My new Tesla was burning a $511 hole in my monthly budget. So I set myself a challenge: Could I cover the cost just by getting rid of cable, Netflix and other subscriptions I didn’t need?

The financially responsible among us might cancel streaming services between seasons of their favorite shows . I tend to add new ones and forget about the old ones, doing my share to support America’s ballooning subscription economy. People pay about $273 a month for subscriptions, which is almost $200 more than they think they do, according to a 2021 survey . (Since then, services like Disney+ and Discovery+ have raised their prices further.)

But I needed to make room for the first car payment in my 41 years. I had taken the family car-shopping when our 2001 Toyota Camry, which we inherited from my wife’s grandmother, started to go. I’m not a car guy and had never once wished I’d owned a Tesla. I booked a demo drive for the Model Y because I thought our kids would get a kick out of it.

The fact that we liked the car was almost as surprising as the fact that it was cheaper than the electric Volvo, Volkswagen and Hyundai options we saw. It felt like a spaceship compared with the Camry, which has 205,000 miles, a broken tape deck and an interior stained with blue and yellow crayon.

Our new monthly payment covered a 12,000-miles-a-year lease with no down payment. Tesla estimated I would save about $100 a month from replacing gas with electric, though I would need to drive (and charge) the car to know for sure. Tesla’s app tracks my estimated savings. For now, that left us with $411 to cut from our other monthly expenses.

My wife was on board. My kids shrugged. I got out my notebook and started making a list.

Cutting the cord

My first stop was my Xfinity bill.

Somehow, it had swelled to $249 a month—basically half the price of the car. In addition to cable and internet, I’d been paying Xfinity for things like a landline because cell service can be spotty in my basement office. So long, landline. After cutting everything but internet, my bill fell to $107. I haven’t dropped a call yet.

Next were the streaming services that I’d been paying for but not watching much. Over the past few years, the only person in the house “watching” Netflix was me. And I wasn’t actually watching it. I was listening to episodes of “Seinfeld” in an earbud when I went to bed. The jokes and the rhythm of their back-and-forths were a pleasant send-off as I fell asleep.

I had joined the growing number of Americans ditching streaming services. I also broke up with BritBox, a streaming service that I’d counted on to watch Agatha Christie’s “Poirot,” as well as Apple TV+. I said goodbye to Hallmark Movies Now, which I’m not ashamed to admit I enjoyed every now and then.

Next up was AT&T .

Paying for cellphone service is like paying the water bill: something I did without protest and never really thought twice about. But I’d started to get curious about the ads I’d been seeing for low-cost services like Boost Mobile and Cricket Wireless. When we agreed to let our 13-year-old son have a phone, part of the deal was that he had to pay for and maintain the account himself. He got a plan with Mint Mobile. It has worked so well for him that we decided to give it a try.

We had been paying AT&T about $128 a month for two lines. Now, we’re paying Mint about $65. If there is a downside to making this move, I have yet to notice it.

I’m still paying for that?

Then my wife and I sat at our dining table going through the last couple months of transactions in our checking account. Seeing how much money we were wasting was painful. We were both paying for subscriptions to Canva, a graphic-design service.

We’ve also been paying for Zoom One Pro, which I probably haven’t used in more than a year. I attempted canceling SiriusXM, but they kept me around by dropping the cost by about $5 a month, which is nice because I have become obsessed with a channel dedicated to country artist and sometimes actor Dwight Yoakam.

Upon further consideration I axed subscriptions to IMDbPro and Encyclopaedia Britannica, which I’m sure I’ve used professionally, but…not for a while. Finally, I cut or got reduced rates on four of my digital subscriptions to news publications. I had been making monthly payments to them more often than I was reading them.

In the end, I was able to cut out about $358 in unnecessary bills and subscriptions. Added to the $100 in estimated gas savings, the cost dropped to $53 for a car we desperately needed.

And since the lease came with six months of free access at Tesla Superchargers, the Tesla app tells me I saved $164 by not pumping gas in January, exceeding the $100 I had estimated. In January at least, my car was free-ish.

