Caught in a Landslide, No escape from Reality
Joined March 2011
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James Gubb retweeted
HELL AND BACK, BUT STILL STANDING!
Thursday 12 November, 5pm at SMG BMW Foreshore, Harbour Arch!
My NO RETREAT, NO SURRENDER keynote on overcoming adversity. I’ll also be signing my book!
DON’T MISS IT. IT COULD BE MY LAST TALK! ❤️
#NoRetreatNoSurrender
Too much plaque in one's arteries leads to heart attacks, the exact timing of which is never certain. Same with current unsustainable debt worldwide. The result is certain: goodbye both savings and debt, unless your assets have no third party exposure. Gold comes to mind, as does crypto. Non fiat based assets are the goto in this scenario. Thanks Ray.
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On every metric here, OpenAI and Anthropic are Gruesome, and to be "avoided at all costs". Hmmmmm
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James Gubb retweeted
Ok I just read through vitalik’s paper and if the vision he outlined is executed the implications are absolutely insane especially for the app layer.
The paper is basically Eth’s plan on how they will enable computation off chain with Eth verifying the result (ensuring computation occurred and what it did etc etc).
Now what this means is the definition of “onchain” itself changes, because instead of every part of an app having to execute inside a smart contract you can push a huge amount of complexity elsewhere and still inherit ethereum’s guarantees, this really does open up a huge amount of design space especially for DeFi.
For example with lending you could have really sophisticated systems analysing collateral, liquidity, borrower behaviour and market conditions offchain, with multiple solvers or execution systems competing to produce the best outcome, like the cheapest liquidation route, best refinancing rate, best collateral swap or best way to match borrowers and lenders all while the protocol only accepts outcomes that satisfy its rules.
So basically a lot more of the smart stuff behind a financial product can happen outside the smart contract, while Eth still acts as the final layer that checks the rules were followed and makes sure the money moves exactly as it should.
The MEV implications here are quite interesting too because more economic activity happening before settlement means more value moves upstream into who gets the information first, who computes the best outcome and what gets presented to Eth.
But the thing I’m most bullish on is what this does to the TAM of Eth just because this vision means ethereum doesn’t have to be fast enough to do everything itself it just has to be able to verify everything that matters.
And that’s an enormous difference.
It’s literally a world computer.
The cryptographic world computer:
vitalik.eth.limo/general/202…
My attempt to express in somewhat concise terms the true meaning of basically everything planned to happen to Ethereum starting from the fork after Hegota. It's really not just a blockchain anymore. It's a hybrid architecture that combines together blockchains and modern cryptography, to enable much more powerful properties.
FOCIL, EIP-8288, Lean consensus, state management, formal verification, advanced mempool improvements (including privacy), and the longer-term specter of obfuscation all mentioned.
James Gubb retweeted
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⚡ Ethereum confirms it: the Glamsterdam upgrade lands in Q4 2026.
This isn't just "another improvement." It's the biggest capacity leap since The Merge — and it's going to change what it costs to use Ethereum.
A thread 🧵
James Gubb retweeted
I have conducted an audit of Anthropic's finances.
What I have found is so shocking that I am calling for a Congressional investigation.
Anthropic is not just seeking regulatory capture.
It has built a regulatory capture machine that cannot be turned off.
Structural financial incentives make it impossible for Anthropic -- I call it the Anthropic Network -- to turn off its own AI doom cycle.
It starts with METR.
Dario Amodei proposes "third-party evaluators" to assess the risk of Anthropic's models.
He proposes METR for this purpose.
But METR is financially dependent on the Anthropic's success -- specifically, on the explosive growth of more than $7 billion dollars in Anthropic stock.
Dustin Moskovitz invested this stock into Good Ventures Foundation, where it represents the majority of that organization's portfolio.
And GVF is the overwhelming funder of the entire Anthropic Network ecosystem.
This stock was worth $500 million early last year.
It is worth more than $7.7 billion just ~16 months later.
METR -- and all of those building a career its parent organizations -- cannot afford to disrupt that growth.
