AI House Of Cards

Artificial Intelligence is bad for the economy, bad for financial markets, bad for the environment, and bad for society. Therefore it's being pursued at breakneck speed...

I'm currently reading a book about OpenAI and its CEO Sam Altman, called "Empire of AI" by Karen Hao. In it, she pulls no punches. I'm still in the early chapters, but from his early career Sam Altman is depicted as a Tech megalomaniac and pathological liar. Which makes perfect sense because AI is an amorphous technology that is rife with hyperbole and exaggeration. The science behind AI is intended to solve all of humanity's problems such as wealth inequality and environment destruction, but the truth is that it's making these problems far worse. AI is concentrating wealth in the hands of a few Tech oligarchs on a record scale. And the energy consumption of AI is sending electricity consumption sky-rocketing. The exact opposite of what it was intended to accomplish.

U.S. electricity CPI:

OpenAI was initially co-founded in 2015 by Elon Musk, Peter Thiel and other Tech oligarchs as a non-profit research organization to monitor corporate AI developments and ensure that they were to the benefit of humanity. It was meant to be an altruistic organization. However, since Sam Altman became CEO (2019) the company has morphed into a hyper-competitive profit-seeking corporation that is now the highest valued private company in the world currently valued at $500 billion. In 2023, the board of directors attempted to fire Sam Altman due to his opaque management style and his abandonment of the core values, but they failed to remove him because the employees of the company who had been enriched by Altman, threatened to quit. Subsequently Altman's power has grown exponentially, and over the past several weeks he has announced AI infrastructure deals worth $1 trillion which has caused AI stocks to go late stage parabolic. Every time Altman announces another deal with another company, the company's stock goes vertical, which makes him the most powerful man in Silicon Valley. Up until this year Nvidia CEO Jensen Huang was the AI kingmaker, but Altman has superseded Jensen Huang as the most powerful Tech megalomaniac by putting OpenAI at the center of the Tech universe.

AI has taken over the stock market. Because AI IS the stock market:

What Sam Altman is attempting to create is the "Master Control Program" from the science fiction movie Tron circa 1982 with Jeff Bridges. The MCP is an all powerful AI that seeks to control the entire world from a central command center. Obviously ChatGPT is a far cry from a true MCP, but the scale of deals announced over these past few weeks shows that Altman is making a record land grab claim to all available computing resources - data centers, servers, and semiconductors on behalf of OpenAI.

I find Sam Altman to be very similar to another recent Tech megalomaniac - Sam Bankman of FTX notoriety. Remember him? Bankman was creating an entirely new Crypto empire to the benefit of humanity. Everything he did was couched in socialistic terms for how it was going to lead to Tech Utopia. Unfortunately his Crypto empire was riddled with fraud and corruption AND he was a pathological liar. So the whole thing collapsed like a cheap tent and then he was jailed.

However, Sam Altman's web of deals make Bankman look like a piker by comparison. Instead of throwing around a few billion, Altman is now reaching for the $trillion mark.

"Increasingly complex transactions make it challenging to evaluate how demand for AI is developing and increase risk around AI's success. The sustainability of the current investment cycle ultimately depends on whether AI generates durable cash flows to support returns on the significant capital being committed."

Obviously I don't think that Sam Altman will succeed in creating his AI Master Control Program and enslaving humanity. Because long before that happens, the circular financing house of cards that it's predicated upon will collapse.

What is shocking is how many politicians, CEOs, Tech leaders and money managers are now complicit in this unprecedented fraud. AI is a job killing machine that concentrates wealth in the hands of the few. It's a financial destabilizer that has taken over financial markets. It consumes ludicrous amounts of energy. And it will ultimately lead to a collapse in human intelligence. What is the value of a human PhD if an iPhone has 100x the intelligence? Who will want to learn anything when all answers are instantly available on demand?

Writing on Friday October 10th, Trump has restarted the trade war with China due to their hoarding of Rare Earth metals, the very type of materials that are central to the AI arms race. Which means that AI is now central to the global economy and global trade.

We must now pray that the AI bubble explodes before it can deliver on its unquestioned promise of enslaving humanity.