{"id":10447,"date":"2026-01-10T07:36:44","date_gmt":"2026-01-10T07:36:44","guid":{"rendered":"https:\/\/natharatmouchrika.net\/home\/?p=10447"},"modified":"2026-01-10T07:36:44","modified_gmt":"2026-01-10T07:36:44","slug":"the-ai-revolution-is-here-will-the-economy-survive-the-transition","status":"publish","type":"post","link":"https:\/\/natharatmouchrika.net\/home\/?p=10447","title":{"rendered":"The AI revolution is here. Will the economy survive the transition?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-10448 alignleft\" src=\"https:\/\/natharatmouchrika.net\/home\/wp-content\/uploads\/2026\/01\/780157882aee86f06984d75ecc0924dd-226x300.jpg\" alt=\"\" width=\"226\" height=\"300\" srcset=\"https:\/\/natharatmouchrika.net\/home\/wp-content\/uploads\/2026\/01\/780157882aee86f06984d75ecc0924dd-226x300.jpg 226w, https:\/\/natharatmouchrika.net\/home\/wp-content\/uploads\/2026\/01\/780157882aee86f06984d75ecc0924dd.jpg 735w\" sizes=\"auto, (max-width: 226px) 100vw, 226px\" \/><\/p>\n<h3 class=\"subtitle subtitle-HEEcLo\" dir=\"auto\" style=\"text-align: left;\">The man who predicted the 2008 crash, Anthropic\u2019s co-founder, and a leading AI podcaster jump into a Google doc to debate the future of AI\u2014and, possibly, our lives<\/h3>\n<div class=\"pencraft pc-display-flex pc-flexDirection-column pc-paddingBottom-16 pc-reset\" role=\"region\" aria-label=\"Post UFI\">\n<div class=\"pencraft pc-display-flex pc-flexDirection-column pc-paddingTop-16 pc-paddingBottom-16 pc-reset\">\n<div class=\"pencraft pc-display-flex pc-gap-12 pc-alignItems-center pc-reset byline-wrapper\">\n<div class=\"pencraft pc-display-flex pc-reset\" style=\"text-align: left;\">\n<div class=\"pencraft pc-display-flex pc-flexDirection-row pc-gap-8 pc-alignItems-center pc-justifyContent-flex-start pc-reset\">\n<div class=\"pencraft pc-display-flex pc-flexDirection-row pc-alignItems-center pc-justifyContent-flex-start pc-reset ltr-qDBmby\">\n<div class=\"pencraft pc-display-flex pc-width-36 pc-height-36 pc-justifyContent-center pc-alignItems-center pc-position-relative pc-reset bg-secondary-UUD3_J flex-auto-j3S2WA animate-XFJxE4 outline-detail-vcQLyr pc-borderRadius-full overflow-hidden-WdpwT6 sizing-border-box-DggLA4 pressable-sm-YIJFKJ showFocus-sk_vEm container-TAtrWj interactive-UkK0V6 avatar-u8q6xB\" tabindex=\"0\">\n<div class=\"pencraft pc-display-flex pc-width-36 pc-height-36 pc-justifyContent-center pc-alignItems-center pc-position-relative pc-reset bg-secondary-UUD3_J flex-auto-j3S2WA outline-detail-vcQLyr pc-borderRadius-full overflow-hidden-WdpwT6 sizing-border-box-DggLA4 container-TAtrWj\" title=\"Michael Burry\"><\/div>\n<\/div>\n<div class=\"pencraft pc-display-flex pc-width-36 pc-height-36 pc-justifyContent-center pc-alignItems-center pc-position-relative pc-reset bg-secondary-UUD3_J flex-auto-j3S2WA animate-XFJxE4 outline-detail-vcQLyr pc-borderRadius-full overflow-hidden-WdpwT6 sizing-border-box-DggLA4 pressable-sm-YIJFKJ showFocus-sk_vEm container-TAtrWj interactive-UkK0V6 avatar-u8q6xB overlap-q75iOo\" tabindex=\"0\">\n<div class=\"pencraft pc-display-flex pc-width-36 pc-height-36 pc-justifyContent-center pc-alignItems-center pc-position-relative pc-reset bg-secondary-UUD3_J flex-auto-j3S2WA outline-detail-vcQLyr pc-borderRadius-full overflow-hidden-WdpwT6 sizing-border-box-DggLA4 container-TAtrWj\" title=\"Dwarkesh Patel\">\n<h2 class=\"header-anchor-post\">The story of AI<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7the-story-of-ai\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/the-story-of-ai\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick McKenzie:\u00a0<\/strong>You\u2019ve been hired as a historian of the past few years. Succinctly narrate what has been built since\u00a0<a href=\"https:\/\/en.wikipedia.org\/wiki\/Attention_Is_All_You_Need\" rel=\"\">Attention Is All You Need<\/a>. What about 2025 would surprise an audience in 2017? What predictions of well-informed people have not been borne out? Tell the story as you would to someone in\u00a0<em>your<\/em>\u00a0domain\u2014research, policy, or markets.<\/p>\n<p><strong>Jack Clark<\/strong>: Back in 2017, most people were betting that the path to a truly general-purpose system would come from training agents from scratch on a curriculum of increasingly hard tasks, and through this, create a generally capable system. This was present in the research projects from all the major labs, like DeepMind and OpenAI, trying to train superhuman players in games like Starcraft, Dota 2, and AlphaGo. I think of this as basically a \u201ctabula rasa\u201d bet\u2014start with a blank agent and bake it in some environment(s) until it becomes smart.<\/p>\n<p>Of course, as we all know now, this didn\u2019t actually lead to general intelligences\u2014but it did lead to superhuman agents within the task distribution they were trained on.