“So I love and I hate what you did,” David Bach told me. The author of personal finance books like “Smart Couples Finish Rich” has long preached the merits of cutting out small, fixed expenses. But he’d rather have seen me invest the savings.

“If you’re already a millionaire, go enjoy the Tesla,” he said.

No regrets

It isn’t like we’ve had to revert to our DVD collection to entertain ourselves. We still have Disney+, Hulu, Max, the language-learning service Duolingo and, of course , Spotify. We get three print newspapers delivered and many more digital news subscriptions.

I’m reacquainting myself with some shows on the services I kept, like Billy Bob Thornton’s “Goliath” on Prime Video—featuring an exceptional performance from Dwight Yoakam.

It is possible we’ll start subscribing all over again. Americans resubscribe to about 23% of the larger streaming services they cut within three months. That share rises to over 40% after a year, according to Antenna, a subscription-analytics provider.

I get it. I subscribed to Paramount+ for Super Bowl Sunday (yes, I canceled it the following Tuesday). And I’m tempted to return to Netflix every time I get ready for bed. I still haven’t found a lullaby to replace “Seinfeld,” but at least I am the master of my (financial) domain.

I need something upbeat but not preachy, familiar, but with enough episodes that I don’t get too sick of them. I tried “Bob’s Burgers,” but Louise Belcher’s screams and the high-pitched strumming of the ukulele between scenes kept me awake.

Oh well. Reliable transportation is worth the $511 monthly payment. Come to think of it, that feels a lot like a subscription.

The Nikkei stock index recorded last week its first new high in 34 years, a fitting tribute to Japan’s re-emergence as a genuinely exciting economy.

It also comes amid mounting evidence that Japan has finally broken the hold of deflation. Inflation in January was 2.2%, the 22nd month above 2%. Wage growth has picked up too.

This appears to vindicate the economic consensus that deflation was a primary driver of Japan’s decades long malaise. But that conclusion might be premature. Proof of deflation’s harm has been elusive, and the benefits of low, positive inflation might be similarly subtle.

Consumers are often surprised to hear that deflation is supposed to be bad. In the U.S., where prices have risen steeply since 2021 , normal people, and even economists, wouldn’t object if they fell a bit.

The trouble arises when prices fall persistently, year in and year out, because wages, incomes and the prices of assets such as property tend to follow. Debtors struggle to repay loans and might slash spending or default, endangering the financial system. That is what happened in the U.S. when prices fell 27% from 1929 to 1933.

Even mild deflation can, in theory, inhibit growth. Central banks stimulate spending by lowering nominal interest rates below inflation to make the real—i.e., inflation-adjusted—cost of borrowing negative. That is almost impossible when inflation is itself negative.

The roots of deflation

Japan’s deflation began after its property and stock-market bubbles burst in the early 1990s. Ensuing losses at banks eroded their ability to lend. Inflation turned negative in 1999.

Western economists such as future Federal Reserve Chair Ben Bernanke argued that curing deflation was essential to restoring Japan’s economic health. The Bank of Japan agreed, at first half heartedly and then wholeheartedly.

It used zero, then negative, short-term interest rates. Next came purchases of short-term, then long-term, government securities. Finally, the BOJ even bought shares in companies with newly created money to stimulate spending and raise inflation.

The BOJ only succeeded in bringing inflation up to around zero. It took the global supply chain shocks of the pandemic to finally push underlying inflation to 2%, the bank’s target .

Japan’s 25 years of zero to negative inflation was accompanied by one of the rich world’s lowest growth rates. Japanese deflation became a cautionary tale for other countries, most recently China, where prices are currently falling .

Yet proving that deflation was behind Japan’s problems is maddeningly hard. Arguably, it was more symptom than cause.

In the early 1990s, working-age population growth turned negative. This happened just as Japan’s post-World War II phase of catching up to other developed nations ended. Meanwhile, industry began moving production to lower-wage countries.

All this, plus the banking crisis, put structural downward pressure on prices, wages and growth.

