EIEIO...Working For The Weekend
EIEIO...Working For The Weekend
A look at the Robotics Revolution
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“There are only two types of companies in the World. Those who are great at AI and everybody else. If you don’t know AI you are going to fail. Period.” – Mark Cuban
“In the 21st Century, the Robot will take place which slave labor occurred in ancient civilization.” – Nikola Tesla
“I am not a robot. I have a heart and I bleed.” – Serena Williams
“People wait all week for Friday. All year for Summer. All life for happiness.” – Anonymous
My Dad got me one job in my life.
It was after my freshman year in college and he pulled strings for me to work on the street crew for the City of Edina. As summer jobs go, I thought it was going to be good. I got to work outside, make decent money and the day was over early.
I had a variety of jobs before that…I delivered newspapers on my bike. I had a thriving lawn mowing business. I shoveled snow which there is a lot of in Minnesota.
Working on the street crew, however, was an experience that shaped a lot of views I have on a lot of things. Probably the greatest lesson I learned, though, was to never have your Dad get you a job.
The day for the street crew started at 7 AM when we got our assignment for the day…which for me was always filling potholes…straightforward enough.
Then I would drive with my colleague, we’ll call him Ray, to the city works plant to load asphalt in our truck. Usually, we’d be waiting in line where nobody was in a rush to do anything.
Once we loaded up our truck with the asphalt, we’d go get a leisurely breakfast somewhere (often it was White Castle hamburgers to offset Ray’s previous evening’s liquor consumption).
After breakfast, we’d head off to the location where we were supposed to get to work. Most days when we got to the address of our assignment, my colleague who had worked for the City of Edina for 22 years at that point (previously he’d been in jail), would look for a place where he could park the truck and take a nap. My job was to play lookout for the supervisor and wake up Ray if he showed up.
While some might look at filling potholes with hot asphalt in the heat of the summer as hard work, I guarantee you it was a lot harder and more stressful to be playing “cat and mouse” with the supervisor all day and doing as little work as we could get away with.
It was an awful job.
Imagine doing that for 22 years. Or even two years. Two months almost killed me.
The sad reality is that nearly 80% of employees either hate their job or are indifferent to it. Given the amount of time people spend working, this obviously isn’t a formula to have a happy life.
Last week, there were two major announcements in the AI Revolution by OpenAI and Google. Check out GSV’s AI Maven
’s take on these announcements and what they mean for education.A Guide to the GPT-4o ‘Omni’ Model | GSV: AI in Education by Claire Zau
A Guide to Google I/O 2024 | GSV: AI in Education by Claire Zau
What’s clear and exciting is that generative AI models are getting faster, cheaper, and better at warp speed. The arms race here is stunning and the price to be in the game is out of reach for all but a few. In addition to the pure plays, Microsoft says it’s spending $50 billion on its data centers for AI compute this year, Google’s spending $12 billion per quarter, and Meta says it will spend $100 billion on its AI initiatives.
While AI is going to change everything in the Digital/Bytes World, it’s also going to be a major accelerant in the Physical/Atom-based Robotics Revolution.
Robots can indeed be viewed as the convergence and embodiment of both the Industrial Revolution's mechanization of physical labor, and the computer/Al revolution's mechanization of cognitive labor.
During the Industrial Revolution, machines took over and augmented human physical capabilities like strength, endurance, and dexterity for tasks like manufacturing, transportation, mining, etc. This mechanized and scaled up the "muscles" that drove productivity.
The computer/Al Revolution then mechanized and amplified cognitive capabilities like data processing, decision making, perception, etc. that were previously limited to the human mind. This allowed the automation of mental labor and information-based work.
Robotics synergistically combines these two revolutions:
They have physical, electro-mechanical components to interact with and manipulate objects/environments, akin to industrial machinery.
But they also integrate computing power, sensors, and Al/ML software to perceive, learn, reason, and make decisions autonomously like computers.
So robots merge the mechanization of both physical ("muscle") and cognitive ("mind") capabilities that were revolutionary in their respective industrial eras. This powerful convergence allows robots to operate intelligently in the real world in ways that neither previous revolution could achieve alone.
