Coming Soon: ‘The Great American Last Frontier’

Two artificial intelligence (“AI”) stories caught my interest recently. Both demonstrate how significant this technology has become.

Most investors have been captivated by the movements of AI stocks since late 2022. All of a sudden, every headline seemed to have something to do with AI.

Nvidia (NVDA) became an instant idol, with every other big tech company vying for their piece of the hype. “The Magnificent Seven” began to dominate the markets, taking them up, up, and away while almost everything else lagged behind.

It was easy to get in on the AI hype. The possibilities of what this disruptive technology could accomplish seemed endless.

But, at the time, a lot of the hype surrounding it was still fairly theoretical.

It’s not theoretical anymore…

The real impacts of artificial intelligence are starting to be felt. And not everybody is happy about it.

Swedish financial tech (fintech) company Klarna serves as one stark example. When CEO Sebastian Siemiatkowski sat down with CNBC last Wednesday, he made this shocking statement:

The truth is the company has shrunk from about 5,000 to now almost 3,000 employees. If you go to LinkedIn and look at the jobs, you’ll see how we’re shrinking…

We have simply communicated to our employees that what we’re going to do is we’re going to shrink. So we’re going to stop hiring.

And while “natural attrition” plays into that picture, so does artificial intelligence. Klarna simply doesn’t see the need for humans like it used to.

The AI Problems Don’t Stop There

For longtime readers of mine, this shouldn’t be a surprise. Last year, I published a special report outlining the large, disruptive changes coming as a result of the adoption of AI (Wide Moat Letter members can catch up here).

As I said at the time:

A new technology is poised to disrupt great swaths of the global economy. It will bring new efficiencies and tools to the workforce. But it will also change the nature of how we work. And yes, it very likely will eliminate, or at least lessen demand for, some jobs.

That technology, of course, is artificial intelligence (“AI”). And the changing nature of work and the economy as a result of AI is a multiyear trend I call “The Rupture.”

The Rupture appears to be going strong…

That kind of AI capability is great news for companies. Reducing labor costs means wider margins and, all else equal, higher earnings.

It’s horrible for employees. Frankly, I can’t imagine working for Klarna right now, living under the constant threat of losing my job.

Remember: We saw this same issue come to a head last September with the dockworkers’ strike. Before that, it was the Hollywood actors and writers, as well as the United Auto Workers (UAW), in 2023.

They all knew their livelihoods were in serious jeopardy because of artificial intelligence. And the same goes for:

• Graphic designers

• Paralegals

• Engineers

• Computer programmers

• Market researchers

• Data entry clerks…

That’s the short list.

Really, AI has the chance of disrupting absolutely everything we do. Only two months ago, Bill Gates told Jimmy Fallon that most human jobs will become obsolete within the next decade.

Despite being on a comedy show, he wasn’t joking.

That raises obvious and dire economic questions about how people will survive under this AI takeover. And, in the meantime, there are plenty of ethical questions to consider.

Take the other AI-related new story that caught my attention, this one from The New York Times. It was about professors increasingly using programs like ChatGPT.

The article begins by citing Ella Stapleton, who just graduated from Northeastern University. She realized last semester that her business professor had used AI to create a lesson on leadership models.

Moreover, this wasn’t the first time it had happened despite how she and other students would face significant academic repercussions if they did any such thing. So, she’s now seeking a full $8,000-plus refund for the class.

It will be very interesting to see where Stapleton’s complaint goes considering how common this professorial double standard is becoming. Clearly, some kind of rules and strategies need to be established before AI takes over everything and everyone.

This is where President Trump’s “Big, Beautiful Bill” comes into the equation.

The AI Component Few Investors Know About

Most economists and market analysts are focused on the tax cuts part of the Big, Beautiful Bill. They’re taking sides on whether it will lead the country into even more massive amounts of debt or not.

But there’s a lot more to Trump’s proposition than the mainstream media recognizes. I’ll admit even I probably wouldn’t have known a thing about this particular AI piece if not for a contact of mine.

A few months back, I met this individual down in West Palm Beach. He’s a multimillionaire (going on a billionaire), and his knowledge of the data center sector is unmatched.

He’s very well-connected and educated in this space, sitting on several related boards in both the private and public sectors. And I speak with him frequently to gain insight into what’s going on in the data-center industry.

Over dinner at Mar-a-Lago recently, I asked him if he could provide me with his views on AI… only to be shocked at his answer. It has sent me on a deep investigation.

You see, buried deep inside Trump’s 1,116-page bill being debated right now is a section titled “The Great American Last Frontier.” If passed, it would declare AI a matter of national infrastructure and assume exclusive regulatory control over its development and deployment.

For decades, AI policy in the U.S. has been set state by state and even city by city. In fact, last year alone, there were more than 550 related bills introduced across 45 states.

As part of the Big, Beautiful Bill, the Great American Last Frontier would change all that… funneling AI technology and its possibilities through one single regulatory channel.

The result could be enormous, streamlining systems like Medicare, Veteran Services, Homeland Security, and so much more – while hopefully protecting or even creating our economic safety and individual opportunities.

In short, AI will no longer be just a tech innovation. It will be governed just like water, energy, and transportation, operating like the critical service it’s fast becoming.

I’m meeting with my data center contact again in a few weeks to get even more details on where this could lead. The investment possibilities seem endless, at this point, and I can’t wait to narrow them down to the best of the best.

I’ll fill you in as I get more information!

Regards,

Brad Thomas
Editor, Wide Moat Daily