<\/p>\n<p>At this time, people had started experimenting with a different approach, doing large-scale training on datasets and trying to build models that could predict and generate from these distributions. This ended up working extremely well, and was accelerated by two key things:<\/p>\n<ol>\n<li>the Transformer framework from Attention Is All You Need, which made this type of large-scale pre-training much more efficient, and<\/li>\n<li>the roughly parallel development of \u201cScaling Laws,\u201d or the basic insight that you could model out the relationship between capabilities of pre-trained models and the underlying resources (data, compute) you pour into them.<\/li>\n<\/ol>\n<p>By combining Transformers and the Scaling Laws insights, a few people correctly bet that you could get general-purpose systems by massively scaling up the data and compute.<\/p>\n<p>Now, in a very funny way, things are coming full circle: people are starting to build agents again, but this time, they\u2019re imbued with all the insights that come from pre-trained models. A really nice example of this is the SIMA 2 paper from DeepMind, where they make a general-purpose agent for exploring 3D environments, and it piggybacks on an underlying pre-trained Gemini model. Another example is Claude Code, which is a coding agent that derives its underlying capabilities from a big pre-trained model.<\/p>\n<p><strong>Patrick:<\/strong><em>\u00a0<\/em>Due to large language models (LLMs) being programmable and widely available, including open source software (OSS) versions that are more limited but still powerful relative to 2017, we\u2019re now at the point where no further development on AI capabilities (or anything else interesting) will ever need to be built on a worse cognitive substrate than what we currently have. This \u201cwhat you see today is the floor, not the ceiling\u201d is one of the things I think best understood by insiders and worst understood by policymakers and the broader world.<\/p>\n<p>Every future Starcraft AI has already read The Art of War in the original Chinese, unless its designers assess that makes it worse at defending against Zerg rushes.<\/p>\n<p><strong>Jack:\u00a0<\/strong>Yes, something we say often to policymakers at Anthropic is \u201cThis is the worst it will ever be!\u201d and it\u2019s really hard to convey to them just how important that ends up being. The other thing which is unintuitive is how quickly capabilities improve\u2014one current example is how many people are currently playing with Opus 4.5 in Claude Code and saying some variation of \u201cWow, this stuff is so much better than it was before.\u201d If you last played with LLMs in November, you\u2019re now wildly miscalibrated about the frontier.<\/p>\n<p><strong>Michael Burry:<\/strong>\u00a0From my perspective, in 2017, AI wasn\u2019t LLMs. AI was artificial general intelligence (AGI). I think people didn\u2019t think of LLMs as being AI back then. I mean, I grew up on science fiction books, and they predict a lot, but none of them pictured \u201cAI\u201d as something like a search-intensive chatbot.<\/p>\n<p>For Attention Is All You Need and its introduction of the transformer model, these were all Google engineers using Tensor, and back in the mid-teens, AI was not a foreign concept. Neural networks, machine learning startups were common, and AI was mentioned a lot in meetings. Google had the large language model already, but it was internal. One of the biggest surprises to me is that Google wasn\u2019t leading this the whole way given its Search and Android dominance, both with the chips and the software.<\/p>\n<p>Another surprise is that I thought application-specific integrated circuits (ASICs) would be adopted far earlier, and small language models (SLMs) would be adopted far earlier. That Nvidia has continued to be the chip for AI this far into inference is shocking.<\/p>\n<p>The biggest surprise to me is that ChatGPT kicked off the spending boom. The use cases for ChatGPT have generally been limited from the start\u2014search, students cheating, and coding. Now there are better LLMs for coding. But it was a chatbot that kicked off trillions in spending.<\/p>\n<p>Speaking of that spending, I thought one of the best moments of Dwarkesh\u2019s interview with Satya Nadella was the acknowledgement that all the big software companies are hardware companies now, capital-intensive, and I am not sure the analysts following them even know what maintenance capital expenditure is.<\/p>\n<p><strong>Dwarkesh Patel<\/strong>: Great points. It is quite surprising how non-durable leads in AI so far have been. Of course, in 2017, Google was far and away ahead. A couple years ago, OpenAI seemed way ahead of the pack. There is some force (potentially talent poaching, rumor mills, or reverse engineering) which has so far neutralized any runaway advantages a single lab might have had. Instead, the big three keep rotating around the podium every few months. I\u2019m curious whether \u201crecursive superintelligence\u201d would actually be able to change this, or whether we should just have a prior and strong competition forever.