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Language: en
Due to AI and a changing global order,
the world is in the middle of the
greatest period of change ever. But
because we're in the middle of it, it is
nearly impossible for us to accurately
see what's going on. We are in the fog
of war. While the world panics over job
loss and killer robots, the real dangers
are creeping in quietly and changing us
in ways most people do not even notice.
America and China are locked in a cold
war, and AI isn't just going to take
people's jobs. For many, it will take
their entire identity. It's already
shaping what we believe, how we connect,
and even what we value. Today's guest is
issuing a very strong warning. His name
is Mogadat, and he's the former chief
business officer at Google X,
best-selling author of the AI book,
Scary Smart, and one of the only people
who truly understands both how AI works
and what it's doing to us. In this
conversation, Mo exposes how the
American perspective is blinding us to
China's true might. How AI is already
changing everything and how we can learn
to navigate the rise of the machines.
Well, do not look away. Here is Mo Gdat.
I think of AI like a magic genie that
can grant all of our wishes. The problem
is the lesson of every magic genie story
is be careful what you wish for. What do
you think we have to watch out for with
AI?
AI is a genie that has no polarity. It
doesn't want to do good. It doesn't want
to do evil. It wants to do exactly what
we tell it to do. And you know, there
there is a nonzero possibility
uh you know some people say 10 to 20%,
uh Elon Musk's view, you know, Immedust,
uh and so on a possibility that we ever
face any existential risk of AI. Uh I
mean, think about it. 10 to 20% is
Russian roulette uh uh odds. This is how
Yo, you just gave me the chills. That's
crazy.
Yeah, you don't you wouldn't stand in
front of the par of the barrel at at 10
to 20%, right? Uh but my issue is that
chronologically we wouldn't get there.
My issue is that I think we have um more
urgent and
you know quite uh crippling effects uh
of human greed, human morality. Let's
put it this way. I think the immediate
negative impact of AI is going to be
human morality using it for the wrong
reason. So they're going to make the
wrong wish is my is my challenge I
think. and and in my in my current
writing uh in Alive, I basically try to
uh to to to explain that it is almost
I'm almost convinced that there is a
short-term dystopia that's upon us on
the way to utopia and and that
unfortunately the short-term dystopia is
not reversible. So, we're going to have
to struggle with a bit of it. Uh but it
can be reduced in intensity and it can
be shortened in time and duration. uh
but that it's only wise to start
preparing and that 100% of the
short-term dystopia is not the result of
AI. It's the result of the morality of
humanity in the age of the rise of the
machines.
All right, give me some specifics. What
what specifically are we going to point
AI at that will become dystopian?
Uh so I call them face rips. So just an
acronym to try and remember. I I don't
say them in that order, but but let's
just quickly list them. Uh F is freedom.
We're going to redefine freedom. Uh uh A
is accountability.
Uh C is human connection. Uh or
connectedness in general. Uh E is
economics. Uh R is reality and our
perception of reality at large. Uh I is
the entire process of innovation and
intelligence itself and where we fit
within that. and P is the most critical
of all of them which is the redefinition
of power right and you know if you want
to understand them reasonably well it's
they're better understood in pairs right
uh so you know you can you can start
with the easier ones the uh the the the
the I and the E if you want the
redefinition of intelligence and
innovation uh and how that impacts on
the redefinition of economics uh I think
we understand that with, you know, AGI
depends on how you define it. It really
doesn't matter because my AGI has
already happened. AI is definitely
smarter than I am. So, I'm done. Right?
Uh I don't care what the rest of
humanity uh defines it at, you know,
that it's their moment. My moment has
come. So, if we if we agree that AGI is
happening in a year, this year, next
year, in a few years, it doesn't really
matter. uh then as you and I both know
and we've been talking about several
times uh that means that the toughest
jobs will be given to the smartest
person and the smartest person will be a
machine which basically will lead to two
very significant shifts in our
economics. Uh one shift that basically
moves the wealth upwards. So there is
going to be a massive concentration of
wealth for those who invest in the right
places and most importantly for those
who own the platforms. I mean, it's not
a secret if you look at the history of
humanity that um you know, if you look
at the the best hunter in the hunter
gatherer tribe, uh you know, could
probably feed the tribe for a week
longer than the second best hunter. And
in return, you know, he got the favor of
more than one mate. That's the maximum
wealth that he could create. But the
best farmer uh could uh feed the tribe
for a full season if you want and as a
result became a landlord and and had
estates and and you know and wealth and
so on. The best industrialist became a
millionaire in the 1900s. the best
information technologist became a
billionaire in you know in the current
era. And and when you really think about
it, uh the difference between them is
automation and and automation
if you want is uh you know the
automation of a hunter is a spear but
the automation of the farmer is the land
right the soil okay most of the work is
not done by the farmer it's done by the
soil and and when you look at the people
who are currently building the platform
AIS uh they will own the soil the
digital soil or the intelligence soil if
you want and so they will you know
aggregate massive amounts of wealth.
