Talk about a disaster.
When Google launched its Gemini AI service a couple of months ago…
It quickly became a laughingstock…
With a touch (Editor’s note: more than a touch) of rage mixed in.
Even today, Gemini isn’t fully functional. It’s still there. You can ask it things. But it mostly says it can’t help with the request.
And if you ask it something a little ‘edgy,’ which would previously have given a ‘woke’ answer… you can sense the replies come back through gritted teeth.
Yes, it seems that even artificial intelligence can give you an attitude!
But anyway, back to our point. Is the AI boom over? Already? Even though it seems as though it barely got going?
We’ll share our – perhaps premature – take below. First, catch a load of today’s market action…
Market Data
The S&P 500 closed down two points to end the day at 5,202.39… the NASDAQ added five points to close at 16,253.96.
In commodities, West Texas Intermediate crude oil trades at $86.53, down 18 cents…
Gold is $2,357 per troy ounce, up $15 from Friday…
And bitcoin is $71,735, up $4,356 since Friday.
And now, back to our story…
Oh, the Humanity!
We’re fully aware that today’s essay could go down in history as one of those ‘idiot’ moments.
You know the type.
Like those in 1995 who said the internet ‘fad’ had already peaked.
Or like Ken Olsen, the founder of Digital Equipment Corporation, who in 1977 said, ‘There is no reason anyone would want a computer in their home.’
Granted, his notion of a ‘computer’ in 1977 was likely a lot different from our notion of a computer today. If he was talking about massive mainframe computers the size of a double-decker bus, then yes, he was right.
But our interpretation? He was flat-out wrong.
The point is, history is full of examples of folks who say something dumb and then learn the future finds them guilty of being dumb.
We’re prepared to suffer that fate.
We say that based on the following observation.
Google launched its dreadful Gemini AI service all the way back in December 2023 (that’s a little over four months ago).
It all seemed to go off without much fuss… until a bunch of wise guys decided to ask it some, shall we say, ‘loaded questions.’
We’ve covered this before. And no doubt you saw the examples we’re talking about. So we won’t go over old ground here.
The upshot is it showed the Gemini AI system to be worse than bad. It was awful… dreadful… not fit for purpose.
And so, after a couple of weeks of rage, followed by folks just laughing at it (oh, people can be cruel), Google decided to take it offline.
If it’s possible to take a bunch of software and hardware out to the woodshed and put it out of its misery, Google should have done that. Instead, it seems as though it’s trying to stitch it back together.
Google took Gemini AI offline in late February. By that time, AI stocks were booming and had been for the previous 12 months. Even after Gemini’s near demise, AI stocks continued to boom.
But since early March it has been a different story. It’s not that AI stocks have crashed (because they haven’t). They’re just, well, kind of stuck.
We’ve marked with an orange box below the recent AI stock peak:
Source: Yahoo! Finance
See what we mean?
These are all chipmakers. They should all benefit from the so-called AI ‘revolution.’ But where is the revolution? Right now, it seems to be non-existent.
So it makes us wonder… Did the Google Gemini thing just kill any enthusiasm for artificial intelligence? After all, it’s not as though there was widespread excitement for the idea anyway.
If you do a straw poll of regular folks asking their opinion on AI, we’d wager a decent number are more likely to be fearful of it rather than excited about it.
They’re fearful that AI will take their jobs… and they’re fearful that AI will kill us all! No kidding. Even big-wig CEOs are worried about AI.
A survey last year at a Yale CEO Summit said that 42% of CEOs thought AI could destroy humanity in five to 10 years – ‘Oh the humanity!’ (Editor’s note: apologies to Herbert Morrison).
Anyway, we’ll just say this. AI is in a ditch right now. And many stocks that benefited from the boom appear to be heading that way… unless (get ready folks)… unless this is a perfect contrarian play to pick up beaten-down stocks before AI recovers and takes off again.
Could be. We’ll be straight up, though. We wouldn’t be so sure. AI has bad PR. It’s gonna take a lot more than a revamped Google Gemini showing culturally accurate images to get AI back into the good books.
We won’t say that you should sit this one out… but we will say that extreme caution is still the best way to play the AI now and for the near future.
More Markets
Today’s top gaining ETFs…
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Nuveen Short-Term REIT ETF (NURE) +2.8%
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iShares Residential and Multisector Real Estate ETF (REZ) +2.1%
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VanEck Steel ETF (SLX) +2%
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First Trust Brazil AlphaDEX Fund (FBZ) +1.9%
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iShares MSCI Global Metals & Mining Producers ETF (PICK) +1.9%
Today’s biggest losing ETFs…
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VanEck ChiNext ETF (CNXT) -1.3%
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Arrow DWA Tactical: Macro ETF (DWAT) -1.2%
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iShares MSCI China A ETF (CNYA) -0.9%
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VanEck Gold Miners ETF (GDX) -0.7%
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Fieldstone UVA Unconstrained Medium-Term Fixed Income ETF (FFIU) -0.7%
Cheers,
Kris Sayce
Editor, The Daily Cut