<\/p>\n<p><strong>Jack:<\/strong>\u00a0On recursion, all the frontier labs are speeding up their own developers using AI tools, but it\u2019s not very neat. It seems to have the property of \u201cyou\u2019re only as fast as the weakest link in the chain\u201d\u2014for instance, if you can now produce 10x more code but your code review tools have only improved by 2x, you aren\u2019t seeing a massive speedup. A big open question is whether it\u2019ll be possible to fully close this loop, in which case you might see some kind of compounding R&amp;D advantage.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!wW9Q!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png 1456w\" alt=\"\" width=\"250\" height=\"9.166666666666666\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:250,&quot;bytes&quot;:21903,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F011afab6-81ac-470c-a898-7920562ff8fc_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Do AI tools actually improve productivity?<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7do-ai-tools-actually-improve-productivity\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/do-ai-tools-actually-improve-productivity\"><\/button><\/div>\n<\/div>\n<p><strong>Dwarkesh<\/strong>: The million-dollar question is whether the\u00a0<a href=\"https:\/\/metr.org\/blog\/2025-07-10-early-2025-ai-experienced-os-dev-study\/\" rel=\"\">METR productivity study<\/a>\u00a0(which shows that developers working in codebases they understood well had a roughly 20% decrease on merging pull requests from coding tools) or human equivalent time horizons of self-contained coding tasks (which are already in the many-hours range and doubling every four to seven months) is a better measure of how much speedup researchers and engineers at labs are actually getting. I don\u2019t have direct experience here, but I\u2019d guess it\u2019s closer to the former, given that there isn\u2019t a great feedback verification loop and the criteria are open-ended (maintainability, taste, etc.).<\/p>\n<p><strong>Jack<\/strong>: Agreed, this is a crucial question\u2014and the data is conflicting and sparse. For example, we did a survey of developers at Anthropic and saw a self-reported 50% productivity boost from the 60% of those surveyed who used Claude in their work. But then things like the METR study would seem to contradict that. We need better data and, specifically, instrumentation for developers inside and outside the AI labs to see what is going on. To zoom out a bit, the massive and unprecedented uptake of coding tools does suggest people are seeing some major subjective benefit from using them\u2014it would be very unintuitive if an increasing percentage of developers were enthusiastically making themselves less productive.<\/p>\n<p><strong>Dwarkesh<\/strong>: Not to rabbit hole on this, but the self-reported productivity being way higher than\u2014and potentially even in the opposite direction of\u2014true productivity is predicted by the METR study.<\/p>\n<p><strong>Jack:<\/strong>\u00a0Yes, agreed. Without disclosing too much, we\u2019re thinking specifically about instrumentation and figuring out what is \u201ctrue\u201d here, because what people self-report may end up being different from reality. Hopefully we\u2019ll have some research outputs on this in 2026!<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!YhCp!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png 1456w\" alt=\"\" width=\"254\" height=\"9.313333333333333\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/be57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:254,&quot;bytes&quot;:27547,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fbe57d780-bdd1-48a4-b2e8-66d7a705f77d_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Which company is winning?<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7which-company-is-winning\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/which-company-is-winning\"><\/button><\/div>\n<\/div>\n<p><strong>Michael:<\/strong>\u00a0Do you think the podium will keep rotating? From what I\u2019m hearing, Google is winning among developers from both AWS and Microsoft. And it seems the \u201csearch inertia\u201d has been purged at the company.<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div>\n<div class=\"pencraft pc-display-flex pc-width-36 pc-height-36 pc-justifyContent-center pc-alignItems-center pc-position-relative pc-reset bg-secondary-UUD3_J flex-auto-j3S2WA animate-XFJxE4 outline-detail-vcQLyr pc-borderRadius-full overflow-hidden-WdpwT6 sizing-border-box-DggLA4 pressable-sm-YIJFKJ showFocus-sk_vEm container-TAtrWj interactive-UkK0V6 avatar-u8q6xB overlap-q75iOo\" tabindex=\"0\">\n<div class=\"pencraft pc-display-flex pc-width-36 pc-height-36 pc-justifyContent-center pc-alignItems-center pc-position-relative pc-reset bg-secondary-UUD3_J flex-auto-j3S2WA outline-detail-vcQLyr pc-borderRadius-full overflow-hidden-WdpwT6 sizing-border-box-DggLA4 container-TAtrWj\" title=\"Patrick McKenzie\">\n<p><strong>Dwarkesh:<\/strong>\u00a0Interesting. Seems more competitive than ever to me. The Twitter vibes are great for both Opus 4.5 and Gemini 3.5 Pro. No opinion on which company will win, but it definitely doesn\u2019t seem settled.