Suppose you ask a Large Language Model (LLM) the same question several times. Why do you get a different but related answer? For example, I asked ChatGPT the following question 3 times, Question: Explain Artificial Intelligence in 20 words or less? Answer 1: AI is technology that enables machines to learn, reason, and make decisions, […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-11-21 02:22:462024-11-21 02:22:46The brain inside a Large Language Model is a random number generator
So it looks like we will get to see who wins out of the Godzilla Government v King Kong Elon Musk battle now that the US election has delivered Trump back to the White House. I argued that this will be worth electing Trump alone. Musk is confident of being able to strip out $2 […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-11-18 05:20:552024-11-18 05:20:55How much is that DOGE in the window? A lesson in Government
With campaigning by Trump and Harris having effectively completed, it now comes down to the grubby business of voting – if you have not already done so. Some observations… Early voters are people who just want to get it over with. US election campaigns are excessively long, compared with the UK system where a 6 […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-11-05 07:39:112024-11-05 07:39:11US Election-eve special
Michael Milken is generally regarded as the father of the Junk Bond market. His innovation extended high yielding debt to companies to ensure that profits would be paid out to investors rather than held as retained earnings. The theory is that forcing companies to pay out profits is better than leaving those companies to invest […]
I have argued before that Elon Musk is Minimum Average Cost man. Minimum Average Cost is the long-run equilibrium cost for producing a good or service and the point where marginal cost equals average cost which also equals price in equilibrium. Musk’s biography is peppered with examples where he strips out cost from his car […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-10-11 01:18:252024-10-11 01:22:40Godzilla Government v King Kong Elon Musk
Why are exit polls so accurate while pre-voting intention polls largely rubbish? The UK election showed this stark reality where opinion polls leading up to the election showed a close race whereas the exit poll accurately measured a Labour Party landslide victory with an 80 seat majority (in actuality the majority came in at 82). […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-09-27 02:31:032024-09-27 02:31:03US Presidential election: if you dont have anything to say then start singing
Token2049 is a crypto initiative that has stormed Singapore and Dubai. As its name suggests, the event brings together the crypto community to muse over the technology and position of digital assets 25 years from now. Some observations, Despite the 25 year future prediction horizon, the events seem very much rooted in the present and […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-09-18 02:58:142024-09-18 02:59:07Token2049 is soooo this decade
The US Federal Reserve and Interest Rates… After 2 decades with US interest rates way below their long-term target (the ‘neutral policy position’ is about 4% for cash), the Federal Reserve must be feeling comfortable. Yetserday’s CPI print is the first negative month-on-month figure, a few more of which might put the inflation bear to […]
What is it about human thought and creativity that cannot be captured by a computer? I have always said that humans are smart but slow, while computers are dumb but fast. A human plus a computer is very powerful. Generative AI is all about making computers think for themselves. Despite the doomsday warnings and related […]
https://www.firstdegree.asia/wp-content/uploads/2018/04/logo.png00Stephenhttps://www.firstdegree.asia/wp-content/uploads/2018/04/logo.pngStephen2024-06-28 05:21:272024-06-28 05:22:06Speed is not the solution to Generative AI
One of the profound results from Neo-Classical price theory is that, in long run equilibrium, production costs tend will equal their Minimum Average Cost (MAC). Profit maximising firms compete away any profits they may earn so that the most cost efficient solution is obtained. In long-run equilibrium, the production cost curve sits neatly at the point where the product’s price just matches Minimum Average Cost and Marginal Cost simultaneously. This school boy result, P=MC=MAC, masks the complexity of the competitive market dynamic that drives producers to adopt the latest technologies, allocate resources efficiently and at the same time make zero profits. How is this optimum and equilibrium achieved?
I am reading Elon Musk’s biography and it strikes me that his gift is being able to cut costs to reach the MAC for producing cars, spacecraft, solar roofs or any other product that he makes. The method he adopts has 2 steps. First, cut out processes that are beyond the necessary physics underlying the product being produced. Second, if you cut too far you should add back features that are deemed necessary. Importantly, in this second step, if you don’t add back anything then you haven’t cut far enough.
The examples in his production of rockets are exemplary. Musk elects to use stainless steel in his spacecraft, as opposed to expensive metal allows, because it is cheap. His cars have a single die-cast chassis for the same reason. Whereas he had set out to replace all humans with robots at Tesla, he added back some manual features to cut delay in the production line. Being the minimum cost producer in the industry offers an enormous advantage for securing long-term funding as well.
Viewed in this way, Elon Musk is neither a visionary technologist nor a serial innovator. He is a cost cutter. He has a knack for identifying bloated industries that operate on favourable economic terms (e.g. the rocket ship industry was incentivised to produce on a cost + 10% contract basis meaning higher costs implied higher profits!), which he streamlines (say, by reusing the rockets used for propulsion). Understanding the physics of the product being built, and constructing just to that level is his skill.