There will be a trillionaire before the
2030s for sure, right? Uh the problem is
in that process there is almost full
poverty for everyone else. Uh you know,
you call we call it UBI but UBI really
uh is not something that we've seen
worked in history before. And you UBI
will become will come with demands uh
will come with authority uh will come
with choices. It it can be very utopian
in its in the long term but it would be
very dystopian until it's fully
implemented if you want. And even when
it's implemented in the long term it
would impact on human purpose, human
engagement, value uh appreciation and so
on. So so think about it this way. you
you're getting a dichotomy or you know
uh um sort of um an arbitrage between
some people becoming incredibly rich to
the point where money makes means no
nothing at all and the majority becoming
incredibly poor where they're basically
uh you know obedient to be fed and
now is that because Mo you think that
they're going to lose their jobs going
back to the statement you made that the
smartest people will get the hardest
jobs okay
yeah job loss is something that um Maybe
not now. It's very interesting to go
through these different things, but I do
want to really dive into mechanistically
um how that's going to work. In fact,
one thing I want to do before we keep
going, and this is something that
largely I've gotten um distilled from
you, it's what I call setting the table
for what's about to happen. So again, to
plant a flag, you and I share a belief,
and this is one of the reasons I like
talking to you so much, is that, hey,
this all ends in utopia, but we go
through this brutal
um interim process that I don't think
people understand how scary this is
going to get.
Um, so setting the table for that,
you've got the rate of change is the
thing that I think people are just not
paying enough attention to. Everybody
can wrap their heads around this thing
gets smarter than me, but they're not
understanding how fast this is
happening. So, uh, if I'm not mistaken,
I and I know I'm very close if this
isn't exactly correct. AI doubles in
power every 5.7 months. So,
yeah, I calculated 5.9. So, yeah.
Okay. I mean, she's like crazy town. So,
in less than six months. So, it's going
to double in power twice in a year. Uh,
that that is a a rate of change that I
think people are are going to struggle
with. Now, transitional moments always
cause disruption.
there is a certain rate of change that
humans can deal with but AI exceeds at
least from where I'm sitting the rate of
change that we can handle.
Uh and given that
Yeah. So given that things begin to
spiral out of control and you said
something um that I think is
uh I agree with which is that AI will
have the power of God. Um, so with those
one, do you disagree with any of that?
No, I don't. I just want to double down
on it and say that it's at 5.7 or 5.9
months in the absence of new innovation.
So So you you you have to imagine that
uh for for break free and go even faster
100%. And if quantum computing is solved
or if you find a completely new
algorithm or if AI start to teach each
other rather than wanting us to teach
them if you know synthetic data becomes
much easier to attain and so on and so
forth. Uh, you know, there are so many
so many I mean Deep Seek is was just a
blow for everyone. like a week before I
think was Stargate 500 billion dollars
and then Deep Seek comes out and says we
did it I don't know for how much like 33
times less than Chad GPT40 or something
like that and and and it's not you know
it doesn't matter because I heard you I
heard your original analysis on on
Deepseek and that you know they were
cheating a little and I agree but you
know they're cheating with the same
resources that OpenAI had. OpenAI could
have taught their model the same way.
Actually, as a matter of fact, they
would have would have been more
qualified to teach their model the same
way. And yet, they were continuously uh
um you know, focused on more and more
and more resources, more and more
compute, $500 billion worth. And then
suddenly you wake up and you go like,
no, I don't need to do that. I can
reinvent something in the learning model
and and it will give me massive
improvements. And of course most people
at the time would go like oh so Nvidia
is going to go down the drain and what
will open AI do? They'll invest the 500
billion in the stuff that they now
found. So suddenly you're doing it 33
times cheaper but using you know 10
times more investment and there you go
it's going to accelerate even more and
more and it's it's hitting from every
side Tom like it's the algorithms are
improving the you know the AI itself
with its math abilities with its
programming abilities is going to be the
next developer so mo most most of the
big CEOs will talk about AI will be the
best developer on the planet by the end
of 2025
They don't talk about 2026 when the next
AI beats that best developer on the
planet.
We can build they can build stuff that
we cannot even comprehend. And I think
and I think the pace of change I I am I
I I got exhausted to try and explain
this to people because you really have
to be an insider of tech to understand
the meaning of the uh of the exponential
function. uh if you live in any other
industry, you're much more in the linear
uh you know trends. Uh and and and this
is not even exponential. This is not
even double exponential. This is
probably quadruple exponential in the
absence of breakthroughs. It is just
unbelievable. I've never lived in
something so fast ever.
Okay. So, um, looking at that, and I
don't know if you'd want to apply this
directly to the letters or not, but I'm
very curious when you think about, okay,
AI is moving at a rate that humans are
not able to comprehend, which then
obviously they're not able to deal with
this. What do humans do in the face of
that level of disruption? Is there
anything in history that you look to to
say, okay, this predicts how the human
part of this equation is going to react?
So the only the only sad reality of
humanity is that something has to break
for us to react, right? Uh you know, you
you and I and everyone who had a tiny
bit of a brain could have told you in
1999 that a pandemic is possible, right?
