On Netflix, I think the story is much more simple. As someone who lives and breath numbers for living, what's happening here has nothing to do with the data. Netflix content simply sucks. The quality has been going steadily down since covid when people have gotten used to binge watch a title over a single popcorn servings. I don't blame Netflix. Justifying an investment in a House of Cards level production these days is a stretch. And AI isn't making it any easier. I have been a subscriber for more than 15 years and I'm ready to pull the plug out. Two things that kept me over the last couple of years: 1. FOMO (I'm a real estate reality junky and don't want to miss out on Fredrick or Ryan touring another $15M 2-bedroom NYC condo), and 2. My kids watching Gabby's Dollhouse. I have given up on #1, and my kids are graduating from #2. I am looking forward to getting my 20 min back every night browsing nothing to watch.
Ed, you’re totally wrong on this one. Saying “One sector I’d point to: healthcare… AI hasn’t touched it yet” is simply not true.
Healthcare is actually one of the earliest and strongest adopters of AI. And not all AI is text‑based — far from it. A huge portion of healthcare automation, diagnostics, imaging, triage, workflow optimisation, and clinical decision support is already powered by AI systems.
Radiology, pathology, drug discovery, patient‑flow optimisation, surgical robotics, and even back‑office operations are deeply AI‑driven today. In many cases, healthcare is leading other sectors, not lagging behind them.
So if you’re looking for “distance from AI,” healthcare is definitely not it. It’s one of the engines pulling the AI train forward.
The concentration data is striking but the second-order problem is where it gets uncomfortable. If 50% of the S&P is effectively one AI bet spread across six sector labels, the traditional response to overconcentration, sector rotation within the index, doesn't work. The sectors that are supposed to catch the money leaving tech are themselves AI-derived.
So the risk event that keeps me up isn't AI failing on its own timeline. It's the market discovering that the internal hedge doesn't exist. That repricing can happen much faster than any fundamental change in AI's trajectory, because it only requires investors to look at their portfolio and realise they own the same trade six times over.
And as usual, neither you nor anyone else is taking into account the global oil shock from the Iran war.
In August or September, the National Oil Reserve runs out. The only reasons the oil price isn't currently over $100/barrel for futures contracts is the fact that Trump has been dumping the oil reserve, other countries such as China have as well, and China has restricted its buying of new oil for some reason.
This is all going to dry up in August-September. You're looking at a major global recession, if not a depression.
And no, the war will not be ending soon, regardless of what Trump or anyone in his administration says. This war is going to go on, with pauses and restarts, for months - until January at least and probably longer. Iran has at least 15,000 ballistic missiles available and perhaps 40,000 drones. They can keep firing for months. They can also destroy the Saudi pipeline that goes to the Red Sea and Ansarallah in Yemen can close the Bab-al-Mandab Strait at any time, which will cut off even more Saudi oil. In the worst case, Iran can shut down Saudi oil production completely.
There is no chance the US can force open the Strait of Hormuz - it simply doesn't have the military capability, even if it manages to seize an Iranian island or one of the ports, regardless of what you might hear from ex-Pentagon generals on Fox News.
How do you run (un-built) data centers on 4200/barrel oil?
How do you run Wall Street with a massive inflation rate as a result?
How do you get trillion-dollar valuations of companies that can't pay their bills because consumption is down because with the economy in tatters no one can afford high AI development costs because their normal business is down due to inflation and gas prices?
The US population is ignoring this war so far because it hasn't turned ugly. If Trump tries any sort of ground incursion into the Strait, it will turn ugly fast. US troops are dying right now and a lot more will die on any ground incursion. This will make it even harder for Trump to pull out as his base will be screaming for Iranian blood (not to mention the moneyed interests that are backing the war and the Zionist around him who reflect Israeli pressure.)
In addition, Chinese Model Kimi 3 is out, and a new DeepSeek. GLM 5.2 is being touted as "good enough" for developers compared to both OpenAI And Anthropic flgship models at much less cost.
Bottom line: OpenAI and Anthropic haven't seen anything yet.
As IT and AI have evolved over the years a lot of basic common sense left the room or never entered. One of the skills missing is the human interactions necessary to challenge ourselves as well as develop creative ideas that only come from digging into our untouched selves. The attached article on LinkedIn might help:
Sam Altman: We are about to have our best 12 months to date because we’re about to appoint a new CEO 🤷♂️
On Netflix, I think the story is much more simple. As someone who lives and breath numbers for living, what's happening here has nothing to do with the data. Netflix content simply sucks. The quality has been going steadily down since covid when people have gotten used to binge watch a title over a single popcorn servings. I don't blame Netflix. Justifying an investment in a House of Cards level production these days is a stretch. And AI isn't making it any easier. I have been a subscriber for more than 15 years and I'm ready to pull the plug out. Two things that kept me over the last couple of years: 1. FOMO (I'm a real estate reality junky and don't want to miss out on Fredrick or Ryan touring another $15M 2-bedroom NYC condo), and 2. My kids watching Gabby's Dollhouse. I have given up on #1, and my kids are graduating from #2. I am looking forward to getting my 20 min back every night browsing nothing to watch.