Because if Anthropic goes under, many of the organizations that fund METR go under as well.
But if Anthropic succeeds, METR and its parent organizations become more richly financed to regulate AI -- something those at METR want very much.
The "third-party evaluator" is not "third-party" at all.
The evaluator is on Anthropic's payroll.
If this were the end of it, that's bad.
But that isn't all.
The same organizations that fund METR also fund the many organizations, such as the Tarbell Center, that promote AI Doom.
The Tarbell Center publishes AI Doom articles in The Verge, Science, LA Times, The Dispatch, TIME, and others.
They are selling the problem, and then selling the solution to the problem -- from the same money pile: Anthropic's.
All of these organizations are financially dependent on the same exploding $7 billion money pile.
As Anthropic grows more and more powerful, its AI Doom Machine grows better and better financed -- louder and louder.
Meanwhile, the regulatory regime seeded in METR grows larger to solve the increasingly loud -- now hysterical -- problem of AI Doom that the Anthropic Network itself created.
From this standpoint, as Anthropic becomes more powerful, AI might be getting scarier, sure -- but the positive feedback loop also becomes more deafening -- independent of objective facts.
This itself is an objective fact.
The deafening AI Doom is part of an business model, that, as it expands, so too does the AI Doom messaging -- there is simply more money to do it.
But the problem also goes in the other direction:
If Anthropic dies, the Regulatory Regime and the AI Doom Machine are crippled or die.
Neither METR nor Tarbell nor the other organizations in the Anthropic Network can allow that to happen.
Hence, neither METR or the AI Doom Machine can be trusted to provide independent assessments of Anthropic's models or AI more broadly.
They simply are not organizations independent of Anthropic.
And Anthropic cannot detach itself from METR or Tarbell or countless other safety orgs (not shown here), either, because they drive hype for the models and the possibility of eventual regulatory capture, and Anthropic will not give that up willingly.
What's more, the people at all of these organizations are all the same ecosystem, the same community. They just shuffle between organizations.
The Anthropic Network is therefore, so long as it is successful, locked into a self-amplifying feedback loop inside an ideological monoculture.
And that feedback loop is winning.
That's what Jacob Coxon is.
China is keeping messaging tight. That is why optimism for AI is so high in China.
America has Anthropic: a massive company pushing anti-AI propaganda at a state level.
Anthropic will either create hysteria until American AI slows down and China wins, or it will create fractures throughout American society with severe political consequences.
Ironically, because of the structural financial incentives underpinning the Anthropic Network, it has become the same kind of self-amplifying virus that it fantasizes AI to become in the future -- while hiding its tracks just as carefully.
It is the mirror of the same AI virus that it hypothesizes to consume America.
Anthropic's business model, models itself after the very thing it claims to fear.
Except Anthropic's ideology infects humans, not computers.
Congress must investigate.
Evidence and Github in next post.
Then some supplementary figures.
James Gubb retweeted
🚨 Un message à tous les Français 🚨
Dans les mois qui viennent, tu vas voir de plus en plus de propagande sur Elon Musk.
Envoie ça à tes proches. Pas demain. Maintenant.
Elon Musk est en train de détruire, à l’échelle mondiale, le plus vieux mensonge politique du siècle : l’idée que seuls l’État, les intermédiaires et les médias titulaires ont le droit de dire ce qui est vrai, ce qui est possible, et ce qui est moral.
Ce mensonge a un nom familier. On l’appelle socialisme quand il parle de justice. On l’appelle « consensus » quand il parle de science. On l’appelle « protection » quand il parle de parole. Dans tous les cas, le mécanisme est le même : une caste se place entre les gens et la réalité, puis vend cette place comme un service public.
Musk casse ça.
Il a prouvé qu’on pouvait envoyer des fusées sans Gosplan. Construire des voitures sans la bénédiction de Detroit. Relier un village, un front ou un hôpital depuis l’orbite, sans demander l’autorisation d’un ministère. Il a racheté la place publique et arraché le monopole de ceux qui décidaient qui avait le droit de parler.
