The humanoid robots are coming | InvestorPlace

Hello Reader,

Tom Yeung here with today’s Smart money.

Over the past few weeks, you’ve heard me talk about BENEFITS by AI. The technology is creating a wave of innovation in biotech and healthcare…not to mention an absolute gold rush in data center stocks.

But like we’ve been talking about The Road to Artificial General Intelligence (AGI)I also noticed that automation has a darker side. That’s a big part of why Eric is hosting a free event on Thursday, August 22nd at 1pm Eastern. The road to the AGI Summit Isopen for anyone to participate. I’ll have more on that in a minute – but it’s essential that you register in time to reserve your place.

The big downside to automation is a troubling story we’ve seen before…

Consider what happened in the US auto market when robots were first introduced.

In 1959, inventor Joseph Engelberger created the prototype Unimate #001, a 2,700-pound robotic arm that featured six degrees of motion and was sensitive enough to hold cocktail glasses without breaking them. The car was installed at a General Motors die casting plant in Trenton, New Jersey for testing.

Coming soon to a factory near you.

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It was a success. Within two years, GM installed more than 450 of these weapons in its die-casting plants. By the late 1960s, the number of industrial robots had grown to nearly 4,000 across the country. Today, US automakers have about 150,000 robots installed among them.

This led to an incredible increase in labor productivity. Since the 1970s, the number of cars produced in the United States has roughly doubled to 18 million units annually, without a significant increase in employment in the industry.

So how did we reward these workers for doubling their output?

In inflation-adjusted terms, auto worker wages lagged behind. According to the 1970 US Census, the average full-time auto worker earned about $8,618 annually during that period, or $69,800 when adjusted for inflation. By comparison, the average auto worker now earns about $55,000 a year, according to ZipRecruiter and the U.S. Department of Labor, or about 20 percent less in purchasing power.

But what if we compare wages to the total production of American wealth?

This is where things get scary. That’s because during the same period, US GDP grew from $1.07 billion to about $27.4 billion, a 25.5-fold increase. Using this figure, auto workers they would theoretically need to earn $208,120 in 2024 dollars to earn the same share of US GDP they once enjoyed in 1970!

The reason, of course, is that the vast majority of American productivity is now captured by the “owners” of society. The top 1 percent of Americans now control more than 40 percent of U.S. wealth, up from 25 percent in 1978. And among the top—the 0.01 percent—after-tax incomes have four times in real terms.

In other words, robotics hasn’t made America more egalitarian…it’s done quite the opposite.

AI Makes Robots Smarter… What Could Go Wrong?

We believe AI will likely accelerate the robotics trend. Last week, OpenAI-backed robotics startup Figure AI released a two-minute video of its humanoid robots performing tasks at a BMW factory in Spartanburg, South Carolina. These machines are now able to learn from their mistakes and, unlike their robot-armed predecessors, are designed to move in spaces created for humans.

This allows them to take on directly competing roles.

One of BMW’s newest hires.

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We’re also seeing AI emerge in places beyond the factory floor. The Financial Times reports that about 45% of job seekers now use ChatGPT to write resumes and fill out forms.

Many recruiters are now faced with large volumes of AI-generated resumes from candidates who have used the tools to polish their personal statements and add search keywords. The actual numbers could be higher, some added, but these estimates are based on what is obviously detected.

Obviously, much of this AI-produced output is still pretty bad. The Figure 2.0 robot is currently capable of the simplest tasks on a factory floor, while much of the content written by artificial intelligence is visibly poor.

“Without proper editing, language will be awkward and generic, and hiring managers can detect this,” said Victoria McLean, chief executive of careers consultancy City CV, in the same Financial Times article.

Honestly, the Unimate #001 prototype wasn’t great when it was first released. However, it only took a short time for technology to catch up and improve.

What’s next for AI?

That’s because, this time, change is happening exponentially faster than in 20^th century. Computing capacity doubles roughly every 18 months, and the speed of AI improvements is dizzying. It’s easy to forget how weird and hallucinatory-prone ChatGPT was less than two years ago.

So even if someone does not use AI for their work, they will increasingly compete with those who do. Non-users will either be forced to sign up or opt out.

Unfortunately, we are already seeing a new global race to the bottom. Recruiters are faced with a flood of low-quality resumes from people who May or maybe not be qualified for the position. It becomes impossible to know. And we see auto companies quietly negotiating union contracts without any AI protections attached.

Meanwhile, the “haves” of this division are moving forward. The top five US tech companies have now seen their market valuations rise by $4.2 trillion over the past 12 months, enriching shareholders rich enough to own big stocks. The AI ​​figure itself is now worth $2.6 billion, making its founder Brett Adcock, 38, a billionaire. (An auto worker saving $10,000 a year would have to work 140,000 years to become as wealthy.)

That’s why I think it’s essential that you join Eric at his special free event, The Road to the AGI Summit, next Thursday, August 22nd at 1pm Eastern Time. During the event, he will talk about the accelerating pace of AGI… and how you you can protect yourself from falling behind. They also offer a FREE stock recommendation.

Register now for The road to the AGI Summit. You won’t want to miss it.

Sincerely,

Thomas Yeung, CFA

market analyst, InvestorPlace