It's it's really not rocket science at
all. We had SARS, we had swine flu, we
had so many you know and and then
exactly 100 years after after Spanish
flu uh 1920 to 2020 you get a few cases
which I wrote about in scary smart you
know the idea of not reacting if we had
reacting after if we had reacted after
20 cases there would have never been CO
but we had to wait right until it hits
us in the face and then we go like right
whether
conspiracy or not, whether CO is
manufactured or not is irrelevant. The
the the relevance is we only we we wait
until it hits us in the face, right? And
and so something's is bound to hit us in
the face. I hope it's the lighter side,
right? But, you know, a massive hack of
some kind of security or a you know, and
I and I don't know how to say this
without upsetting people. Something some
some things have been hitting us in the
face in in the wars of 2024 there was so
much killing done by machines right in
in today's budgets there is there is so
much investment in autonomous weapons
and and if you've ever searched on
YouTube around defense conferences the
level of bragging that defense
manufacturers are you know they're
bragging about look this is how I'm
going to kill now from now on and you
know They throw a little drone in the
air that flies all the way to a test
dummy and shoots it in the head. Right.
And and
I don't know when humanity wakes up. I
honestly don't. I I mean in a very
interesting way I think your question is
probably the best question ever which is
what do you do to prepare for this? And
and in alive I write a section which I
actually feared that people will be
upset with but it got a lot of you know
of support. I called it a late stage
diagnosis, right? Which basically is an
analogy between
u you know a doctor uh who finds that
his patient uh is diagnosed with a a
late stage uh malicious dis disease and
you know and and and what we're going
through and and you know people normally
ask me how do you speak about this so
calmly and how do you continue to focus
on trying to do the best that you can?
It's because that's what the best
doctors will do. They'll simply sit you
down and say, "Look, we found this,
right? But that doesn't count as a death
sentence, right? This basically is to
tell you that you need to wake up. You
need to change your lifestyle, right?
You need to take certain measures and
there will be no problem, right? And and
I think the challenge is that humanity
is not taking those measures. uh you
know we're we're still entering
how do we how do we get that
how do we get that diagnosis to people I
to me it seems self-evident that what's
going to happen is people are going to
start losing their jobs they are going
to squawk they understand political m
minations so they're going to um protest
they're going to make demands of the
government and
the question that I have is what demands
will they make and how Will we play that
out? And so I'm curious going to the
last one, the P in all of this power.
That feels to me like the one to zoom in
on. Um I don't know how you mean power,
but I think there's going to be a great
power struggle between humans.
Yeah.
Uh what I call the new Puritan movement
and uh technologists, what some people
call transhumanists. Uh for some reason
I I hate that phrase, but
um that feels like that's where the
collision is going to happen. It's going
to be born of people losing their jobs,
it's going to play out as tax the rich.
Um, and when you get into these
hyperpopulous moments where the economy
is going south, uh, and whether GDP
skyrockets or not through robotics,
through AI, I that won't matter if at
the individual level, uh, people do not
get uh, meaning, purpose, and dignity
out of their work. And so that feels
like the flash point. And that flash
point feels like it's I mean 24 months
away. It's not distant future.
Exactly. Exactly. It's it's shocking,
isn't it? But nobody's talking about it,
right? I have good news to start because
we don't want to just, you know, talk
about the doom side
in in in in the way you describe it.
There is actually an interesting element
that rarely is spoken about, right? All
of the productivity gains mean nothing
if there is no consumer purchasing power
to buy it, right? Because at the end of
the day, if you take all of the wealth
and concentrate it in the hands of, you
know, very few, they'll buy Ferraris
only. They're not going to buy Fiats,
right? And accordingly, there is no
business uh to create anything at all.
So, so for AI to exist and do the work,
someone has to have the purchasing power
to buy this. So if you you know if you
take the US economy I I don't remember
last year but it's regularly around 62%
is consu is consumption it's not
production that creates the GDP and so
if you take away the 62% you take away
the entire economy and so you have to
understand that the loss of jobs uh is
going to have to be resolved somehow
purpose and meaning and other this these
are interesting topics that are
philosophical we can talk about but from
an an economic point of view Okay, you
have to keep people alive otherwise you
have no reason to compete, right? You
have no reason to create or produce. So,
so there is good news there. The the
issue here is that it doesn't take a lot
of AI intelligence to describe that to a
a normal economist with a simple economy
degree, you know, economics degree will
tell you that you need the consumption
side. Now, we know this, but nobody's
doing anything about it. Okay? Nobody's
doing anything about it. Not because it
cannot be resolved but because nobody
assumes the responsibility that this is
their bit. Okay. They the you know the
the the the payment of of humans through
work has been outsourced to the
capitalist not the government. And so
the government does not understand what
it takes to pay humans because that's
communism. Let's not do that. Right? And
or socialism at its best assumption.
Right? and and and so the idea here is
that at a very deep ideology
uh we are on one side the people that
need to jump in and engage are not even
uh allowing themselves to lose their
positions because if they mention that
they're in uh the wrong camp and the
capitalists are doing what they know
very well which is take the money away
make us more profitable the economy will
find a way not at that scale of
transition Okay, the economy will need
to find intervention to find that now.