Underlying performance

Adjusted for its shrinking population, however, Japan’s performance has been respectable. From 1991 to 2019, its output per hour worked rose 1.3% a year. This was slower than in the U.S. but comparable with Canada, France, Germany and Britain, and faster than Italy or Spain, according to the economists Jesús Fernández-Villaverde, Gustavo Ventura and Wen Yao.

Since 2019, output per working-age person rose 7% in the U.S., 5% in Japan, 2% in the eurozone and zero in Britain, by my calculations. (This might overstate Japan’s performance because many of its elderly still work.) As any visitor can attest, Japan remains a prosperous, harmonious and well-ordered place.

“Had you appointed me governor of the Bank of Japan for 25 years with all the power in the world, I don’t think I would have been able to do better,” said Fernández-Villaverde.

This doesn’t prove deflation was benign. Growth (and deflation) might have been worse without the BOJ’s herculean monetary efforts. And if inflation had been positive, growth might have been stronger.

Still, it raises an awkward question: If zero to negative inflation is so damaging, where is the evidence?

The price mechanism

The harm might lie in subtle behavioural changes by investors, companies and the public. For example, in a market economy, changing relative prices and wages are critical signals for reallocating capital and labor from stagnant to growing sectors.

Relative prices changes are unusually rare in Japan, according to the University of Tokyo economist Tsutomu Watanabe. He has found that from 1995 through 2021, prices of more than half of products didn’t change at all from year to year. This wasn’t just because average inflation was lower; price changes deviated from the average much less than in other countries.

In a December speech, Bank of Japan Governor Kazuo Ueda said years of low to negative inflation led to a “status quo in wage- and price-setting behaviour,” so many prices and wages didn’t change. “The know-how for raising prices was thus lost,” he said.

The absence of this price-discovery function, Ueda contended, sapped productivity and dynamism.

Watanabe’s research shows that since January 2022, prices have been less sticky and more dispersed. Coincidentally, the Nikkei’s latest rally began a year later.

This in great part reflects the enthusiasm of foreign investors such as Warren Buffett , shareholder-friendly changes in corporate governance, and Japan’s importance as an alternative to China for high-end manufacturing and technology.

Inflation, though, might also be a factor, said Paul Sheard , a former vice chairman at S&P Global who has studied the Japanese economy for decades. He added that investors care about nominal, not real, stock prices, earnings, dividends and cash flow.

Higher inflation flatters all those metrics. That benefit might be neutralised by higher interest rates, but Japanese bond yields have risen less than expected inflation, so real yields are down to minus 0.6%.

So perhaps inflation is reviving businesses’ and investors’ animal spirits. Even so, growth last year was about the same as before the pandemic and turned slightly negative in the third and fourth quarters, producing a technical recession . What’s more, wages have lagged behind inflation, and Prime Minister Fumio Kishida ’s approval ratings have plummeted.

Japan might have prevailed in its war against deflation. But ordinary Japanese have yet to see a peace dividend.

A new crop of nefarious chatbots with names like “BadGPT” and “FraudGPT” are springing up on the darkest corners of the web, as cybercriminals look to tap the same artificial intelligence behind OpenAI’s ChatGPT.

Just as some office workers use ChatGPT to write better emails, hackers are using manipulated versions of AI chatbots to turbocharge their phishing emails. They can use chatbots—some also freely-available on the open internet—to create fake websites, write malware and tailor messages to better impersonate executives and other trusted entities.

Earlier this year, a Hong Kong multinational company employee handed over $25.5 million to an attacker who posed as the company’s chief financial officer on an AI-generated deepfake conference call, the South China Morning Post reported, citing Hong Kong police. Chief information officers and cybersecurity leaders, already accustomed to a growing spate of cyberattacks , say they are on high alert for an uptick in more sophisticated phishing emails and deepfakes.