Ed, you’re totally wrong on this one. Saying “One sector I’d point to: healthcare… AI hasn’t touched it yet” is simply not true.
Healthcare is actually one of the earliest and strongest adopters of AI. And not all AI is text‑based — far from it. A huge portion of healthcare automation, diagnostics, imaging, triage, workflow optimisation, and clinical decision support is already powered by AI systems.
Radiology, pathology, drug discovery, patient‑flow optimisation, surgical robotics, and even back‑office operations are deeply AI‑driven today. In many cases, healthcare is leading other sectors, not lagging behind them.
So if you’re looking for “distance from AI,” healthcare is definitely not it. It’s one of the engines pulling the AI train forward.
… as already exhibited by KOSPI, gold, silver and Bitcoin. Hyper- concentrated markets are treacherous, and excellent for The Big Short.
We don’t have an AI bubble, we have an OpenAI bubble.
As Ed Zitron says, "OpenAI IS the AI Bubble."
The concentration data is striking but the second-order problem is where it gets uncomfortable. If 50% of the S&P is effectively one AI bet spread across six sector labels, the traditional response to overconcentration, sector rotation within the index, doesn't work. The sectors that are supposed to catch the money leaving tech are themselves AI-derived.
So the risk event that keeps me up isn't AI failing on its own timeline. It's the market discovering that the internal hedge doesn't exist. That repricing can happen much faster than any fundamental change in AI's trajectory, because it only requires investors to look at their portfolio and realise they own the same trade six times over.
"Padre, these are subtleties." -- Sam I. Am, 'A Clockwork Orange' (or was that The Minister?)
Wasn't Sam the guy in "Do the Right Thing" who threw the garbage can through the pizzeria window, triggering the riot? (Or was that Spike Lee?)
And as usual, neither you nor anyone else is taking into account the global oil shock from the Iran war.
In August or September, the National Oil Reserve runs out. The only reasons the oil price isn't currently over $100/barrel for futures contracts is the fact that Trump has been dumping the oil reserve, other countries such as China have as well, and China has restricted its buying of new oil for some reason.
This is all going to dry up in August-September. You're looking at a major global recession, if not a depression.
And no, the war will not be ending soon, regardless of what Trump or anyone in his administration says. This war is going to go on, with pauses and restarts, for months - until January at least and probably longer. Iran has at least 15,000 ballistic missiles available and perhaps 40,000 drones. They can keep firing for months. They can also destroy the Saudi pipeline that goes to the Red Sea and Ansarallah in Yemen can close the Bab-al-Mandab Strait at any time, which will cut off even more Saudi oil. In the worst case, Iran can shut down Saudi oil production completely.
There is no chance the US can force open the Strait of Hormuz - it simply doesn't have the military capability, even if it manages to seize an Iranian island or one of the ports, regardless of what you might hear from ex-Pentagon generals on Fox News.
How do you run (un-built) data centers on 4200/barrel oil?
How do you run Wall Street with a massive inflation rate as a result?
How do you get trillion-dollar valuations of companies that can't pay their bills because consumption is down because with the economy in tatters no one can afford high AI development costs because their normal business is down due to inflation and gas prices?
The US population is ignoring this war so far because it hasn't turned ugly. If Trump tries any sort of ground incursion into the Strait, it will turn ugly fast. US troops are dying right now and a lot more will die on any ground incursion. This will make it even harder for Trump to pull out as his base will be screaming for Iranian blood (not to mention the moneyed interests that are backing the war and the Zionist around him who reflect Israeli pressure.)
In addition, Chinese Model Kimi 3 is out, and a new DeepSeek. GLM 5.2 is being touted as "good enough" for developers compared to both OpenAI And Anthropic flgship models at much less cost.
Bottom line: OpenAI and Anthropic haven't seen anything yet.
As IT and AI have evolved over the years a lot of basic common sense left the room or never entered. One of the skills missing is the human interactions necessary to challenge ourselves as well as develop creative ideas that only come from digging into our untouched selves. The attached article on LinkedIn might help:
https://www.linkedin.com/pulse/beyond-winwin-conversation-tools-mark-h-fowler-nnpjc/?trackingId=3gzKArM6RRGCAu0UoeSy3Q%3D%3D