I Changed My Mind on Artificial Intelligence...

Today’s Letter Is Brought To You By Figure ! Figure’s building the future of capital markets through blockchain with $20B unlocked in equity. Use Democratized Prime to earn ~8.5% APY, a one of a kind DeFi product where your crypto earns for you against RWA (real world assets). Figure also offers one of the lowest rates on their Crypto Backed Loans at 8% @ 50% LTV. Sign up now and earn $50 when you make your first deposit, earn ~8.5% yield, or take out a Crypto Backed Loan with their low rates today! 1 Claim Your $50 Bonus To investors, I have a confession to make: I was wrong about AI. Very wrong actually. It is no secret that I have been a bull on the technology for awhile and I think the impact on society is going to be positive. I believe AI will lead to economic abundance, while accelerating the United States even further into the future. I still believe that stuff. I actually believe it more today than ever before. But now I realize I got some of the details wrong. For example, I thought AI was going to destroy a significant number of jobs. I don’t believe that anymore. I have completely changed my mind on how AI will impact jobs in America. Previously, I believed AI would replace many entry level roles typically filled by young employees. The technology would then work its way up the organization and eventually reduce the total number of jobs in a company. Entry level job replacement was the wedge, followed by a “land-and-expand” adoption curve throughout the organization. The data is telling us something different is happening though, so when I get new information I am willing to change my mind. The number of software engineers being hired has been increasing. The number of open software engineer roles is growing . The number of new college grads who get hired has increased 5.6% over the last 12 months. The unemployment level for people aged 20-24 years old who have a college degree has fallen from nearly 9% to almost 5% as well. The Wall Street Journal recently wrote “AI created 640,000 jobs between 2023 and 2025 in the U.S., according to an analysis by LinkedIn of job posting data, including new white-collar positions such as Head of AI and AI engineer.” And I am starting to see companies throughout our portfolio aggressively hiring to keep up with the demand for their products and services. If AI can make employees more productive, which is widely accepted as fact, then companies are going to want as many productive units of labor as possible. This is a key reason why I am changing my mind. AI appears to be a magical technology that will make companies more productive and more profitable. The net result will be more corporations, more startups, and more jobs. All three are big, positive wins for the American economy. When I tweeted these thoughts recently , I was shocked at how many people agreed with my new perspective. Palantir cofounder Joe Lonsdale loves the positive impact on America, Marc Andreessen said “this is the way,” Box CEO Aaron Levie said “the better AI gets at performing tasks, the more companies can take on those tasks, which leads to hiring more people to do the surrounding work of those tasks,” and Zynga founder Mark Pincus said “I share this view that AI is and will be the biggest job generator the world has ever seen.” Now some of you may wonder how to reconcile this epiphany with the various headlines of companies laying off so many employees. The short answer is that companies are using AI as an excuse, but they aren’t actually letting people go because AI is taking their job. Steven Sinofsky put it perfectly when he responded to me saying “the layoffs are clearly still all about over-hiring and under-managing. The demand for labor is going to skyrocket as companies learn what AI does. Just as the demand for labor increased as computing diffused through product and service delivery.” This is why everyone is sinking so much money into the AI industry. Whoever wins the race to provide the hardware and software to every company on earth is going to be worth trillions of dollars. There may literally be no bigger addressable market than selling low-cost, high-value intelligence to millions of companies and billions of people. The model companies like OpenAI, Anthropic, and others get most of the coverage because there is unlimited demand for their products. Anthropic added $11 billion in annualized revenue in a single month. That is just absurd. OpenAI and Microsoft just renegotiated their deal so that it is non-exclusive now for OpenAI. That is a sign just how many enterprises are banging down the door for this technology. People are confused on how companies are adopting AI though. Take Base Power in Texas . Justin Lopas, one of their cofounders, recently tweeted the following : “In the span of ~3 months, the team at Base Power has built out operational tools that replace or avoid the purchase of an enormous amount of SaaS. Token costs might actually equal the cost of buying the SaaS, but cost isn’t the point. It’s the fact that the tools are perfectly tailored to our operations, infinitely customizeable going forward, and tied into our data. A sampling: Warehouse Management System (WMS) Manufacturing Execution System CRM for B2B sales Material Requirements Planning (MRP) Sales & Operations Planning tool Labor crew management, forecasting, and associated vehicles tool Policy objectives and stakeholders tracker Countless dashboards for each team The impact that AI has had on our business is incredible.” This is an important nuance from Justin. Companies are not only adopting AI because of the cost savings, which frankly is still not fully understood. They are looking for customized software that is tied into their workflows and systems. They want software that makes their employees more productive and their companies more profitable. So I knew that AI was going to be valuable. I knew we could accelerate the country and the economy. But I didn’t realize how fast the adoption curve would happen, nor did I fully appreciate that AI is going to be a job generator, rather than a job destroyer. When you get new information, you change your mind. That is what I have done over the last few weeks. Nothing wrong with that. I just want to seek out the truth and then apply it to my investing framework. Hope you all have a great day. I will talk to you next time. - Anthony J. Pompliano Founder & CEO, ProCap Financial (Nasdaq: BRR) 🚨 ProCap Insights: Agentic Research for Investors Who Want To Make Money Last week, ProCap Financial launched ProCap Insights , the first agentic research offering in finance. 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