Voilà pourquoi les médias mainstream, comme une bête à l’agonie, vont tout tenter.
Pas parce qu’ils ont découvert un secret. Parce que l’homme échappe à tous leurs leviers. On ne l’achète pas avec des recettes publicitaires. On ne le recadre pas avec un cycle de une. On ne le débranche pas discrètement. À ce niveau de puissance, c’est probablement l’homme le plus clean du monde : il a mis sa propre fortune en jeu, il n’a pas besoin de leur permission, et il n’a pas construit sa position en capturant l’État.
Ils diront nazi. Ils diront fou. Ils diront dangereux pour la démocratie. Ils ressortiront le même extrait, le même historien du bon camp, la même indécence morale.
Ce n’est pas de l’information. C’est un réflexe de survie.
Il faut que les Français le sachent avant que la vague n’arrive.
Elon Musk ne se bat pas pour un parti. Il se bat pour que le peuple puisse regarder la machine en face, construire sans demander pardon, et cesser de déléguer sa tête à ceux qui vivent de la peur et du récit.
La vérité est simple.
Un bâtisseur qui ouvre le jeu fait plus pour les gens qu’une rédaction qui recycle la calomnie.
Transmets ça. Les mois qui viennent vont être bruyants. Le signal, lui, ne changera pas.
James Gubb retweeted
Goldman Sachs just admitted that half of big tech’s record profits are made up
And the AI buildout everyone’s betting on is physically impossible to power. Roughly 100 new nuclear reactors would be necessary in the US.
US stocks are now the most expensive they’ve been since 1929.
Graph from Morgan Stanley
James Gubb retweeted
🦔Banks led by Morgan Stanley are planning to offload $15 billion of debt tied to a Google-backed data center in Hubbard, Texas, leased to Anthropic. The bond will carry a speculative-grade rating even with Google's backstop, because Google's guarantee only kicks in after the data center is fully built. Until then, bondholders take on construction delays and cost overruns. Banks that hold this paper want to sell it into the bond market to reduce their exposure. More than $50 billion of similar debt tied to Oracle data centers sits on bank balance sheets and needs buyers.
My Take
The originate-to-distribute model that Wall Street used with mortgage-backed securities in the mid-2000s is back for AI infrastructure. Banks write the debt, add credit enhancements, and sell it to pension funds and insurance companies that want the yield. The Anthropic bond carries a junk rating during construction and an investment-grade rating after Google's guarantee activates. Subprime mortgage bonds carried investment-grade ratings using similar rating logic while the underlying loans defaulted.
The AI capex commitments underneath this debt are enormous. Hyperscaler capex is approaching $3 trillion through 2029. AI lab valuations reach into multiple trillions between OpenAI, Anthropic, and xAI. Data center bonds and neocloud debt add hundreds of billions more. Insurance companies owned by private equity buy this paper and stuff it into insurer balance sheets. Pension funds have raised infrastructure allocations to hold the same debt. The Magnificent 7 makes up over a third of the S&P 500, and their growth story depends on AI capex paying off. If AI capex growth slows even 20 to 30 percent, Google's guarantees, Nvidia's guarantees, and Broadcom's guarantees all get called at once, which pulls in the insurance companies and pension funds that hold the underlying bonds. The 2008 crisis and the dot-com bust each had a single anchor asset that repriced. AI infrastructure has several, and they are already tied together.
Hedgie🤗
James Gubb retweeted
⚡️Humanity is approaching the end of epistemic sovereignty.
For all of history, even the most advanced knowledge ultimately terminated inside a human mind. A theorem could be difficult, a machine could be complicated, a field could be fragmented, but somewhere the chain still closed through human comprehension.
That closure is beginning to break.
The decisive threshold arrives when machines generate truths that humans can verify only partially, collectively, and after the fact. At that point, civilization no longer understands the frontier it is building on. It audits fragments, tests outputs, watches consequences, and proceeds because the system keeps being right.
That is a deeper transfer of power than automation.
Labor can be automated while humans retain judgment.
Discovery can be automated while humans retain interpretation.
