February 13, 2025
By Peter Bower
This is an observation that as a resource becomes cheaper, perhaps by technological improvements or efficiencies, the use goes up. The price may go down but because so much more is used, providers make more money. This may be applied to Artificial Intelligence. As it becomes cheaper through innovation, providers may indeed make even more money because the use cases expand so rapidly.
DeepSeek, the new Chinese AI model, may offer innovations that make AI creation and use much cheaper. Investors’ first take on this was that companies providing models for use and those building out the necessary infrastructure would be hurt. Now it seems maybe this was too simplistic a reaction. If Jevons paradox comes into play, then use may expand so rapidly that providers may benefit.
It often happens in markets that careful analysis yields a different conclusion from the initial take. This is why knee-jerk reactions are often harmful. The Bull and his partners remain optimistic about the investment opportunity that Artificial Intelligence offers. It is a new industrial revolution, and we can’t begin to imagine all the uses and how deeply it will affect our lives. It is a great time to be an investor! Stay steady my friends.
-The Lonely Bull
