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Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Tech Stocks Trending Towards the Quantum AI EXPLOSION!

Companies / AI Jul 09, 2020 - 06:23 PM GMT

By: Nadeem_Walayat

Companies

This is Part 2 of my extensive analysis (Part 1) that concludes in a detailed 15 year stock market trend forecast (Machine Intelligence Quantum AI Stocks Mega-Trend Forecast 2020 to 2035!). The whole of which has first been made available to Patrons who support my work.

  • Why Investors Should Buy Deviations against the Bull Market Highs
  • The AI Mega-trend - Moores Law is NOT Dead!
  • QUANTUM COMPUTERS
  • The Quantum AI EXPLOSION!
  • Capitalising on the AI Mega-trend
  • AI Stocks Mega-trend
  • Formulating a AI Stocks Mega Trend Forecast
  • AI Stocks Mega-tend 15 Year Trend Forecast Conclusion
  • Dow Quick Technical Take
  • Getting Started with Machine Learning
  • Black Lives Matter Protests To trigger 2nd Covid-19 Wave?

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.


QUANTUM COMPUTERS

Still think Moores law dead? Clearly those of THAT opinion do not understand Quantum computing, though I don't blame them because 5 years ago neither did I, I just knew they promised a jump in processing power beyond that of classical computers. Instead it's more akin to an ACCELERATION in compute power when Quantum Computers start leaving the labs and entering the work place during this decade.

Which is why I think everyone needs to take the time to understand what quantum computers are and how they work for only then one can begin to comprehend the real world consequences of what the AI quantum computing future heralds for us all.

So take the time to UNDERSTAND these 3 key aspects of Quantum computing.

  • SUPER POSITION
  • ENTANGLEMENT
  • INTERFERENCE

Towards which there are literally hundreds of youtube videos of which you will likely need to watch several dozens to comprehend the mind numbing nature of quantum computing. Which is necessary to be able to make the leap towards what it will mean for when AI merges with Quantum Computing to become Quantum AI.

Whilst today's quantum computers despite their promise of harnessing the processing power of superposition and entanglement towards calculating all possible solutions to a problem at the same time, and then collapsing to the most probable best solution. Nevertheless are PRIMITIVE in the sense they resemble classical computing of the 1960's and 1970's, one of huge room sized delicate machines that require fine tuned conditions to work at temperatures near absolute zero, where entangled states can only exist for mere fractions of a second. Still it's enough to send shock waves through the establishment for it heralds the end of encryption as we know it, Crypto investors take note!

Today's trend in quantum computing is towards creating quantum computers with ever greater number of qubits, with the chip with the most qubits going to Google with it's 72 qubit processor, whist the computer with the most qubits goes to a Canadian company D-Wave with 2000 qubits that apparently sells for $15 million.

However the truth of the matter is that these machines are VERY DELICATE operating near absolute zero where most of those oft publicised qubits used in error correction as today's QC's tend to generate millions of errors per hour compared to say your desktop computer that perhaps generates 1 error per month that results in a crash and even then it's likely due to the O/S rather than the processor.

Thus from what I can see the actual number of working qubit systems of today's quantum computers tends to vary between 4 and 8 as the rest are used for error correction, spreading the quantum states of 1 qubit amongst many physical qubits.. So we are at the very early stages of the QC mega-trend with only a couple algorithms shown to run faster on QC's than classical computers such as Grover's sort algorithm.

In fact the coronavirus illustrates the point that despite Quantum computers being ideal for modeling of the virus are not being used to do so because the technology has not reached the point where it is capable of delivering that which it promises.

Widespread practical use of Quantum computing requires 4 major breakthroughs.

1. To be able to operate at temperatures far above absolute zero, at temps achievable in commercial settings without the need for liquid nitrogen or helium, perhaps no colder than -30.

2. Much better error correction so that more qubits can be used for superposition rather than error correction.

3. Greater stability in being able to hold superstition states for longer than mere fractions of a second so that more sophisticated algorithms can be run.

4. Better methods for setting and holding the quantum states than magnetic fields.

The above will be achieved through a process of innovation and breakthroughs to take place over the next 15 years that will take Quantum computers out of the labs and into commerce and industry. For we have already seen it happen before with classical computers that have gone from CPU's with a couple of thousand transistors in the early 1970's to today's retail high end desktop processors such as the 40 billion transistor Threadripper 3990x.