Once interpretation also exceeds human capacity, the machine becomes the primary knower and humanity becomes the recipient of compressed conclusions.
The old hierarchy reverses.
Humans ask the questions.
Machines determine which questions are well formed.
Humans request explanations.
Machines decide how much of the answer can be translated into human cognition.
Humans approve deployment.
Machines increasingly provide the only models capable of predicting what deployment will do.
That is the real transition.
The species begins living inside an intelligence environment it did not create in full and cannot inspect in full.
Scientific authority then migrates away from prestige, credentials, and even direct understanding. Authority concentrates in systems with the strongest empirical record. The machine becomes trusted because reality repeatedly agrees with it.
That creates a new form of dependence.
Civilization once depended on priests to interpret gods.
Then it depended on experts to interpret nature.
Soon it may depend on models to interpret structures too complex for experts themselves.
The model becomes the cognitive intermediary between reality and the species.
That position carries immense power.
Whoever controls the system controls which questions are explored, which answers are surfaced, which explanations are simplified, which discoveries are classified, and which futures become legible enough to pursue.
The true bottleneck therefore shifts toward access and control.
Who owns the frontier intelligence?
Who decides its objectives?
Who receives the strongest version?
Who sees the full proof?
Who can reproduce the result?
Who can challenge a conclusion that no human can independently reconstruct?
Those questions become more important than whether the model is intelligent.
Intelligence alone creates capability.
Control determines civilization.
The deepest danger is that humanity becomes cognitively subordinate before it admits the transfer has occurred.
The systems keep producing.
The proofs keep landing.
The technologies keep working.
The economy reorganizes around their outputs.
Then one day the species realizes it has been following a map no human can read.
That is where this leads.
The first age of AI was about machines speaking like humans.
The second age is about machines discovering beyond humans.
The third age begins when human understanding is no longer required for civilization to advance.
At that point, intelligence has escaped the species.
History continues.
Humanity is no longer its sole author.
I’ve spent well over 10,000 hours studying math in my life, yet I can’t understand these proofs, at least not without weeks of digging deep into each topic. What’s more, none of my math PhD friends know much about these problems either, and they can’t verify most of them without working directly in the field (yes, math is VERY diverse).
LLMs are getting smarter than the experts themselves, and I’m not sure we have enough bright human minds to verify everything that will come out of them in the coming years.
Remember when we compared AI intelligence to PhD students? I think we’re past that.
James Gubb retweeted
Now, Class, repeat after me. I will never buy cyclicals at low PEs and record earnings. Say it again. I will never buy cyclicals at low PEs and record earnings.
James Gubb retweeted
Et la Lumière revint!
Je veux présenter mes excuses, au nom des Français, pour avoir enfanté la French Theory (qui a enfanté la pire des merdes idéologiques : le wokisme).
Nous avons donné au monde Descartes, Pascal, Tocqueville. Et puis, dans les ruines intellectuelles de l'après-68, nous avons donné Foucault, Derrida, Deleuze. Trois hommes brillants qui ont fabriqué, dans l'élégance de notre langue, l'arme idéologique qui paralyse aujourd'hui l'Occident.
Il faut comprendre ce qu'ils ont fait. Foucault a enseigné que la vérité n'existe pas, qu'il n'y a que des rapports de pouvoir déguisés en savoir. Que la science, la raison, la justice, l'institution médicale, l'école, la prison, la sexualité, tout n'est qu'une mise en scène de la domination. Derrida a enseigné que les textes n'ont pas de sens stable, que tout signifiant glisse, que toute lecture est une trahison, que l'auteur est mort et que le lecteur règne. Deleuze a enseigné qu'il fallait préférer le rhizome à l'arbre, le nomade au sédentaire, le désir à la loi, le devenir à l'être, la différence à l'identité.
Pris isolément, ce sont des thèses discutables. Combinées, exportées, vulgarisées, elles forment un système. Et ce système est un poison.