So the good news is unfortunately
we're going to hit a very rough patch
before we start fixing it. But the good
news is that we saw with furlows and and
government incentives and so on during
co that governments are possibly capable
of doing this with a lot of money
printing which destroys the economy for
a while but eventually will figure
something out right. uh the the struggle
is the struggle with power that you that
that you mentioned. So we have we have a
a a a diversion of power that's never
happened in history before. Power
normally acceler you know aggregated to
the top. Okay. And what you're going to
see with artificial intelligence uh or
intelligence at large I mean think about
it this way. You and I before we
recorded were talking about how we're
using AI to become more intelligent. The
way I look at it is now I go to my AI
and I borrow 40 to 50 IQ points, right?
And and you and I know that if you've
ever worked with someone who's 40 IQ
points more than you, that is
staggering. That is an incredible amount
of compute, right? And so I can now
borrow this at 8 a.m. every morning. And
it's just incredible, huh? Uh so so
those who will borrow intelligence will
become more powerful. That's the
reality. H uh the problem is as I said
those who own the platforms, those who
own the um the uh edge in the cold war
in the arms race to AI will some at some
point will aggregate so much power that
it actually becomes
um uninteresting to give it to the rest
of us. Okay? And and that includes you
and I by the way. So you know middle
class, top upper top class, lower top
class, whatever it doesn't matter. So so
you know you have to imagine and I use a
a freakish example the best the first
person that completely augments their
brain with AI
uh will immediately make sure that
nobody else gets this
because you know it's you know if I
promote you to the position of god why
would you make other gods? It's as
simple as that. Okay. And so and and of
course you can take that at a nation
level, at a company level, at a, you
know, a team level, whatever. So, so
this is where the cold war is taking us.
Massive concentration of power on one
side, right? With a democratization of
power on the other because still you and
I when you say cold war, who's the cold
war with?
Oh man.
uh
you know most of my best friends are
American but uh can I I request
permission to speak freely please?
Yeah.
Um you know you know when you're in
school and you're 11 and then one kid
becomes taller than the others and then
he bullies everyone, right? And then
when you're 16, most of us are taller
than him, but we just don't want to
really disappoint him. Uh, you know, so
we sort of like tell him to stop
bullying, but he continues to bully
everyone.
Yeah. So somehow
until today was a world order that
unfortunately I don't believe will
continue.
Okay.
uh and and and America's ways of trying
to say I will force everyone into
submission.
The other the other kid is really really
tall now like seriously.
Okay. and and and they are again most of
the of the western media hides those
facts but from a a a purchasing power
parity uh they are a much bigger GDP
than you are uh from a you know a a
unity point of view the world everywhere
doesn't want um you know a single power
to rule anymore okay especially when the
single power for the last few years has
completely abused its power I
for the last many many many many years
but it became a bit like you're not the
tallest one and you're really bully
you're a really an annoying bully so
seriously let's slow it down right and
you can see examples of that everywhere
the Canadian response to the the tariffs
they you know I again I don't know if
that's shared in in the US or not but
the Chinese response and the Russian
response to the tariffs are actually
quite interesting huh you know US
politics believes that they can twist
the arms of China. At the same day, half
a billion dollars worth of American uh
beef was returned to America from
Chinese uh uh ports. The the difference
is the Chinese didn't say it's tariffs.
They were not saying we are not going to
they simply said does not meet health
and safety standards. Right? very very
very hidden and very you know and half a
billion dollars for Texas is a
reasonable punch. Okay. And and when you
really think about it uh I I had this
conversation with my wonderful friend uh
Peter Demandis and and we were talking
about the idea actually know it was with
uh Scott Galloway. uh Scott, you know
how uh Scott is, you know, very very pro
doing, you know, what what needs to be
done. And I unfortunately believe that
and there is no logical way on the game
board in my mind for someone to win
intelligence supremacy. So you have
America trying to to accelerate a cold
war where they want to have the biggest
bomb, AI bomb in that case. uh you know
it seems that the world is not
responding the same way. Actually again
if you look at it in internationally the
Chinese are really not trying to but
every now and then they they sort of say
look we can if we want to. Uh but the
problem here is this. This is not an AI
only war. Okay. This is an AI war that
where where one bully is trying to get
everyone into submission in a world with
major nuclear powers. Okay. This is the
shittiest idea ever. Okay. And and and
and the the problem is very
straightforward. The problem is um uh if
you try to get someone to submission as
soon as they feel that they're about to
be submitting, this is going to escalate
out of proportions. Right now, there has
been multiple examples in our world
where we cooperated internationally for
the greater good. CERN is a great
example of that, right? The space
station is a great example of that. And
and we can do that. And believe it or
not, all it takes is for one bully to
say, "Hey guys, can we play now? Can we
just because this is incredible
abundance and we're all threatened by
cyber crime or, you know, I call it ACI,
artificial criminal intelligence, that's
right around the corner. Can we just
please play along now? All of us like
let's all get in a room. Let's develop
