Chief Investment Strategist, The Freeport Society
“You’re not going to get an economic revolution out of that 5%.”
That’s renowned MIT economics professor Dr. Daron Acemoglu.
By his calculation, over the next decade, artificial intelligence (AI) will take over only 5% of jobs in America.
As far as he’s concerned, that means Wall Street’s AI frenzy is overcooked. And we’re heading for a market crash.
We may one day get a market crash. They’re part of the investing landscape. Always have been.
But Acemoglu is wrong about the economic revolution part.
Comically, absurdly wrong.
Today, I’ll show you why. I’ll also throw the spotlight on an opportunity to invest at the ground floor level of one of the most exciting trends in AI and automation…
…one that involves the world’s richest man and legendary tech pioneer, Elon Musk.
Freeing Up Hours of Time
The U.S has a workforce of 168 million people.
Going by Acemoglu’s calculation, over the next 10 years, AI will take over 8.4 million jobs.
To put that into perspective, there are 4.2 million private sector jobs in New York City.
On what planet is that not an economic revolution?
And these are just the jobs AI will replace. We haven’t even touched on jobs it will enhance. The International Monetary Fund puts that number at 60% for the U.S. and other advanced economies.
Already, it’s not hard to believe.
As regular readers may know, I live in Lima, Peru. And I’m married to a Peruvian. I speak solid Spanish at a conversational level. But put me in a boardroom, and I’ll embarrass myself. My business Spanish is somewhere between Tarzan and Borat in terms of sophistication or polish.
Well, last week, I used ChatGPT to write a business letter in Spanish to resolve an issue at a local bank. What would have taken me several hours for a shameful result took five minutes – including tweaking and editing the AI’s draft.
That freed up hours of my time. And it allowed me yo spend time on more productive and enjoyable tasks, like researching and writing The Freeport Navigator!
Multiply that kind of time saving across the economy, and it’s revolutionary at least on a personal level.
It’s even more economically impactful when companies do it.
Kitchen Work Going to the Bots
Fast-food chain Chipotle is a good example.
Yes, I mention Chipotle a lot in these missives, but not because I love their burritos. At least that’s not the only reason.
The company is a fascinating case study in the use of “cobots,” or collaborative robots.
They’ve already rolled out Autocado. It’s a machine that can peel, cut, and core an avocado in just 26 seconds. And it joins Augmented Makeline, a machine that makes salads and burrito bowls.
And these aren’t party tricks. Chipotle’s management understands the automation revolution that’s coming. And they’re getting in front of it.
They’re not alone.
Fast-food rivals Taco Bell, McDonald’s, Wendy’s, Domino’s Pizza, Domino’s Pizza, Bojangles, Hardee’s, and Carl’s Jr. are using AI and automation to streamline their businesses.
This is not technological advancement for its own sake.
This is a matter of do or die.
Automate or Die
America’s working-age population leveled out around 2016 and hasn’t had meaningful growth since.
Right now, young workers are just barely replacing retiring Baby Boomers.
By 2027, the number of Americans turning 65 – the traditional retirement age – will exceed the number turning 16 for the first time.
Even if we can entice aging Boomers to work for a few extra years, there aren’t enough new workers in the pipeline to meet the needs of a growing economy.
It’s automate or stagnate.
It’s automate or die.
So, corporate America is throwing billions of dollars – $67 billion in 2023 according to The Vanguard Group – into AI research. And estimates of spending on AI hit $248 billion next year.
Unfortunately, not everyone seems to get that.
Harold Daggett, the union boss who led the recent longshoreman strike, said in a profanity laced rant that his members were “steadfastly against any form of automation – full or semi – that replaces jobs or historical work functions.”
It’s Daggett’s job to represent workers. But to say his stance is stupid and self-defeating is an understatement.
By this rationale, we’d still have human workers manually operating elevators… setting pins in bowling alleys… routing phone calls on a switchboard… and thousands of other soul crushingly boring “historical functions” no sane person would want to do.
The jobs AI and automation are replacing will be no different. And given the demographically driven labor shortages in front of us, the workers made redundant by AI will be needed elsewhere.
If Daggett truly cared about the wellbeing of the workers he represents, he’d be pushing employers to train them in how to use new technology to do their jobs more efficiently. Then he’d demand higher wages for their enhanced productivity.
Instead, he’s guaranteeing they sink into irrelevance.