Robots equipped with Al represent the next step - an integrated system that can seamlessly combine physical capabilities with cognitive intelligence to augment and even exceed human performance across numerous domains. This "best of both worlds" combination is what makes robots such a potentially transformative force driving the Fourth Industrial Revolution across sectors today. They embody the culmination of mechanizing both the physical and mental aspects of human labor.
Like AI, the potential of robots has been fantasized about for over half a century with even cartoons like The Jetsons portraying a World where Rosie the Robot was your personal maid and other robots were a routine part of industrial work.
Part of what makes the magic happen today with robots is on the hardware side…one great example is LiDAR, or Light Detection and Ranging. LiDAR uses laser pulses to measure distance and create 3D point clouds of the surrounding environment. Technology from our friend Austin Russell at Luminar has reduced the cost 100-fold.
OpenAI, Anthropic, and others have been advancing at breakneck speeds. AI processing combined with robots’ ability to see, listen, and speak takes robotic capabilities from a relatively “dumb” programmed machine into a learning, thinking, and adapting worker.
Last fall, legendary entrepreneur and venture capitalist (first investor in OpenAI) Vinod Khosla published a piece called What The Next 10-25 Years Might Look Like. In it, he said “By 2040 there could be a billion bipedal robots doing a wide range of tasks including fine manipulation. We could free humans from the slavery of the bottom 50% of really undesirable jobs like assembly line and farm workers. This could be a larger industry than the auto industry.”
Ark’s Cathie Wood said the Humanoid Robot Industry could be $1 trillion by 2030.
The Internet of Things trend is also a boost to accelerate the Robot Revolution. The number of devices with computer chips making them “smart” has gone from 8 billion in 2012, to 27 billion in 2022 and is expected to reach 75 billion by 2025. Thermostats, security, fitness trackers, and smartwatches are all examples of devices that can provide perspectives to a robot to make it more effective.
Where we see the earliest adoption of robots is in jobs that are dangerous, disgusting and/or dreary. Currently, there are over 10 million unfulfilled jobs in America, mainly because the people not working don’t want them. Manual labor compensation is 50% of Global GDP or $42 trillion.
Dangerous
Logging
Fatal injury rate: 82 per 100,000 full-time workers
Most common fatal accident: Contact with objects and equipment
Example company: Outreach Robotics
Commercial Fishing
Fatal injury rate: 75 per 100,000 full-time workers
Most common fatal accident: Transportation incidents
Example company: Sea Robotics
Roofing
Fatal injury rate: 59 per 100,000 full-time workers
Most common fatal accident: Falls, slips, and trips
Example company: Renovate Robotics
Disgusting
Sewage Work
Example company: Fluid Robotics
Meat Processing
Example company: Frontmatec
Sanitation
Example company: Gaussian Robotics
Dreary
Assembly Line Manufacturers
Example company: Right Hand Robotics
Warehouse Workers
Example company: GreyOrange
Delivery Drivers/Couriers
Example company: Kiwibot
Modern war is already being fought with drones and AI. Gone are the days of sending countless infantrymen blindly to the frontlines of a battlefield or sending “sacrificial pilots” to ultra-high risk missions.
For example, things like facial recognition technology enable precision targeting that heretofore was unimaginable.
The 2024 CNBC Disruptor 50 List came out this past week and it was dominated by companies in AI and Robotics.
From an investment standpoint, robotics presents a major opportunity to ride the wave in front of us which is of course enhanced by AI.
10 Robotics Companies to Watch
Key Investors: Lux Capital, General Catalyst
Key Investors: Sequoia, Khosla Ventures, General Catalyst
Key Investors: OpenAI, Tiger Global, EQT Ventures
Key investors: Lux Capital, Initialized Capital
Key investors: Hummingbird VC, Plural
Key investors: Eclipse Ventures, BMW i Ventures
Key investors: Anthos Capital, Sozo Ventures, Fuse Venture Capital, Ignition Partners
Key investors: Drive Capital, Founders Fund, XN
Key investors: Nat Freidman, Daniel Gross, John and Patrick Collison, Jack Dorsey, Adam Nash, Naval Ravikant, Avichal Garg, Joe Lonsdale
Key investors: Alphabet
IBM estimates that 40% of the global workforce or 1.4 billion people’s jobs will be disrupted by the AI and Robot revolution. Massive disruption creates massive opportunities.