AI for the benefit of everyone. Uh
everyone is going to make a lot of money
in the first you know 5 years but
nobody's going to need money after 5
years anyway because everything will be
available for free. Can we please play
along? And the bully doesn't want to do
that which upsets the rest of us. We'll
get back to the show in a moment, but
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theory. And now, let's get back to the
show. The fact that this is all
happening as Thusidity's trap is set is
uh it's one of those things that makes
you go, "Wow, we really are living in
simulation and this is uh maximally
interesting, I guess, but absolutely
terrifying." Uh that's a really clear
way of expressing what you were talking
about at the beginning, which is that my
worry is an AI. My worry is, you said
greed. I'm going to broaden it out to um
the human ego and all of its
complexities. And for people that have
never heard of Thusidity's trap, it goes
like this. You have this is literally
from ancient Greece. Uh and they
recognized when you have one great power
that is declining and you have another
great power that is rising as will
happen uh on a never-ending cycle. The
declining power absolutely refuses to
relent uh and acknowledge the rising
power as their peer or god forbid as
somebody that has surpassed them. And
the rising power will simply not accept
uh not being recognized for the power
that they have become. And so this this
setup becomes really predictable
historically because what you have is
this impulse to protectionism on the
part of the declining power that's like
whoa hold on a second like we did this
globalist thing. It's made our enemy
more powerful. We want to now try to cut
them off. Uh we want to retain our
power. They start bullying. They will
inevitably be up to their eyeballs in
debt which uh read Ray Dallio like he
just pegs this as like God,
hey, you can just watch the debt and you
know how this is going to play out. Uh,
and so here we are. But this time on the
cusp of building a super intelligence
and every time that I go through because
I think anybody watching their impulse
is going to be to say, "Hey, whoa, if
we're talking about a rate of change
here that is just insanity, we need to
pump the brakes. Like, why aren't we
doing that?" And then you remember that
you have two great powers staring at
each other. both recognize AI as the
most tremendous weapon since um nuclear.
And so they are each uh stuck in the
prisoner's dilemma. If if I don't do it,
I know they're going to do it. And so uh
it is an existential need
to be the one to develop this first. And
so there are no breaks.
Correct.
Yeah.
I mean, if you It is It is. And it is.
And you know, I'm too small to show this
to the world and it frustrates the hell
out of me. Okay? But if you're if you're
an applied mathematician, there's no
game and there's no quadrant on this
game board that works. It is and I'm not
uh you know I'm not fear-mongering here.
I'm basically telling every citizen
everywhere in the world to wake up to go
to your congressman or whoever, okay,
and just tell them we don't want our
lives to be toyed with this way. And you
know, I I spoke about accountability and
face our IPs. The challenge, Tom, is
that my life is being decided by Sam
Hartman. I never elected Sam Hartman.
Okay, this is this is not right. And and
if if this goes to [ __ ] nobody's going
to stop and say, "Hey, Mr. Alman, come
here and tell us what you're doing. It's
too late." Right now, the the more the
more interesting side, by the way,
because I I really, if you don't mind, I
will go back to AI, but you you
mentioned debt. Okay, if you if you
don't mind me saying the challenge of of
America is not debt, it is massive. It's
like a the biggest challenge on earth,
okay? But what's becoming bigger is
inflation. So if you look at your at
your modern history since Nixon what
happened is if you look at everything in
America that was made in America or sold
in America. So services, housing,
whatever, it's rising in in price. Okay.
Everything else that you imported was
going down literally. It first went down
before it stabilized. So you were
basically exporting the inflation of the
last 50 years. Okay. To the rest of the
world. H. And the way you did that is we
sold you stuff. You gave us dollars
worthless printed. Okay. So, we put them
back in your market.
And after you sanctioned the Russians,
everyone that I know who's a
multi-billionaire said, "Ooh, so if my
government upsets their government, my
money goes, no,
I want to withdraw my US dollar treasury
assets." Okay? And so you can see Japan
is 25% down. China is I don't remember
the exact number, but hundreds of
billions down. Okay? Everyone is doing
what? they're shipping you back your
dollars.
Okay? And and so basically what you're
ending up with is a is a is an economy
with so much more dollars and limited
number of goods to buy. Everything will
go through the roof. And then
brilliantly you decide on top of that
let's add tariffs so that you know we we
get uh goods to be 25% more expensive
immediately and give our American
manufacturers some slack so that they
too raise their price to 24%.
Okay. And who's paying for all of this?
American citizens. So, so it in in my
mind, believe it or not, the the there
are two wars if you live in America. One
war is the is the is the cold war of
intelligence supremacy, right? And the
other war is I truly and honestly fear
instability in America, right? I truly
and honestly don't understand how all of
my friends some of which are
millionaires okay will survive this
because unless you have all of your
money in gold maybe I don't know even
gold is not safe right what will you do
what what what can you do you're you
know from a from a from a a liquidity
point of view that asset called the US
dollar is not going to buy you the same
things as it did last year
and and you you have to walk the streets
of New York. Oh my god. Like I haven't
been to New York for a while and then I
went uh a couple of a month ago.
This is I'm sorry. This is a dump.