There is a video doing the rounds that criticizes Tesla for just using cameras on their driverless vehicles, dumping LIDAR and RADAR as additional, supporting systems. This clearly cuts costs and increases collision risks but there is no reason that the risk of a collision should be reduced to zero in equilibrium. This is difficult for regulators to comprehend but Elon is fine with it.
The brain inside a Large Language Model is a random number generator
Suppose you ask a Large Language Model (LLM) the same question several times. Why do you get a different but related answer? For example, I asked ChatGPT the following question 3 times, Question: Explain Artificial Intelligence in 20 words or less? Answer 1: AI is technology that enables machines to learn, reason, and make decisions, […]
How much is that DOGE in the window? A lesson in Government
So it looks like we will get to see who wins out of the Godzilla Government v King Kong Elon Musk battle now that the US election has delivered Trump back to the White House. I argued that this will be worth electing Trump alone. Musk is confident of being able to strip out $2 […]
US Election-eve special
With campaigning by Trump and Harris having effectively completed, it now comes down to the grubby business of voting – if you have not already done so. Some observations… Early voters are people who just want to get it over with. US election campaigns are excessively long, compared with the UK system where a 6 […]
The Private Debt renaissance
Michael Milken is generally regarded as the father of the Junk Bond market. His innovation extended high yielding debt to companies to ensure that profits would be paid out to investors rather than held as retained earnings. The theory is that forcing companies to pay out profits is better than leaving those companies to invest […]
Godzilla Government v King Kong Elon Musk
I have argued before that Elon Musk is Minimum Average Cost man. Minimum Average Cost is the long-run equilibrium cost for producing a good or service and the point where marginal cost equals average cost which also equals price in equilibrium. Musk’s biography is peppered with examples where he strips out cost from his car […]
US Presidential election: if you dont have anything to say then start singing
Why are exit polls so accurate while pre-voting intention polls largely rubbish? The UK election showed this stark reality where opinion polls leading up to the election showed a close race whereas the exit poll accurately measured a Labour Party landslide victory with an 80 seat majority (in actuality the majority came in at 82). […]
Token2049 is soooo this decade
Token2049 is a crypto initiative that has stormed Singapore and Dubai. As its name suggests, the event brings together the crypto community to muse over the technology and position of digital assets 25 years from now. Some observations, Despite the 25 year future prediction horizon, the events seem very much rooted in the present and […]
The Fed…the UK, Trump and Biden
The US Federal Reserve and Interest Rates… After 2 decades with US interest rates way below their long-term target (the ‘neutral policy position’ is about 4% for cash), the Federal Reserve must be feeling comfortable. Yetserday’s CPI print is the first negative month-on-month figure, a few more of which might put the inflation bear to […]
Speed is not the solution to Generative AI
What is it about human thought and creativity that cannot be captured by a computer? I have always said that humans are smart but slow, while computers are dumb but fast. A human plus a computer is very powerful. Generative AI is all about making computers think for themselves. Despite the doomsday warnings and related […]
Elon “MAC” Musk
One of the profound results from Neo-Classical price theory is that, in long run equilibrium, production costs tend will equal their Minimum Average Cost (MAC). Profit maximising firms compete away any profits they may earn so that the most cost efficient solution is obtained. In long-run equilibrium, the production cost curve sits neatly at the point where the product’s price just matches Minimum Average Cost and Marginal Cost simultaneously. This school boy result, P=MC=MAC, masks the complexity of the competitive market dynamic that drives producers to adopt the latest technologies, allocate resources efficiently and at the same time make zero profits. How is this optimum and equilibrium achieved?
I am reading Elon Musk’s biography and it strikes me that his gift is being able to cut costs to reach the MAC for producing cars, spacecraft, solar roofs or any other product that he makes. The method he adopts has 2 steps. First, cut out processes that are beyond the necessary physics underlying the product being produced. Second, if you cut too far you should add back features that are deemed necessary. Importantly, in this second step, if you don’t add back anything then you haven’t cut far enough.
The examples in his production of rockets are exemplary. Musk elects to use stainless steel in his spacecraft, as opposed to expensive metal allows, because it is cheap. His cars have a single die-cast chassis for the same reason. Whereas he had set out to replace all humans with robots at Tesla, he added back some manual features to cut delay in the production line. Being the minimum cost producer in the industry offers an enormous advantage for securing long-term funding as well.
Viewed in this way, Elon Musk is neither a visionary technologist nor a serial innovator. He is a cost cutter. He has a knack for identifying bloated industries that operate on favourable economic terms (e.g. the rocket ship industry was incentivised to produce on a cost + 10% contract basis meaning higher costs implied higher profits!), which he streamlines (say, by reusing the rockets used for propulsion). Understanding the physics of the product being built, and constructing just to that level is his skill.
There is a video doing the rounds that criticizes Tesla for just using cameras on their driverless vehicles, dumping LIDAR and RADAR as additional, supporting systems. This clearly cuts costs and increases collision risks but there is no reason that the risk of a collision should be reduced to zero in equilibrium. This is difficult for regulators to comprehend but Elon is fine with it.