While some believe the replacement of current jobs by technology means the end of work and the only solution is something like a Universal Basic Income for everybody…I disagree. People are wired to work.
Corporations will need to lean into upskilling, reskilling and strategically develop partnerships with academic institutions as a major priority to compete. Corporate training goes from defense and a cost to offense and an investment.
The time dividend will allow for an unprecedented level of innovation and human flourishing. Entrepreneurship will BOOM.
Individuals who embrace the constant changes with the habit of lifelong learning will be huge beneficiaries of this ERA. The 7 Cs that we have been promoting for years (critical thinking, creativity, communication, collaboration, cultural fluency, civics, and character) will be the foundation from which learning is built.
It’s not Man vs. Machine…it’s Man and Machine. And the winner is humankind.
Market Performance
Market Commentary
The Dow advanced for the fifth week in a row to an all-time record 40,000 level and the S&P 500 exceeded 5300 for the first time. NASDAQ led the big three indexes and was up 2.1% for the week and is up 11.2% for the year.
The major catalyst for the solid performance for stocks was the core inflation number came in at a three-year low of 3.6%. The peak level was the Summer of 2022 with stocks not coincidently peaking six months before. The current BULL Market which started quietly in October 2022 has now advanced over 50% in the past 1.5 years.
Other notable news that caught our eye last week included Google saying that its Waymo driverless car unit had gone from 10K rides a week a year ago to 50K rides a week currently. Also, relatively recently IPO’d Reddit stock surged 14% after announcing a deal with OpenAI.
This week, all eyes are NVIDIA which reports its first quarter results on Wednesday. While it’s highly unlikely the company will announce numbers that are anything short of stunning, we will see if it can satisfy Wall Streets gigantic expectations.
Our thesis for the Market and growth stocks is playing out as articulated….stock participation is broadening and the IPO Market appears to be thawing out. Accordingly, we remain BULLISH.
Maggie Moe’s GSV Weekly Rap
GSV Model Portfolio
Need to Know
WATCH: AI, Robotics & the Future of Manufacturing | The Ben and Mark Show
READ: Plausible Tomorrows | Khosla Ventures
WATCH: From Sci-Fi to Reality: The Rise of Humanoid Robotics w/ Brett Adcock | Moonshots With Peter Diamandis
READ: Editor’s Brief: The Robotics Renaissance | The Generalist
WATCH: Dash Media Interview - The San Francisco Giants “Idea Man” - Pat Gallagher | Going Deep by Dash Media
LISTEN: Ep9. GPT-4o, Astra, Multi Modal, China Tariffs, Tech Earnings | BG2 with Bill Gurley & Brad Gerstner
WATCH: Palmer Luckey Wants To Be Silicon Valley’s War King | The Circuit
GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation. Here’s how these four signals performed last week:
#1: Inflows and Outflows for Mutual Funds & ETFs
#2: IPO Market
#3: Interest Rates
#4: Inflation
Chart of the Week
Chuckle of the Week
EIEIO…Fast Facts
Entrepreneurship: $312 billion - the amount of dry powder amassed by US VC Funds as of Q1 2024 (Pitchbook)
Innovation: $447 billion – the total amount of investment in the semiconductor industry that has been announced in 83 separate projects across 25 states since the passing of the CHIPS Act in 2022. (Financial Times)
Education: Nearly 5 billion – number of free or reduced-price school lunches served to over 30 million public school students during fiscal year 2022. (USA Facts)
Impact: $230 Billion – total assets held in Donor Advised Funds (DAFs) as of the end of 2022 (Ohio State News)
Opportunity: 78% – the percentage of AI users who are bringing their own tools to work (Microsoft)
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Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup….EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
Make Your Dash Count!
-MM
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