How to Stay Relevant in the AI Age
I know change can be scary… especially when it’s moving at an exponential pace.
But don’t sink into irrelevance along with Daggett and his longshoremen.
Technological advances are inevitable. Nothing any of us say or do will stop it.
So, embrace it.
Upskill yourself in the art of AI so you can use the tools to your advantage… just like I did with that letter to the bank.
And invest in it, too.
As I’ve been writing to you about in these pages, for clear-eyed investors, this is one of those fortune making moments in human history.
It’s on the scale of the Industrial Revolution in the late 18th and early 19th centuries and the Information Revolution, which kicked off in the 1990s with the mainstreaming of the internet.
And one of the best ways to profit right now is by investing early in the mainstreaming of another breakthrough automation technology – robotaxis.
That’s the latest call from colleague and tech investing expert Luke Lango.
Luke works with our friends over at InvestorPlace. And he has one of the best track records of any investor I know.
In 2020, he was ranked world’s No. 1 investor by TipRanks.
And open recommendations in the model portfolio at his Innovation Investor advisory include a 405% gain on optical communications company Fabrinet… 1,877% gain on AI chipmaker Nvidia… and a 26,335% on crypto innovator Ethereum.
And he’s uncovered some of the world’s fastest growing stocks before they took off – including Advanced Micro Devices (1,000%-plus returns), Shopify (1,000%-plus returns), Tesla (1,000%-plus returns), electric carmaker NIO (1,000%-plus returns), and education technology company Chegg (2,000% returns).
Why is Luke so excited right now about driverless taxis services?
Robotaxis Are Going Mainstream
Luke already regularly takes Google-made Waymo robotaxis in his hometown of Phoenix, Arizona.
That’s because they’re cheaper than a regular Uber ride.
For instance, he recently flew into Phoenix’s Sky Harbor International Airport. He was about to take an Uber home, which would have cost about $45. Then he opened the Waymo app and saw that a driverless ride would cost $26. So, he picked Waymo.
And as he’s been showing his readers, Waymo will have robotaxis up and running in five major U.S. cities next year through a partnership with Uber – San Francisco, Phoenix, Los Angeles, Atalanta, and Austin.
It doesn’t stop there. As Luke says,
In time, robotaxi services like Waymo will be available in every city in the world. If so, they will likely put human-powered ride-hailing services out of business.
But they will do so at meaningfully higher profit margins than with their current services.
Uber has fetched a $150 billion valuation despite having to shell out about 75% of each ride’s fare price to its drivers. Now, imagine if it didn’t have to do that – because there wasn’t a human driver ferrying its passengers.
Profits in a robotaxi service could be 4x what they are in a human-powered ride-hailing service.
If Uber’s human-powered service is valued at $150 billion, a robotaxi service of similar size with 4x bigger profits could be valued at $600 billion.
Nothing in life is a sure thing. But in our capitalist economy, an increase of profits on that magnitude is damn hard to resist.
Elon Musk Wants a Slice of the Profits
The power of this model isn’t lost on the world’s richest man, Elon Musk.
Next Friday, October 10, Musk will unveil Tesla’s new robotaxi service at his much anticipated “We Robot” event.
And Luke says it will be the tipping point for robotaxis to go mainstream in 2025.
That’s why, on Monday, October 7, at 10 a.m. ET, he’s hosting an event to show us why this trend is unstoppable and how profit from it.
And at the center of it all is a sub-$3 stock that could play a pivotal role in turning Musk’s driverless world into a reality.
I’ll be there. And I hope you’ll clear time in your schedule to join.
It’s free to attend. And Luke will give away the name and ticker symbol of another play on Musk’s robotaxi that could 10x your money in the coming years, no strings attached.
You can sign up and reserve your spot for Luke by going here now.
To life, liberty, and the pursuit of wealth.
P.S. Luke has a history of predicting some of the biggest tech trends of our time.
For example, as early as 2015, when virtually nobody was talking about AI, he started to recommend shares of the three biggest players in the area…
This gave his readers a chance to turn $10,000 into as much as $90,000 into AI pioneer Microsoft.
Luke also gave his readers the chance to turn $10,000 into as much as $1.1 million in AI chipmaker Advanced Micro Devices.
And on Monday, he’ll show you how you could potentially turn $10,000 into a six-figure payout with Elon Musk’s new AI product. So, make sure you’re signed up by following this link.