What are your views on this? Do you think Amazon could come under pressure?
A second segment(Which retailers could benefit) of this is also at the BNN Bloomberg website. For some reason I cannot copy and paste it.
Shows: Money Talk - MoneyTalk is Canada's premier personal finance show. Every Wednesday, TD’s Kim Parlee talks to industry players who provide you with important personal finance information that you need.
www.bnnbloomberg.ca
In business, there is a purpose and use for Agentic AI. For example, they can reduce the cost based on inference (less burden on token usage due to less efficient GPU usage) and I've already seen this where I work and it works amazing this way. However the biggest risk is people actually the actual data centers themselves because NVIDIA bears the burden of extending the lifespan of that hardware before that becomes inference hardware as well thus the capitalization of leveraging data centers become more of a risk with increased cost of hardware due to the sheer amount of demand itself. I've said it before that this effect is more or less an ouroboros of a capital design because the costs alone would eat into the revenue and destroy any gross profit so the AI stocks you hear about would fight on these memory/GPU contracts and NVIDIA themselves have warned that 70% of their revenue is from five companies alone which they will not name as it's more of a footnote on their 10-Q form which does not require them to report any realized gain from actual delivered goods.
The short answer is, no one really knows how long this can go on for with how each company keeps investing in one another and this by my speculation is more about the private credit lending and their tolerance to allow more borrowing for these companies to keep this up longer and longer with no sight of gross profit at all. The risk therefore is being looked at credit and not the product itself. There's no way these companies can allow themselves to become bankrupt only for someone to scoop up their development for pennies on the dollar, that itself is a HUGE risk on development itself. Investors have made this bubble a true nightmare for themselves because they cannot bear the loss of such an innovative product that can replace, or even change the entire landscape of how digital productivity works.
I don't believe AI can replace every service, but it can most definitely replace a lot of digital products which is why the SaaS-pocalypse is talked about a lot. Look at what's been discussed with Adobe where there's someone that's releasing alpha software that mimics the capabilities of Adobe Creative Suite software. This would absolutely decimate Adobe over time albeit the software that was produced is not as efficient/effective as Adobe's suite, but it should put the fear into companies like Adobe, Microsoft, etc., anyone really that has had such a proprietary hold on companies for so long due to their embedded services with corporate infrastructure. The example I mentioned is a good understanding of replacing a
product, not a service itself. People will still steer for services, but products that were once leased through a SaaS model now comes under fire, so likely soon you'll hear a lot about either integrity, or digital signature for liability in digital creative/generated material.
I personally am looking at how the credit landscape looks, that to me is the biggest risk for the investment itself.
I would also look around investments that support AI, like things that help produce energy for data centers such as the gas turbines which are fairly small and easy to deploy (looking at you ATCO)
EDIT: Sorry for my yammering, to answer your questions:
There's a risk in how the investor talks about using data for dynamic pricing which could impact anti-trust laws so it's still early in the game but these models could impact it if retail stores do not know how to optimize competitiveness with Amazon, because then again, Amazon could take losses on their retail end but still be making profit from their AWS data centres. It really depends but there are many takeaways to understand that it could help push tech to replace jobs that people found very taxing but still doesn't change the underlying requirement to replace inventory on physical shelving. However as systems become more "smart" and embedded with technology, there will be a taxation on customers from said retail. For example, look at how Walmart and Loblaws chains have been using e-ink price tags, this saves many things but still has a fair way to match physical shelving inventory where you still need to optimize inventory spacing with more effective planograms, which long term is not that effective because each location has their own demographic. As things become more optimized though, it could be better, but far from the vision.