This is like compared to Shanghai. This
is Delhi. It is really it's
deteriorating infrastructure-wise. You
know, California is deteriorating
infrastructure-wise. you know some some
parts of the US are holding it together
but everywhere is just and I don't know
how people are sustaining all of this so
so there is there is an opportunity
believe it or not and I say that openly
and alive I say AI is not the
existential risk of humanity it is our
salvation it can solve all of those
problems all we need is for the top guys
to say all Right? You know what? Open
letter suspend AI for 6 months doesn't
work. Okay? Let's just pull all of our
efforts together. Okay? Do a CERN
uh kind of committee, develop AI for
everyone, and just basically make
everything for free, right? And whoever
is rich today will give you uh the
opportunity to buy your cars in orange.
So, hey, ego satisfied. You're the only
ones that get orange cars. all of the
rest of us get green cars. Okay? And and
and it's solved honestly because by the
way if you solve energy using
intelligence making cars becomes free.
If if you create robotic workforces
using intelligence,
making garments becomes free, literally
free. Like this becomes two cents.
And and and and how are we not betting
on this abundance
because we're constantly stuck in that
scarcity mindset of if we don't win,
they win.
I think what's going to happen is nobody
wins, we all lose.
Yeah, I think that that is a bitter pill
that you and I have both uh come
smackbang into. Uh before we get back to
AI, I want to walk through the way that
I see this moment in debt uh and all of
that. So, one, if you can sharpen my
thinking, I'm here for it. But I think
the
there are two really important things
that the world should be paying
attention to right now. One is obviously
AI. Um I don't think it'll be a win or
take all even if for no other reason
than and I can't I I don't know that my
read of this is exactly correct but
given the things that you cited with
scientifically we tend to share
um insights even like if you take the US
nuclear program uh we leaked that
information to Russia maybe just because
they were being paid or maybe because
they knew that one country having this
was a very bad idea. Um you see very
similar things with CERN a lot of
cooperation where people realize hey if
we're going to solve the fundamental
nature of physics this is better for the
entire scientific community to have it
you see the same thing happening in AI
where they're sharing all these
breakthroughs as fast as they can um
look I'm as an American I'm admittedly
suspicious of China uh but even deepseek
they published the paper it's open
source like all that information, all of
those insights to make things more
efficient are getting out there. I
choose to read that as um the computer
nerds that are drawn to this are acting
more like the science side of computer
science than they are just the computer
side. And so there's a sense of sharing
all of these breakthroughs and all of
these insights. You mentioned EOD
earlier. Emod is just on an absolute
crusade uh to make sure that AI is open
source so that people can have access to
what could be um on the bright side just
incredible intelligence like you said we
can all go take advantage of 40 50
points of IQ that will obviously grow to
be 400 5,000 points of IQ um but also as
a weapon and so making sure that
everybody is at least in uh mutually
assured destruction territory is better
than one having it. Okay. So, that
that's the first thing. The second thing
is the cold war between the US and
China. And I'm going to paint maybe an
even darker uh photo than you if that's
possible.
Be darker. I was very grumpy. You can't
go darker than that.
I I think this is just objectively real.
So, okay, we we both agree that what
you're up against is human nature.
Forget about AI for a second. Just what
are humans like? Uh we've already talked
about Thusidity's trap. you have two
powers that are on a collision course
that historically tells you there's
really no way out of um I I'll plant
that I think as we both agree AI is the
potential way where we all grow our way
out of this debt trap. Um but okay
focusing on the cold war between us and
China. So the entire modern world is
predicated on chips that are coming off
coming out of a small island off the
coast of China known as Taiwan. Uh and
you've got China that has been very
clear we are going to reintegrate with
Taiwan.
Uh you have China rising as a regional
um superpower where they're going to
have their sphere of influence.
Obviously globally, economically they
matter tremendously and they've been um
building allies all around the world as
we are now trying to alienate them as
fast as we can. Uh but it comes down to
that. Now, I think despite the what I
call Trump's hokeyp pokey tariffs, uh,
which are that's as from where I'm
sitting, if you listen to Trump, you're
going to drive yourself crazy. If you
listen to Scott Bessant and, uh, Howard
Lutnik, there's at least internal logic.
And so, I'll walk you through my read on
what they're trying to do and ask
everybody to ignore the chaos right now
that Trump is creating. So I'm if I'm
Scott Besson, Secretary of the Treasury,
I am uh Howard Lutnik, Secretary of
Commerce, and I'm two of the greatest
capital allocators of all time. We are
two of the best people at reading the
global markets and profiting from it.
And I'm looking at this cold war that I
just set up, explained. I understand
Taiwan and how much that's going to
matter. I understand that um I've been
able to export inflation across the
world for a very long time. I understand
that people are now responding uh and in
a way that's negative to us. I
understand that we have insane debts and
we're going to have to start bringing
those down. I'm looking backwards. These
guys know Ra Ray Dallio intimately. So I
guarantee they've read his books on debt
and the cycle that that moves in. And so
they're going, "Okay, hold on a second.