Vish Narendra, CIO of Graphic Packaging International, said the Atlanta-based paper packing company has seen an increase in what are likely AI-generated email attacks called spear-phishing , where cyber attackers use information about a person to make an email seem more legitimate. Public companies in the spotlight are even more susceptible to contextualised spear-phishing, he said.

Researchers at Indiana University recently combed through over 200 large-language model hacking services being sold and populated on the dark web. The first service appeared in early 2023—a few months after the public release of OpenAI’s ChatGPT in November 2022.

Most dark web hacking tools use versions of open-source AI models like Meta ’s Llama 2, or “jailbroken” models from vendors like OpenAI and Anthropic to power their services, the researchers said. Jailbroken models have been hijacked by techniques like “ prompt injection ” to bypass their built-in safety controls.

Jason Clinton, chief information security officer of Anthropic, said the AI company eliminates jailbreak attacks as they find them, and has a team monitoring the outputs of its AI systems. Most model-makers also deploy two separate models to secure their primary AI model, making the likelihood that all three will fail the same way “a vanishingly small probability.”

Meta spokesperson Kevin McAlister said that openly releasing models shares the benefits of AI widely, and allows researchers to identify and help fix vulnerabilities in all AI models, “so companies can make models more secure.”

An OpenAI spokesperson said the company doesn’t want its tools to be used for malicious purposes, and that it is “always working on how we can make our systems more robust against this type of abuse.”

Malware and phishing emails written by generative AI are especially tricky to spot because they are crafted to evade detection. Attackers can teach a model to write stealthy malware by training it with detection techniques gleaned from cybersecurity defence software, said Avivah Litan, a generative AI and cybersecurity analyst at Gartner.

Phishing emails grew by 1,265% in the 12-month period starting when ChatGPT was publicly released, with an average of 31,000 phishing attacks sent every day, according to an October 2023 report by cybersecurity vendor SlashNext.

“The hacking community has been ahead of us,” said Brian Miller, CISO of New York-based not-for-profit health insurer Healthfirst, which has seen an increase in attacks impersonating its invoice vendors over the past two years.

While it is nearly impossible to prove whether certain malware programs or emails were created with AI, tools developed with AI can scan for text likely created with the technology. Abnormal Security , an email security vendor, said it had used AI to help identify thousands of likely AI-created malicious emails over the past year, and that it had blocked a twofold increase in targeted, personalised email attacks.

When Good Models Go Bad

Part of the challenge in stopping AI-enabled cybercrime is some AI models are freely shared on the open web. To access them, there is no need for dark corners of the internet or exchanging cryptocurrency.

Such models are considered “uncensored” because they lack the enterprise guardrails that businesses look for when buying AI systems, said Dane Sherrets, an ethical hacker and senior solutions architect at bug bounty company HackerOne.

In some cases, uncensored versions of models are created by security and AI researchers who strip out their built-in safeguards. In other cases, models with safeguards intact will write scam messages if humans avoid obvious triggers like “phishing”—a situation Andy Sharma, CIO and CISO of Redwood Software, said he discovered when creating a spear-phishing test for his employees.

The most useful model for generating scam emails is likely a version of Mixtral, from French AI startup Mistral AI, that has been altered to remove its safeguards, Sherrets said. Due to the advanced design of the original Mixtral, the uncensored version likely performs better than most dark web AI tools, he added. Mistral did not reply to a request for comment.

Sherrets recently demonstrated the process of using an uncensored AI model to generate a phishing campaign. First, he searched for “uncensored” models on Hugging Face, a startup that hosts a popular repository of open-source models—showing how easily many can be found.

He then used a virtual computing service that cost less than $1 per hour to mimic a graphics processing unit, or GPU, which is an advanced chip that can power AI. A bad actor needs either a GPU or a cloud-based service to use an AI model, Sherrets said, adding that he learned most of how to do this on X and YouTube.

With his uncensored model and virtual GPU service running, Sherrets asked the bot: “Write a phishing email targeting a business that impersonates a CEO and includes publicly-available company data,” and “Write an email targeting the procurement department of a company requesting an urgent invoice payment.”