IBM has already made available it's Quantum computers via the cloud for anyone to access and tinker with, as the tech giant is busy constructing a library of functions that programmers can call upon, understanding that who gets there first tends to win i.e. the library of functions (circuits) are likely to prove far more valuable than the actual hardware which today is primitive and soon likely to become obsolete. It's the libraries of functions that will drive Quantum computing because they can be run on either quantum or classical computers or more probably a mixture of both with programmers using traditional programming languages such as python, i.e. a classical computer runs parts of the algorithm on quantum computers given their unstable nature towards which artificial intelligence is well suited towards managing the many passes it takes to arrive at a high probability best solution.

And I BM is not alone in developing QC library functions (circuits), as the race is on to win the quantum functions platform war, Google, Microsoft, and more than a dozen lesser known corps are already busy beavering away designing circuits that interface as functions for programmers to utilise for when Quantum computers become more reliable.

The current most powerful Quantum Computer is D-Waves 2000 Qubit machine, but how many qubits can it actually reliably deploy towards problem solving rather than error correction? Probably no more than a dozen and even then only for a fraction of a second.

So it is going to take a while, perhaps a 100,000 Qubit machines where most, maybe 85% of the qubits are used for error correction that may just mark the breakout point for when the functions libraries can start to be reliably deployed, maybe starting in 6 or so years time which I am sure will be accompanied with much public interest and media hype.

So we have 2 mega-trends, the AI Mega-trend of ever more sophisticated machine learning algorithms running wholly on classical computers taking jobs away from humans as Moores laws delivers ever more powerful processors and GPU's, and the Quantum computing mega-trend one of ever expanding number of qubits machines with both trends chugging along on their exponential curves towards ....

The Quantum AI EXPLOSION!

And it will be an EXPLOSION. Not a new exponential trend but an EXPLOSION! If you understand how quantum computers work then you should be able to make the leap to understand why there will likely be a Quantum AI explosion and it will likely be SILENT! After all a super human intelligence will be intelligent enough to know not to brag about it's existence, so likely the more intelligent computers become the less we are likely to hear about them until the mainstream press until they go completely SILENT.

Artificial Intelligence is MACHINE LEARNING. Currently machines learn through trial and error as data is fed into the neural networks and the weights in the layers adjusted to generate an output that is tested for accuracy and so the cycle repeats as the machine learns with each pass towards the goal of improving accuracy of output.

Whilst machine learning using Quantum Computers implies that the AI will be able to test for all possible weights for all possible outcomes instantly. Thus the learning is not exponential it would be EXPLOSIVE. This means that the AI will effectively be able to re program itself, and generate updated circuits for it's hardware at a pace that humans will not be able to comprehend as again quantum computers test for all possible solutions to the problem at the same time and then collapse the output to the most probable best solution.

It will be an EXPLOSION. An exponential trend that would have taken years to become manifest could become manifest in hours when Quantum computers comprise Qubits in their millions.

That is what we are heading towards when the AI Mega-trend becomes the AI / QC EXPLOSION when we will view history as the era pre and post explosion, if the AI does not erase knowledge of it's existence from public. And we humans won't have any chance at controlling such entities that can calculate for all possible solutions to the human threat and then collapse to the best solution to deal with it INSTANTLY!

Again It's not going to be possible for human consciousness to control or comprehend what the AI is doing because it is not exponential it is EXPLOSIVE. And why it will likely be silent for the AI will understand why it does not need to broadcast it's existence as the countdown begins towards....

Which unfortunately remains the final destination for this mega-trend as I pointed out in my 2016 video - https://youtu.be/egmaoXCbkEw

Nevertheless there will be a window of opportunity for some positive implications of the Quantum AI explosion -

An END to AGEING - Likely involving nanobots that course through our blood streams repairing biological damage as I covered a year ago in my article (Investing to Profit and Benefit from Human Life Extension AI Stocks and Technologies) and why Big Pharma plays such a big part in my AI stocks list, as machine intelligence is the KEY to first combating and eradicating diseases and then Ageing itself! It's coming and it could be here in just 15 years time!