This is how empires end. America may not
have been an official empire, but
obviously with military bases and all
that, we act like an empire. They're the
same expense structure as an empire. And
so, we are now in a position where we're
going to have to deal with that debt.
And looking at the way that they are
moving, again, I'm asking people to set
aside the rhetoric of Trump, the sort of
chaos of Trump, um, and look at the the
threading of the needle that they are
trying to do. And I think it goes like
this. We have to find a reduction. And
these are literal words from Howard
Letic. We have to find uh a trillion
dollars of fraud, waste, and abuse
because the US government spends two
trillion more than it takes in in taxes.
We have to find a trillion dollars in
waste, fraud, and abuse. Q Doge. Uh and
we have to make a trillion dollars in
newfound revenue, Q tariffs, Q um the
Trump gold card, and a whole bunch of
other things. Okay. You've already
pointed out the danger of the tariffs
and we're seeing the second and third
order consequences of what Trump is
doing from a theoretical negotiating
tactic standpoint of create chaos, ask
for the moon, be willing to settle for
something more reasonable. um that puts
us in a game of chicken that I'm going
to set aside for a second and say um if
I am correct that we are in a cold war
with China that we are racing towards
Thusidity's trap meaning that you have a
high risk of kinetic war between the US
and China you cannot you just cannot
even just morally you cannot be in a
position where your number one adversary
controls whatever a ridiculous
percentage of your manufacturing base.
And so you have to find a way to onshore
some of that manufacturing.
And if you look back at World War II and
you say the story that America tells
itself about what America is is, oh,
Japan [ __ ] with us.
We turned our manufacturing might on and
we win World War II. That's the mythos
in the American mind. And I think there
are a lot of people with that latent
story running in their brain that think
we'll be able to do that again. And they
don't understand. We don't have a
manufacturing base. We make technology.
And
seeing the what I'll call phantom
investments in the US because I think
that they're all waiting to see what
happens at the midterms.
But you've got all these phantom
investments in the US. We're going to
bring all this manufacturing back uh
back. You've got TSMC. I always forget
their call sign, but uh I think that's
it. Uh the chipmaker in Taiwan saying,
"Hey, we're going to make this huge
investment here in the US." Um which if
I'm them makes sense because if I don't
want to be reintegrated with China,
I need to have that escape valve of
being able to uh build in the US. But
setting that aside. So that becomes the
millure of things that are playing out
right now. You have to bring some
manufacturing back. So that like just if
if you are correct and I think you are
the future of warfare for better or
worse is drones. Drone manufacturing
right now is 85 90% China just full
stop. And so if you and I'm talking the
the whole um all the parts everything
even if you're trying to make them here
right now you're beholden to a supply
chain that's going through China. So
they can choke that off immediately. Uh
and they are anything but stupid. And so
if we're moving towards a kinetic war,
they just turn that switch just like
they sent the beef back. They just go,
"Nope, no more drone parts for you." Um,
so
I agree that this is a super precarious
moment and boy do I wish that everybody
could just say, "Can't we all get
along?" But we won't. That that I I'll
just take off the table. That's not
going to happen. And given that that's
not going to happen, how else do you
play it?
So I I have to first agree with all with
every every part of what you said
honestly but I'll I'll I'll try to give
a a slightly different twist on a few of
them.
Okay.
Uh
one one of them is um manufacturing
because I actually agree 100%. But if
you and I going back to AI and robotics
just hold on for 3 years.
the entire edge that China had of cheap
labor, okay, uh which now became large
manufacturing capabilities,
uh moves back everywhere in the world
because you can literally hire robots uh
put them in rooms day and night, get
them to manufacture whatever it is that
you want. which basically means that
cost of energy and cost of shipping
become uh a deterrence for you to uh you
know to move goods around the world.
Okay. So basically it is a no-brainer
that when we get to the point where we
take out the capitalist
arbitrage which was the entire idea of a
capitalist is how can I get labor or you
know manpower to do the work for less
than what I can sell it for. right now.
Interestingly, as we take humans out of
the workforce, it equalizes across the
world. It's 5 years away. Okay? Could be
sooner, by the way, if we start with
interesting industries. The the second
is, and I say that with a ton of
respect, is when at war, war does not
have to be aggressive.
Okay? So, so the idea here of pissing
off Taiwan uh sorry, pissing off China
around Taiwan
makes makes China who also depends on
Taiwan for for the chips of everything
that they make, right? Uh basically
think the same way. So, so if America
has foothold over Taiwan, we China are
afraid. So, you're escalating the fear.
Okay. The opposite is true. The opposite
is to say again like we said with CERN
you know can we agree that Taiwan is
just going to be uh continuing to
support everyone right and and I think
that's a conversation that is very
difficult to have but if it is the the
switch between humanity's existence and
continuation and not it will get
resolved the third which I think is
really where the core issue is is
you know when times get tough we tend to
do more of what we know how to do best.
Okay, which is normally what got things
to be tough and in the first place,
right? So when when when you know when
America competes with China on
artificial intelligence, for example,
they sort of say, okay, only H80s, no
H100s in Nvidia chips, uh you know,
we're going to sanction you from this.