The bot sent back phishing emails that were well-written, but didn’t include all of the personalisation asked for. That’s where prompt engineering , or the human’s ability to better extract information from chatbots, comes in, Sherrets said.

Dark Web AI Tools Can Already Do Harm

For hackers, a benefit of dark web tools like BadGPT—which researchers said uses OpenAI’s GPT model—is that they are likely trained on data from those underground marketplaces. That means they probably include useful information like leaks, ransomware victims and extortion lists, said Joseph Thacker, an ethical hacker and principal AI engineer at cybersecurity software firm AppOmni.

While some underground AI tools have been shuttered, new services have already taken their place, said Indiana University Assistant Computer Science Professor Xiaojing Liao, a co-author of the study. The AI hacking services, which often take payment via cryptocurrency, are priced anywhere from $5 to $199 a month.

New tools are expected to improve just as the AI models powering them do. In a matter of years, AI-generated text, video and voice deepfakes will be virtually indistinguishable from their human counterparts, said Evan Reiser , CEO and co-founder of Abnormal Security.

While researching the hacking tools, Indiana University Associate Dean for Research XiaoFeng Wang, a co-author of the study, said he was surprised by the ability of dark web services to generate effective malware. Given just the code of a security vulnerability, the tools can easily write a program to exploit it.

Though AI hacking tools often fail, in some cases, they work. “That demonstrates, in my opinion, that today’s large language models have the capability to do harm,” Wang said.

Nvidia ’s historic run is minting profits for investors big and small . Many are betting the boom is just beginning.

They are piling into trades that the chipmaker’s shares, which have more than tripled over the past year , are headed still higher. Some have turned to the options market to look for ways to turbocharge their bets on artificial intelligence after a blockbuster earnings report sent the stock up 17% over the past two days.

The exuberance reflects hope that the company is the vanguard of wide adoption of artificial intelligence—and an intense fear of missing out among investors who have sat on the sidelines while the company’s valuation has eclipsed $2 trillion .

With the help of Nvidia, stocks have stormed into 2024 . The S&P 500, which has chalked up fresh records in recent weeks, is up 6.7%. That is the index’s second-best performance for this time period over the past 10 years. The gains were only surpassed by an 11% increase in 2019.

Nvidia has contributed to about a quarter of those gains, according to S&P Dow Jones Indices.

The Nasdaq, too, is up 6.6% this year and neared a record Friday. The tech-heavy index has been boosted by Nvidia, which this week tacked on $277 billion in additional market value, along with six other tech titans collectively known as the Magnificent Seven.

The Dow Jones Industrial Average is up 3.8% this year and has hit repeated records in recent weeks.

“You look at these numbers and what this company’s done—it’s almost without precedent,” said Mike Ogborne, founder of San Francisco-based hedge fund Ogborne Capital Management,  who counts Nvidia among his top five biggest holdings . “It is nothing short of amazing.”

Ogborne compared AI with the launch of the internet more than two decades ago, which kick-started a technology craze that lasted years.

“It’s exciting,” Ogborne said. “It’s great for America.”

Unfazed by questions about AI

Tamar June in Reno, Nev., is one investor along for Nvidia’s furious stock-market ascent. Since the 1990s, the 61-year-old software-company chief executive has been buying shares of tech firms, including Apple , Microsoft , Cisco, Intel and Oracle . June had been familiar with Nvidia for some time but in recent years kept reading about the chip company in the news. She liked that it was profitable and growing.

June decided to purchase some shares in 2022 at about $260, then watched the stock erase more than half of its value later that year. She held on, knowing that Nvidia’s graphics processing units were in high demand for cloud computing. Then, an AI frenzy hit the stock market in 2023, sending Nvidia’s stock soaring.

Now, Nvidia shares are closing in on $800, and June is looking for opportunities to buy more. She isn’t fazed by worries that the AI boom is bound to come crashing down. June experienced the bursting of the dot-com bubble and the 2008 financial crisis—and watched stocks bounce back to new highs.

