Who did it better? MSTR or NVDA?
29 February 2024
Welcome to AI Collision,
In today’s collision between AI and our world,
140% in three months
406% in one year
iSink for $15,999
If that’s enough to get the bitcorn popping, read on…
AI Collision 💥 crypto 🤝 AI
Yes, we are supposed to focus on AI here at AI Collision 💥. And we do a pretty good job of regular AI insights…
But sometimes we stray a little off the beaten track.
And now is one of those times.
You see, I’ve been in the bitcoin and crypto markets now for 14 years. It first came on my radar (bitcoin that is) in June 2010. And ever since, it’s lived obsessively in my mind.
It’s also found its way into the millions of words of research I’ve written in the years since.
I remember writing my first book when bitcoin’s price was a few hundred dollars and saying that $50,000 per bitcoin in the future was an outcome I was expecting.
And as you can imagine, I got my fair share of criticism for that view. Through every crypto cycle I tend to get punished by criticism that this thing is a gigantic scam – I still get that feedback from time to time.
Infamously during the 2019 “crypto winter” a reader threatened to meet face to face he was so enraged with my work. I was happy to, but my compliance team suggested that wasn’t a sound strategy.
Nonetheless, while not as viscerally intense as the crypto investment crowd can tend to get, similar feedback does come in regard to AI. When I tell people their fears are overblown and the opportunities are more exciting, I’m again passed off as a bit of a tech-charlatan.
So be it.
Now I’m certainly not here to fish for any kind of praise. If you read my stuff long enough you can make your own judgements on what you like or don’t.
But I am here to say, what we’re seeing in terms of money-making opportunities in both AI and crypto are very similar, and heading in a similar trajectory.
In fact I’d go so far to say to not really bother investing in anything else for a while that isn’t crypto related or AI related.
For at least the next five to six months, that’s where I’d spend all your focus.
This has been coming, but the parallels in where these investment themes are heading makes me look back to something I wrote about last November when I looked at why bitcoin miners were turning to AI.
At the time I wrote,
… much like companies now run applications from “the cloud”, we’ll start to see more and more companies renting AI services from the cloud too.
That means for companies that have plenty of AI-grunt we could be looking at some serious upside as the world goes full AI.
In particular, we’re starting to see a lot of bitcoin mining companies turning their attention (and AI-grunt) to the world of AI and HPC (high performance computing) services.
That’s because bitcoin mining typically uses hardware like Nvidia GPUs to maintain efficiency and operational flexibility.
While they can make a mint from mining bitcoin, they can possibly make more mint from AI and HPC services.
A couple of weeks back, Iris Energy (NASDAQ:IREN) announced that it had entered a partnership with WEKA to “… optimize generative AI workloads…”
The announcement (which you can read here) explains that it’ll use WEKA’s platform, but provide the AI-grunt from the Iris Energy data centres.
It’s not the first bitcoin miner to do this, and I don’t expect it will be the last either.
With the crypto market heating up, and with AI entering what can only be described as mania-levels, looking to companies that can tap into both trends might be worth taking a deeper and closer look at.
That particular company, Iris Energy, was trading at $2.91 when I wrote that piece.
Today it’s around $7.
Some other miners that have turned their eye to AI and HPC have also been on the move too.
Hive Digital Technologies, from $2.85 on 14 November to around $4.50 today.
BitDigital, from $2.10 on 14 November to around $3.30 now.
Now that is strongly aligned with the rise in bitcoin’s price now to over $60,000.
But also remember that these companies are mining new bitcoin, and selling it. So the higher bitcoin goes, the higher their revenues get, the more profits they make and the more they reinvest into capital expenditures like hardware… It’s a fun cycle.
And even if the bitcoin price booms, and busts as it’s done five times prior, these companies will have spent the necessary capital investing in infrastructure that also powers a lot of the AI and HPC infrastructure the “other” investment boom relies so heavily on.
You know, just writing all this down now… it feels like these companies aren’t just bitcoin miners that also do AI. It feels like these are the industrials of the future. These are the gigantic network and telco operators that have been some of the most important companies in history.
Maybe that’s how we should now view these companies, infrastructure and industrial plays. Just with some wild upside potential in a booming crypto and AI market.
AI Gone Wild 🤪
While we’re homing in on crypto and AI-related stocks, it’s only fair to look at two other stocks in these wild investment themes.
You know about Nvidia.
We’ve written at length about it over time.
In fact some of the memes we’re seeing out there now about Nvidia makes it feel like we’re talking about bitcoin.
And Nvidia has been a rockstar of the market over the last year going from around $223 to $773 at the time of writing. An astronomical 246% in a year.
But that’s the AI side of investment themes.
What about the other giant investment theme of 2024, bitcoin and crypto?
Well for that, just cast your eye to MicroStrategy, the company run by “gigachad” Michael Saylor.
MicroStrategy has gone from around $190 a year ago to $962 at the time of writing. That’s an even more bonkers 406%.
MicroStrategy is now a “bitcoin development company” which is aligned with its holdings of hundreds of thousands of ₿ on the books.
And with a market cap of just $16 billion, it’d still need to 100x from here to even get near Nvidia’s size.
And that… well, that’s just… impossible?
🤔
Who knows how high bitcoin will run and how high MicroStrategy will run after it. What I do know is that Nvidia and MicroStrategy represent perfectly two of the biggest investment themes of our lifetime.
Boomers & Busters 💰
AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).
Boom 📈
Lantern Pharma (NASDAQ:LTRN) up 30%
BigBear.ai (NASDAQ:BBAI) up 62%
Appen Ltd (ASX:APX) up50%
Bust 📉
Alphabet (NASDAQ:GOOG) down 4%
Brainchip (ASX:BRN) down 11%
Predictive Oncology (NASDAQ:POAI) down 17%
From the hive mind 🧠
Yeah, we were right, Google messed up, big time. And now the CEO has come out to say as much. Is this the end for Puchai at the helm of Google?
From one trillion-dollar company CEO to another. But this one is the foundation of AI, and he reckons every country needs to lock down their AI infrastructure.
Apple ditched their efforts on a car. But that means they’re now turning to finally drop something big about AI.
Artificial Polltelligence 🗳️
Keeping on the theme of mega theme investing in 2024, here’s today’s poll…
Weirdest AI image of the day
iSink for only $15,999 – r/Weirddalle
ChatGPT quote of the day
Artificial intelligence will reach human levels by around 2029. Follow that out further to, say, 2045, we will have multiplied the intelligence, the human biological machine intelligence of our civilization a billion-fold." - Ray Kurzweil
Thanks for reading, see you next week (and don’t forget to leave your comments below)
Sam Volkering
Editor-in-Chief
AI Collision
I love all you write Sam.. No worries.. BTW, here's another newbie: https://ideogram.ai/ :-)