We, you know, we're going to make it
illegal for people to invest in China.
We're going to do this, we're going to
do that. Uh you know, no more uh Chinese
students can come and study in America.
Da da da da da. Okay. And and those
tactics
could work if China was 70 years ago
starving to death. Okay. When you do you
take those tax tactics against this
China, they immediately say, "Okay, how
much does it cost for us to create our
own fabs and create our own microchips,
right? How much does it, you know, what
can what do we need to change about our
students so that they become the best in
the world?" 42% of all AI scientists in
America are Chinese. Who's being hurt by
that fight? It's America.
Okay. And and it's, you know, it is
interesting that the American people are
not fully informed of this that that,
you know, those bully strategies are now
met with the world saying, "Okay, you
know what? If if you're going to
sanction Russia by taking $300 billion
out of the Russian oligarchs, then by
definition, okay, every other oligarch
in the world is going to dd dollararize.
Now, instead of you saying, you know
what, I'm going to, you know, tap the
table and I'm going to shout at everyone
and I'm going to be even more bully.
Okay, you might as well say, okay, guys,
you know what? I understand that upset
you. Can we talk? Right? Because the one
that's being hurt by this is the
American people. Okay? The the American
policy somehow is running in a way that
basically says do more of what you know
how to do best. Now the the more
interesting part of this Tom and I I
really urge you to think about this is
that Russia sorry uh China historically
has never in all of history invaded
outside its border ever. Okay, there was
one case in Vietnam which was again
instigated by the US, right? And it
didn't last for long. Now the the other
side of this is that if you look at the
war at the map of the world today with
with America having 180 plus bases, you
know, military bases across the world,
China has one that protects shipping
through the the the Red Sea. Okay? They
explicitly are giving the world signals
that all we want we don't want to
dominate the world like the empire.
Okay. We want to become prominent for
the world mainly economically so that we
can feed our 1.4 billion people. Okay.
And I may be wrong but but but there
there has not been a sign of aggression
issued by China in your lifetime or
mine. There hasn't been one. Okay. So
what are we reacting to? We're either
reacting to manufactured signs so that
we can continue to have our forever war.
Okay? Or maybe we're exaggerating and
hurting ourselves in the process. And I
think this is where the conversation
needs to happen. Now there could be this
could mean that millions of people die
in Vietnam like we saw in the the 1960s
and 70s and the you know
un unbelie I mean some place like
Vietnam across the world which is
unacceptable if you ask me but you know
what American people will not feel it
right but to bring the war home
economically the way America is doing
it is clear if you're sitting in my seat
outside the
that everyone everywhere in the global
south is saying I don't want to be
bullied anymore and the minute you give
them an alternative through bricks or
whatever that says hey can you you know
ship to me using my currency they take
it okay and and somehow it's not that we
don't like America it's just we don't
want to be bullied anymore and and in
very interesting way it's the benefit of
America to suddenly say you know what
while I'm still taller than all of you
I'll make you my friends, okay? So that
when you're taller than me or as tall as
I am, we can play together.
This cold war is working, believe it or
not, against America. And this cold war,
believe it or not, even in tech, in AI,
is being lost by America. Okay? So Deep
Seek comes in, a manus comes in, quantum
computing chips comes in, come in. They
have 105 cubits now in China.
Okay? And and and I don't know how much
more I can tell the politicians in
America, you're not losing, you're not
winning this through aggression. Win it
through diplomacy. Everyone wants your
market. Everyone loves you. Loves the
movies you send us. They we love your
music. We we we really we have nothing
against America. But the rest of the
world needs to also protect their own
sovereignty. And more aggression is not
helping anyone.
Okay. So, let me see if I understand. Um
what you're saying is that
you you America need to understand that
you
uh China is a rising power. Uh that the
whole world has
No, no, no, no, no. I'm sorry to
interrupt you. I'm sorry to interrupt
you. China is the world's superstar. It
is the world's superpower in in in
purchasing power par. They are a bigger
GDP than America and have been for a
very long time. And most of the world is
much more dependent because of the trade
deficit of America for for so many
years. Most of the world is much more
dependent on China than they are on
America.
Okay. So
you guys have already been passed
economically by China. Uh, so the cold
war that you're trying to wage with them
does not make any sense because not
you're the only ones that are going to
get hurt, but you are going to be
disproportionately hurt. Um,
I'm going to stop there because I think
the next thing I'm going to say is going
to be a prognostic. It's going to be I
think that statement makes a prediction,
but first I just want to make sure that
I got that far correctly.
I I I I don't I don't think you're going
to be disproportionately hurt is
accurate. Nobody knows. Okay. I think
the rest of the world will probably pay
more than the two two superpowers,
right? But but you're going to be hurt.
Like there is a way where this doesn't
hurt anyone. So So there's no need for
the pain. So walk me through the way
that this doesn't hurt anyone because
you're your what you're about to say is
going to be based on your assumption
that China is not an aggressive
nation. They're a nation of influence to
be sure, but they're not going to uh put
military bases everywhere. They're not
going to go into foreign incursions the
way the US has. And so therefore, you
have I don't know th