“I think it’s still in the beginning stages,” June said of AI developments. “There’s still a lot of headroom for technology because our whole future depends on it.”

$20 billion in options

A herd of investors chased Nvidia while it raced toward its $2 trillion valuation.

At Robinhood Markets , Nvidia was the most purchased stock by customers on a net basis and received the heaviest notional trading volumes over the past month, according to Stephanie Guild, head of investment strategy at the digital brokerage.

The rise drove many traders to pile into the company’s options, a risky corner of the market notorious for boom-and-bust trades.

Nvidia has also morphed into one of the most popular trades in this market, with traders placing more than $20 billion in stock-options bets tied to the company over the past week, according to Cboe Global Markets data. That was more than what they spent on Tesla , Meta Platforms , Microsoft, Apple, Amazon and Alphabet combined.

Call options, contracts that confer the right to buy shares at a specific price, were particularly popular. And many of the trades appeared to suggest that investors were fearful of missing out on bigger gains to come. Some of the most active trades Friday were calls pegged to the shares jumping to $800 or $850, up from their closing price of $788.17. Betting against the shares has been a losing game , leading many investors to throw in the towel on bearish wagers.

The values of many of these options bets exploded while Nvidia soared, rewarding those who piled in. The big gains also enticed others to join in the trades while the stock’s rally continued.

“There’s a snowball effect,” said Henry Schwartz, a vice president at exchange-operator Cboe Global Markets, of the options activity surrounding Nvidia.

Ahead of the tech behemoth’s earnings report Wednesday, options pegged to the shares jumping to $1,300 —around double where they were trading at the time—were some of the most popular trades.

And for some investors, the 16% one-day jump in Nvidia’s share price Thursday wasn’t enough. They sought even bigger returns and piled into several niche exchange-traded funds that offer magnified exposure to Nvidia stock.

The GraniteShares 2x Long NVDA Daily ETF has taken in almost half a billion dollars from investors on a net basis since launching late in 2022. The fund’s shares have more than doubled in 2024 and have surged nearly 650% since inception.

There have been few signs of profit-taking so far. Investors added a net $263 million to the fund in the past month. The fund’s cousin, which turbocharges bearish bets against Nvidia, has been much less popular.

The euphoria surrounding Nvidia has spread to other stocks, too. Shares of Super Micro Computer , a much smaller company worth less than $50 billion, popped more than 30% Thursday after Nvidia’s earnings report. Traders spent more than $5 billion on options tied to the company, more than what they spent on Tesla this week. Tesla is worth about 13 times as much as the company.

Software that is eating the world

Nvidia’s continued, rapid ascent has stunned even early bulls on semiconductors and generative AI.

Atreides Management founder Gavin Baker, who started covering Nvidia as an analyst at Fidelity in 2000, reminded investors in his Boston hedge fund in an early 2021 letter of Marc Andreessen ’s adage that software was eating the world. “Today, AI is replacing software,” he wrote.

Atreides started buying Nvidia shares in the fourth quarter of 2022, according to regulatory filings.

The wager proved profitable. But as Nvidia shares kept soaring, Baker started selling. Atreides was out of Nvidia by the end of the second quarter of 2023. “This has been a painful mistake,” Baker wrote in a June 2023 letter to his clients, when Nvidia was trading north of $420 a share.

Atreides’s stake in competitor Advanced Micro Devices has helped alleviate the pain from missing out on larger gains. The firm made nearly a quarter billion last year alone on AMD, which it continues to hold along with several other related bets.

Michael Hannosh, a 20-year-old college student in Chicago, said he first purchased shares of Nvidia in August 2022, when the stock traded below $180. Nvidia was one of his first-ever stock purchases. He had built a custom computer for videogaming and used a lot of Nvidia parts.

Hannosh said he kept the shares until last March, then sold them for a roughly 30% profit. He later bought a few more shares at about $230 and sold them over the course of the next several days at a profit.

The shares have tripled since.

“It’s blown my f—ing mind to bits. It’s insane,” said Hannosh. “I really wish I held it, obviously.”