The Intelligent AI Short: MasterCard.
Or how the payment giant’s dumb rush to machine intelligence sets the company up for a major fall -- and a major payday for short investors.
We heard a good one from a smart young computer-engineer friend of ours, the other day. “If I ever randomly mess with the inputs to one my programs, I'd get fired that day. But if I do it fast enough, I get paid four times as much. And I can call my program Artificial Intelligence."
For those close to the preposterous land-rush to automate every conceivable business problem via AI. this joke is only half funny. Whether it be healthcare, automotive, or human resources, businesses everywhere seem to pouring out into the vast machine-learning prairie. The ooze is so wide, we wonder, which machine-learning application is that outlandish enough that AI fanatics admit that one problem is beyond mechanized intelligence.
Might it be pottery, interpretative dance? Maybe ducting is the silently acknowledged boundary for what machines can’t learn. We want to know.
AI -- The Email Of Emerging Technologies.
The sprawling foolishness of artificial intelligence has drawn the skeptics eye from serious investors. We’re not telling you anything that, right along with other dubious Big-Tech stories like virtual reality and drones, AI tells a dumb investor story, indeed. There are few “pure-play” AI stocks to value. And the machine-learning narratives left are all about which entranced tech oligopolies will adopt AI more or less efficiently. So while, we suppose somebody, somewhere, could spend the time counting out how many dollars of Alphabet, Facebook, Microsoft or Nvidia, earnings will come from artificial intelligence, don't we all have better things to do?
Where's the pay off?
So, in many ways, machine learning is becoming the transformative, utterly irreplaceable technology that will essentially be a commodity before it ever hits the mainstream. like eReaders or action cameras or email. And getting paid from AI will probably be as much about what won’t work, as much as what does work.
And in terms of AI disasters waiting to happen, there’s no better pay off looming than betting against payment-giant MasterCard.
The Intelligent AI Short: MasterCard
Realizing how lucrative shorting MasterCard will be is all about understanding what artificial intelligence will be. Because “Artificial Intelligence” is not intelligence. It is not machines that "learn." It is not neural networks or any of that software anthropomorphism.
"Artificial intelligence" is simply slang for software that, get ready for this ... writes other software.
The hard part, the “intelligent” part -- the magical part -- of AI is boiling down the 10 or even 100 million machine-made trial iterations of that software-written software down to the 5 or 6 specific working code packages that solve a real problem. Remember our coder joke, about swapping random program elements around from the beginning of this story? That’s the magic -- and the nightmare -- of AI. She really is merely swapping variables around, at near the speed of light, to whittle her vast universe of code-created code down into concise engineered computers instructions elements that do something.
Or said in a way to frighten you: AI is caveman, brute force trial and error, done at stupendously stupid Web scale.
And once viewed this way -- as the dumb process of whittling software away the ideas that don’t work to find the coding stuff that does -- it gets darn simple to sniff out the machine learning duds stuck out there in the mud. French advertising giant Publicis established the bar for AI dumbness earlier this summer by announcing a product called “Marcel”. Seriously. Like the mime.
Here‘s the the company press release describing Marcel as a “…AI-powered innovation that will accelerate transforming the organization from a holding company to a platform, creating the first truly borderless, frictionless enterprise workforce, comprised of 80,000 employees worldwide, and usher in a new era of creativity and innovation.”
Oh heavens. And to think advertising once was fun.
But Publicis bumbling around trying to figure what an Ad agency is in a world of Google and Facebook, doesn’t make the clear AI loser. For that, you need to mix in some overblown arrogance, belligerent cluelessness and simple bad judgement. You need to be an executive at MasterCard, who has just made the business blunder of the century
Payments Is a Great Fit For AI -- If You’re a Criminal.