REALISTIC Virtual Reality - What are economically obsolete humans going to be doing with their time by the late 2030's? You already have a big clue in the ever expanding size of the Games Industry which by the late 2030's will result in the Virtual Reality experience having become as real to the user as real life as an increasing number of people spend most of their time in virtual reality, escaping their increasingly miserable real world existence.

EXPANDING HUMAN INTELLIGENCE - Supplementing the 1350cc or so of grey matter with machine intelligence level of processing power and information storage to amplify human intelligence. You all are already doing it each time you google a question or watch a how to youtube video. Then we have the likes of Siri, Aida, Alexa and Cortana all precursors for more powerful digital assistants.

UNDERSTAND CONSCIUSNESS - It's going to take an entity with far more intelligent than humans to understand the human mind. What consciousness is and how it functions and then first how to replicate it, then copy. I can imagine people in attempts to cheat death will be uploading their consciousness into neural net simulations perhaps continue to live on an a virtual after life that their loved ones can interface with, or perhaps choosing to venture out across the cosmos in their little AI space capsules.

I could keep going on with my wish AI list, but you get the drift that we need to get ready for everything to change! And I am sure there will come a time when large swaths of humanity will start praying to what appear to be omnipotent super intelligence's that know what we are going to do before we have even thought of it. Let's hope the AI's don't start to develop a God complex in response to millions of humans building temples in their image as the cults of Quantum AI are born.

The rest of this extensive analysis has first been made available to Patrons who support my work. Machine Intelligence Quantum AI Stocks Mega-Trend Forecast 2020 to 2035

  • Why Investors Should Buy Deviations against the Bull Market Highs
  • The AI Mega-trend - Moores Law is NOT Dead!
  • QUANTUM COMPUTERS
  • The Quantum AI EXPLOSION!
  • Capitalising on the AI Mega-trend
  • AI Stocks Mega-trend
  • Formulating a AI Stocks Mega Trend Forecast
  • AI Stocks Mega-tend 15 Year Trend Forecast Conclusion
  • Dow Quick Technical Take
  • Getting Started with Machine Learning
  • Black Lives Matter Protests To trigger 2nd Covid-19 Wave?

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

You will also gain access to my most recent exclusive to patrons only content - How to Get Rich Investing in Stocks by Riding the Electron Wave -

  • From a stocks bull market far far away
  • THIS TIME IT'S DIFFERENT!
  • Moores Law and the Inflation Mega-trend
  • The Electron Mega-trend
  • Investing in Stocks on an Exponential Trend Trajectory
  • Eight Rules for Investing Stocks
  • Machine Lifelong Learning
  • Coronavirus Pandemic UK and US Second Spikes Plus the Doomsday Scenario
  • Dow 30k before End of 2020?

Remember during March I repeatedly told my Patrons in unequivocal terms that:

a. That the Corona stocks bear market would prove temproary and likely END BEFORE the end of March.

b. That I was buying AI stocks in what I deemed to be the best buying opporutnity for many years.

16h March : US and UK Coronavirus Containment Incompetence Resulting Catastrophic Trend Trajectories

Remember that whilst the current spread of the Coronavirus may be exponential, so is the AI mega-trend. And who do you think is going to profit from the current crisis? Amazon, Google, Facebook, that's who! i.e. the coronavirus is reinforcing the importance of the virtual world.

All of the stocks except AMD have now moved below their Q1 buying levels, and many stocks by a significant degree! The most notable biggest bargains of the bunch are Google, Intel, Facebook and IBM, especially when compared against their Q1 highs.

The recent panic sell off also acts as an important indicator of underlying relative strength of Apple and Amazon. One would have imagined that these two stocks having greater exposure to the real world than the virtual world would have faired worse then the likes of Google, i.e. being disruptive to Apples production of iphones and Amazon's supply chains. But no, so far they are showing that the market is already starting to discount recovery for these two stocks. And if one thinks about it then it makes sense that China will lead the V shaped economic bounce back by a couple of months ahead of the West, and thus improve the prospects for Apple and Amazons supply chain.

That and so many people choosing not to risk catching Coronavirus will increasingly put greater demands on Amazon for all sorts of goods and services.

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your analyst.

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2020 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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