Talking about the basic building blocks and effective AI Tools that could make your life easier
From the moment early humans struck flint to spark fire, our species has been on an unrelenting journey of learning to speak with our tools. We began with gestures and grunts, moved onto chiselling symbols into stone, and later shaped entire worlds with the printed word. Every leap in communication, including writing, the printing press, the telephone, and the internet, was a step closer to collapsing the distance between thought and action.
Fast forward to today, we’ve arrived at a new threshold: we’re no longer just commanding our tools, we’re conversing with them. Enter artificial intelligence (AI), a tool that doesn’t just respond to inputs but understands language well enough to write poetry, summarise scientific research, help code software, or answer questions like a thoughtful companion. But how does it work?, What powers it?, How much does it cost? What kind of infrastructure does it require? Which companies own it? Are a few questions we aim to answer in this week’s edition of “Learning of the Week”
Since we have also been trying our best to leverage AI in equity research and communicating insights via various means (reports, videos, newsletters, etc), we will be sharing a valuable mental model for writing prompts and a few valuable AI tools that have proven to be very helpful in our own journey. The aim of this newsletter is to provide a simplified understanding of AI and give some actionable tools that may help you make your life slightly easier, as it is helping us.
Basics before Buzzwords: Types of AI
Let’s begin with a bird’s-eye view. Based on the type of output it produces, AI can be grouped into the following FOUR categories. Think of it like different “personalities” of AI, each with its special skillset:
Generative AI: The Coolest Tool in the Digital Toolbox
Imagine a creative assistant who has access to every book, article, and manual in the world. Now imagine it creating new things based on all that access, like writing a blog, drawing an image, or helping you code an app. That’s Generative AI in a nutshell.
Interestingly, it’s not just for techies. If you can speak, write, and read English, you already have the superpower to use it. You don’t need to know how to code or design complex systems; your words are enough. Whether you’re crafting a story, launching a business, learning a skill, or solving a problem, Generative AI is like a creative assistant that never sleeps, never gets tired, and is always ready to brainstorm, draft, design, or explain, on your terms, at your pace.
What Powers Generative AI? – Meet LLMs
Behind the scenes of Generative AI is something called a Large Language Model (LLM). Think of it as a mega-library that houses nearly everything humans have written. Generative AI tools (Your Creative Assistant) “Read” from this library and use it to craft intelligent responses. It can mimic professionals like poets, teachers, comedians, etc., and instantly respond to every question you ask.
But these LLMs don’t run on magic. The following digital & physical infrastructure is required to ensure their smooth functioning:
– Software & Algorithmic Smartness: That train LLMs on billions of words & data
– Hardward Muscle: High-performance GPUs and TPUs to crunch massive data
– Physical Infrastructure: Buildings & other support systems to house GPUs and TPUs
– Financial Firepower: Money to access the above
To get a range of the cost, let’s take an example of OpenAI’s GPT-4 which reportedly cost $78 Mn to train, while DeepSeek’s V3 model cost $5.6 Mn.
But, how can AI create such impactful answers?
Well, this is a fundamental question that must have crossed your mind. To understand how these systems deliver jaw-dropping results, here’s a simplified step-by-step breakdown:
In short, LLMs generate one word at a time, stitched together at lightning speed, based on what they’ve “learned” and the context you provide.
The Big League: Popular LLMs and Who Owns Them
Creating LLMs is still the domain of a few tech giants with the resources to do so. Here are the frontrunners:
Using Generative AI to make lives easier
Now that we’ve covered the foundations, it’s time to get hands-on. In this section, we’ve shared: A simple mental model for writing effective prompts, Five ready-to-use prompts that we rely on daily at Bastion Research and A few AI tools that have made our research, reporting, and communication significantly easier (and faster!). Here we go…
AI can produce great results, but only if the input is right. In other words, a good prompt leads to a sound output. It’s a lot like the human body: what we eat and how we treat it directly affects our health. Similarly, the quality of a prompt shapes the quality of the AI’s response. Therefore, writing a good prompt comes down to clarity, context, and specificity. Below is an effective mental model shared by Tar (Twitter: @itsTarH) on “TheWrap”, to keep in mind for writing quality prompts.
(Source: TheWrap)
Here’s an example of how one can use the above mental model to make an impactful prompt that one can use in his/her equity research activity.
AI Tools that we use at Bastion Research
At Bastion Research, we focus on quality research and create content across multiple media platforms. Our work involves extensive research, analysis, and writing across a wide range of topics.
To streamline this process, we started experimenting with AI tools last year. What began as a small trial quickly turned into company-wide adoption. From researching companies, industries, and promoter backgrounds to improving our newsletter writing, AI has become part of nearly every stage of our workflow. Over time, we tested numerous tools for research, writing, image generation, and more. The most effective ones, those that genuinely improved our processes, are now integrated into our daily operations.
Today, we’re sharing some of the AI tools that have become part of our everyday work.
Closing Remarks
As with every transformative shift in history, be it the printing press or the internet, those who learn early and adapt fast tend to benefit the most. At Bastion Research, we’re on this journey with you: experimenting, failing, learning, and sharing what works.
If this edition sparked even a bit of curiosity, you’re already ahead of most. Also, if you found this newsletter insightful, please share it with others using this Link. Also, feel free to share your thoughts on X, where you can find us as @bastionresearch.
Happy Investing!!!
Disclaimer: These insights are based on our observations and interpretations, which might not be complete or accurate. Bastion Research and its associates do not have any stake in companies mentioned. This newsletter is for educational purposes only and is not intended to provide any kind of investment advice. Please conduct your own research and consult your financial advisor before making any investment decisions based on the information shared in this newsletter.
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