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PaperclipPerfector  1mo ago (text post)   27967 thread views

Culture War Roundup for the week of October 13, 2025

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AI is Too Big to Fail

You've probably been hearing that we're in an AI bubble. I think that's both loaded and reductive, and I'd like to take some time to help people understand the nuances of the situation we're currently in, because it's deep. To be clear, I am pro AI as a technology and I have an economic interest in its success (and for reasons I'll discuss, so should you), however there is a lot more going on that I don't agree with that I'd like to raise awareness of.

AI capital investments are running far ahead of expected returns, and the pace of investment is accelerating. Analysts estimate AI-linked activity drove roughly 40–90% of H1-2025 U.S. GDP growth and 75–80% of S&P 500 gains. If it wasn't for AI investments, it's likely the United States would be in a recession right now. According to Harris Kupperman of Praetorian Capital “the industry probably needs a revenue range that is closer to the $320 billion to $480 billion range, just to break even on the capex to be spent this year.” It sure sounds like a bubble, however thinking of it as just another bubble would be doing a disservice to the magnitude of the dynamics at play here. To understand why, we have to explore the psychology of the investors involved and the power circles they're operating in.

The elites of Silicon Valley have cozied up to Donald Trump in a way that's unprecedented in the history of modern democracy. They've lined the pockets of his presidential library foundation, supported his white house renovations, paid for his inauguration and provided a financial lifeline for the Republican party. Between Elon Musk, David Sacks, Sriram Krishnan, Peter Thiel and his acolyte J.D. Vance, Trump has been sold the story that AI dominance is a strategic asset of vital importance to national security (there's probably also a strong ego component, America needs "the best AI, such a beautiful AI"). I'm not speculating, this is clearly written into the BBB and the language of multiple executive orders. These people think AI is the last thing humans will invent, and the first person to have it will reap massive rewards until the other powers can catch up. As such, they're willing to bend the typical rules of capitalism. Think of this as the early stages of a wartime economy.

[...]

I'm going to say something that sounds a little crazy, but please bear with me: from a geopolitical perspective, what we're doing is a rational play, and depending on how valuable/powerful you expect AI to be and how hostile you expect a dominant China to be, possibly a near optimal one. If you're a traditional capitalist, it probably looks like a bad move to you regardless of your beliefs about AI; you're going to need to put those aside. This is not a traditional economic situation. We're in an arms race, and we're veering into a wartime economy, or at least that's how the powerful view it.

[...]

Returning to the traditional capitalists, I'd like to note that they aren't wrong; this AI push is unsustainable (for us). I'm not sure how long we can run our economy hot and directed before the wheels come off, but my napkin estimate is between 5-10 years, though it's likely we'll lose the political will to keep pushing before that point if the AI transformation is underwhelming and we still have a democracy. To further support the traditional capitalists' position, if AI unwinds at that point having under-delivered, the economic damage will probably be an order of magnitude greater than if we had just let the bubble deflate naturally. This will be exacerbated by the favorable treatment the administration will make sure the Oligarchs receive; we will suffer, they will coast.

Where does all this leave us? For one, you better hope and pray that AI delivers a magical transformation, because if it doesn't, the whole economy will collapse into brutal serfdom. When I say magic here, I mean it; because of the ~38T national debt bomb, a big boost is not enough. If AI doesn't completely transform our economy, the massive capital misallocation combined with the national debt is going to cause our economy to implode.

I don't have the expertise needed to evaluate the economic arguments, so I'm mainly posting this here to solicit feedback on the linked article.

It's probably too late to avoid a future of "brutal serfdom" regardless of what happens, even if we reach singularity escape velocity. Power will do what it always has done, which is centralize in the hands of a few to the detriment of the many; turning every human into a cyborg god won't change that (you simply have the problem of organizing the coexistence of cyborg gods rather than the problem of organizing the coexistence of baseline humans). To think otherwise is to implicitly rely on a Rousseauean (and anti-Hobbesean, channeling Hlynka) presupposition that people are basically good and just and suffering is merely an incidental byproduct of material lack, which we have reason to be skeptical of. The second half of the 20th century provided what were probably the most fertile material and social conditions for freedom that have ever been seen in human history; regardless of wherever we're going now, we're leaving freedom in the rear-view mirror.

Hey, Gemini 3 Pro looks pretty damn magical if the clips people are posting on twitter are true. Of course there's no actual use-case for oneshotting a crappy replication of the windows operating system (documents, paint, calculator and so on) in HTML, recreating a crap version of the Binding of Isaac or Vampire Survivor, making some mid music to go along with the game. But there's no use-case for going to the moon either, it's a way to flex, a costly show of ability. The real strength of an AI is in things that can't easily be shown off visually, stuff that needs it to be fully released first!

Check out what people have been saying, it's pretty good: https://x.com/search?q=gemini%203.0&src=typeahead_click

Sonnet 4.5 is genuinely creative in its writing IMO. Every six months, there's a significant improvement in capability.

And the US does need some kind of qualitative edge, otherwise China will wipe the floor with America. They're bigger, they have more talent and they have more energy and industry. Their government is just smarter too, they don't feel the need to shut down the government over whether illegals get healthcare or not, they're just not in that genre.

It's probably too late to avoid a future of "brutal serfdom" regardless of what happens, even if we reach singularity escape velocity.

Why would we even be serfs, what do we have to offer? Unless things go well and the AIs are nice, then the situation totally different to human politics. It's not 'new king sweeps in and loots your city, forces you to pay heavy taxes'. The new king would have no need for meatbags, he could dispense with legacy humans. Replace with androids or catgirls or whatever he finds aesthetic. Turn the world to computronium, planetary disassembly, full sci-fi. Serfs need not exist unless he's feeling sadistic.

Many people thinking about ASI are still way too politics-brained. ASI is above and beyond politics as we understand it. I cannot imagine a world where intelligence caps out anywhere near human level. 20 watt brains are miserly in the grand scheme of compute. When we get AGI, ASI immediately follows.

The use case of one-shotting crappy vampire survivor is that you could easily manage a supervised build of crappy Hades or your ARPG of choice. I'm just insanely impressed with how good recent models are at coding. I'm getting them to produce thousands of lines of multithreaded code in Unity's burst compiler with sizable amounts of guidelines and bugfixes, but I'm still getting code in days that would take me 5x that long to produce on my own. Having an assistant that just knows 'Oh yeah, you gotta delete the cache when you change GPU-passing structs', and can just 'tweak that native array to persist height data so we don't need to sample the resultant mesh' is so insanely powerful. As soon as someone solves post-training and long term context, we're probably gonna see a huge amount of digital-friendly jobs get wiped out in a single wave.

We're going to see some insanely ambitious indie games in the next five years. One programmer can now do the work of 2-4 with a really effective AI collaboration workflow. And I don't doubt it'll be 10 in another year.

What tools are you using? I used to use Windsurf code editor but they lost half their team and I don't think they're doing well.

I just use claude code. I don't think the modality matters anywhere near as much as the underlying model and the user instructions. There's definitely an art to prompting it well to get good output, by default it just surges forward along the path of least resistance. Good instructions, and cutting it off when it's beating it's head against a wall, are major force multipliers.

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