What makes MasterCard a “Must Bet Against” stock is not that isn’t embracing artificial intelligence with skill. It is that it is confusing AI skill with solving a legitimate business problem. About a year ago, the Purchase, New York-based payment enterprise purchased an AI outfit called Brighterion. Brighterion was a slick, well-run financial tech cyber-security firm that embraced machine learning to make gaudy claims for automating the fighting of fraud, cyber crime and money laundering. Initially, we really liked the Brighterion deal. It was exactly the kind of stout, defense-first strategy that a payment giant like MasterCard had to adopt. And to us, that deal made the company feel like a sensible leader in the other strictly Ozland FinTech market, where customer security is somehow seen as "for sissies only."
But earlier this summer, MasterCard turned the early positive of the Brighterion deal into a major, top level, business negative. It used these newly acquired machine-learing skills to step dangerously outside its core business. MasterCard announced something called AI Express, that will, according to the company, “help companies develop a tailored artificial intelligence model that answers real business questions and can be swiftly deployed.”
Reread that for a moment, and we think you'll see what we see: Mastercard will get into the business of reselling its AI tools to other companies.
Full stop: Holy %@#$! Blow the tanks! Dive Dive Dive! Think about what you just heard!
This payments giant, that’s sits at the absolute epicenter of countless cyber-crimes, is attempting to resell its machine-learning offerings to other companies, before those offerings are fully tested in the marketplace. And in the process, has made MasterCard into the singular target of every single black hat hacker, cyber-criminal and state-sponsored cyber bully that has its eye on the global payment network.
Because what better target do you need, than a large, disorganized incumbent, trying to learn a new skills, while handling trillions of dollars of other people's money. What can go wrong?
Just to point that we are not speculating here, the threat to payments firms from artificial intelligence in the hand of criminals was the absolute hot topic at this years Black Hat security conference in Las Vegas. IBM researchers demonstrated something called Deeplocker, which is an active machine-intelligent app that is learning to become seriously effective at sidestepping security procedures. And we wont go into the details of currently available software the apparantly procures live MasterCard credit cards, from the hidden depths of the dark web.
We wont link to those here. But you can go find them. Just be sure to search on a secure -- and disposable -- computer. The stuff is pretty gross.
Even more enticing for the short investor, is that MasterCard (MA) the ticker, is almost too easy to bet against.
Short interest is essentially nonexistent for this stock. A dirt cheap option spread or even an outright margin buy would short this stock nicely, all the kind of beginner day trader stuff that makes short investing possible. Also MasterCard captures the entire security-risk bet that all of the payments sector faces. Any company that gets taken down by the inevitable AI security mess will bring MasterCard right along with it.
This is short bet that actually hedges itself, if you think about it.
And even if you dont care to go short on MasterCard, there is no denying what just happened: A $220 billion, Fortune 100 firm, has gotten ensnared in the illusion that it could compete with a true tech giant like Google for the machine-learning dollar.
We are witnessing the largest corporate blunder in the past decade. We really are.
Even more enticing for the short investor, is that MasterCard (MA) the ticker, is almost too easy to bet against.
Short interest is essentially nonexistent for this stock. A dirt cheap option spread or even an outright margin buy would short this stock nicely, all the kind of beginner day trader stuff that makes short investing possible. Also MasterCard captures the entire security-risk bet that all of the payments sector faces. Any company that gets taken down by the inevitable AI security mess will bring MasterCard right along with it.
This is short bet that actually hedges itself, if you think about it.
And even if you dont care to go short on MasterCard, there is no denying what just happened: A $220 billion, Fortune 100 firm, has gotten ensnared in the illusion that it could compete with a true tech giant like Google for the machine-learning dollar.
We are witnessing the largest corporate blunder in the past decade. We really are.
http://www.publicisgroupe.com/en/news/press-releases/publicis-groupe-unveils-marcel
https://newsroom.mastercard.com/press-releases/mastercard-enhances-artificial-intelligence-capability-with-the-acquisition-of-brighterion-inc-2/
https://brighterion.com/
https://newsroom.mastercard.com/press-releases/new-mastercard-service-speeds-adoption-of-artificial-intelligence/
https://www.nasdaq.com/symbol/ma/short-interest
http://www.eweek.com/security/ibm-demonstrates-deeplocker-ai-malware-at-black-hat
d paragraph text here.
