into more industries, threatening companies whose business models depend on human labor. However, the AI Survivors that sell physical experiences, products, or services that are difficult to replace with software are less exposed to direct AI displacement.
2. AI development slows because of safety concerns.
If governments or regulators pump the brakes on frontier AI, the massive spending behind the AI boom could slow with it. Companies tied to data centers, chips, and other AI infrastructure could feel the impact. AI Survivors, however, don’t need that spending spree to keep growing.
3. AI becomes genuinely dangerous or uncontrollable.
This is the most extreme scenario raised by Amodei and others. In that world, companies that depend heavily on AI could face serious disruption. AI Survivors built around essential goods, physical experiences, and human needs can remain valuable even if society puts tighter limits on AI.
4. The AI boom becomes a bubble.
If the $2 trillion Anthropic valuation shows that AI stocks have gotten ahead of themselves, investors could pull money out of AI stocks. But AI Survivors aren’t dependent on AI enthusiasm or sky-high valuations, so their investment case doesn’t rely on the AI boom continuing indefinitely.
AI’s biggest opportunity may not be in predicting what comes next, but in owning the companies that can survive whatever comes next.
In other words, the smartest way to play the AI race may be to own companies that don’t need to run it at all.
You can click here to learn how to access all of my AI Survivor recommendations.
Regards,
Eric Fry
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