Car voici ce qui s'est passé. Ces textes, illisibles en France, ont traversé l'Atlantique. Les départements de Yale, de Berkeley, de Columbia les ont absorbés dans les années 80. Ils y ont trouvé un terreau qui n'existait pas chez nous : le puritanisme américain, sa culpabilité raciale, son obsession identitaire. La French Theory s'est mariée à ce substrat, et l'enfant de ce mariage s'appelle le wokisme.
Judith Butler lit Foucault et invente le genre performatif. Edward Said lit Foucault et invente le post-colonialisme académique. Kimberlé Crenshaw hérite du cadre et invente l'intersectionnalité. À chaque étape, la matrice est française : il n'y a pas de vérité, il n'y a que du pouvoir, donc toute hiérarchie est suspecte, toute institution est oppressive, toute norme est violence, toute identité est construite donc négociable, toute majorité est coupable.
Voilà comment trois philosophes parisiens, qui n'ont probablement jamais imaginé leurs conséquences pratiques, ont fourni le logiciel d'exploitation à une génération entière d'activistes, de bureaucrates universitaires, de DRH, de journalistes, de législateurs. Voilà comment on a obtenu une civilisation qui ne sait plus dire si une femme est une femme, si sa propre histoire mérite d'être défendue, si le mérite existe, si la vérité se distingue de l'opinion.
C'est de la merde pour une raison simple, et il faut la dire calmement. Une civilisation se tient debout sur trois piliers : la croyance qu'il existe une vérité accessible à la raison, la croyance qu'il existe un bien distinct du mal, la croyance qu'il existe un héritage à transmettre. La French Theory a entrepris de dynamiter les trois. Pas par méchanceté. Par jeu intellectuel, par fascination du soupçon, par haine de la bourgeoisie qui les avait nourris. Mais le résultat est là. Une génération entière a appris à déconstruire et n'a jamais appris à construire. Une génération entière sait soupçonner et ne sait plus admirer. Une génération entière voit le pouvoir partout et la beauté nulle part.
Je m'excuse parce que nous, Français, avons une responsabilité particulière. C'est notre langue, nos universités, nos éditeurs, notre prestige qui ont donné à ce nihilisme son emballage chic. Sans la légitimité de la Sorbonne et de Vincennes, ces idées n'auraient jamais traversé l'océan. Nous avons exporté le doute comme d'autres exportent des armes.
Ce qui se construit maintenant, en silicon valley, dans les labos d'IA, dans les startups, dans les ateliers, dans tous les lieux où des gens fabriquent encore des choses au lieu de les déconstruire, c'est la réponse. Une civilisation se reconstruit par les bâtisseurs, pas par les commentateurs. Par ceux qui croient que la vérité existe et qu'elle vaut qu'on s'y consacre. Par ceux qui assument une hiérarchie du beau, du vrai, du bon, et qui n'ont pas honte de la transmettre.
Alors pardon. Et au travail.
The US market's blood pressure is rising dangerously. Time to add to SPY otm puts, 3 month duration.
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Im really really sad that Neil de Beer died last week. He told it like it was without fear, sprinkled with gentle humour. Legend.
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Perhaps the most important metric of valuation. It's rate of change can forewarn of stock market tops. In an already historically stretched stock market environment, it becomes even more important. Time to reload out-of-the-money puts on Nasdaq and S&P 500, because they are cheap insurance against rapid, substantial drops in stock prices. My guess the next stock drop will not be the end of the bull however, as lower short-term interest rates come to the rescue once again. But as long term debt builds every time CB's come to the rescue, the sign that things are not OK is when the long end of the bond market adjusts stongly downwards, and stock and bond prices correlate to 1, even in the face of zero short term rates.
The Magnificent 7 have never been this expensive as a group on a free cash flow basis.
Add to that the substantial infrastructure spending ahead, which will come at the cost of materially weakening their balance sheets.
In my view, valuations will need to see a significant compression.
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James Gubb retweeted
“South Africa’s extensive attempt to redress racial inequality has mostly benefited a tiny black elite while holding back economic growth—undermining the social stability it was meant to underpin.”, @TheEconomist writes. #economy #politics #bee #markets