<\/p>\n<p><strong>Jack:<\/strong>\u00a0Seems more competitive than ever to me, also!<\/p>\n<p><strong>Dwarkesh<\/strong><em><strong>:<\/strong>\u00a0<\/em>Curious on people\u2019s take on this: how many failed training runs\/duds of models could Anthropic or OpenAI or Google survive? Given the constant need to fundraise (side question: for what exactly?) on the back of revenue and vibes.<\/p>\n<p><strong>Michael:\u00a0<\/strong>The secret to Google search was always how cheap it was, so that informational searches that were not monetizable (and make up 80% or more) did not pile up as losses for the company. I think this is the fundamental problem with generative AI and LLMs today\u2014they are so expensive. It is hard to understand what the profit model is, or what any one model\u2019s competitive advantage will be\u2014will it be able to charge more, or run cheaper?<\/p>\n<p>Perhaps Google will be the one that can run cheapest in the end, and will win the commodity economy that this becomes.<\/p>\n<p><strong>Dwarkesh:\u00a0<\/strong>Great point. Especially if you think many\/most of the gains over the last year have been the result of inference scaling, which requires an exponential increase in variable cost to sustain.<\/p>\n<p>Ultimately, the price of something is upper-bounded by the cost to replace it. So foundation model companies can only charge high margins (which they currently seem to be) if progress continues to be fast and, to Jack\u2019s point, becomes eventually self-compounding.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!UDae!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png 1456w\" alt=\"\" width=\"252\" height=\"9.24\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/ca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:252,&quot;bytes&quot;:21903,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fca4f0b9c-e8a8-437d-899f-d66afac45f3f_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Why hasn\u2019t AI stolen all our jobs?<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7why-hasnt-ai-stolen-all-our-jobs\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/why-hasnt-ai-stolen-all-our-jobs\"><\/button><\/div>\n<\/div>\n<p><strong>Dwarkesh:\u00a0<\/strong>It\u2019s really surprising how much is involved in automating jobs and doing what people do. We\u2019ve just marched through so many common-sense definitions of AGI\u2014the Turing test is not even worth commenting on anymore; we have models that can reason and solve difficult, open-ended coding and math problems. If you showed me Gemini 3 or Claude 4.5 Opus in 2017, I would have thought it would put half of white-collar workers out of their jobs. And yet the labor market impact of AI requires spreadsheet microscopes to see, if there is indeed any.<\/p>\n<p>I would have also found the scale and speed of private investment in AI surprising. Even as of a couple years ago, people were talking about how AGI would have to be a government, Manhattan-style project, because that\u2019s the only way you can turn the economy into a compute and data engine. And so far, it seems like good ol\u2019-fashioned markets can totally sustain multiple GDP percentages of investment in AI.<\/p>\n<p><strong>Michael:\u00a0<\/strong>Good point, Dwarkesh, re: the Turing test\u2014that was definitely the discussion for a good while. In the past, for instance, during the Industrial Revolution and the Services Revolution, the impacts on labor were so great that mandatory schooling was instituted and expanded to keep young people out of the labor pool for longer. We certainly have not seen anything like that.<\/p>\n<p><strong>Jack:\u00a0<\/strong>Yes, Dwarkesh and Michael, a truism for the AI community is they keep on building supposedly hard tasks that will measure true intelligence, then AI systems blow past these benchmarks, and you find yourself with something which is superficially very capable but still likely makes errors which any human would recognize as bizarre or unintuitive. One recent example is LLMs were scored \u201csuperhuman\u201d on a range of supposedly hard cognitive tasks, according to benchmarks, but were incapable of self-correcting when they made errors. This is now improving, but it\u2019s an illustration of how unintuitive the\u00a0<em>weaknesses<\/em>\u00a0of AI models can be. And you often discover them alongside massive improvements.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0I wonder if the inverse is also true\u2014humans reliably make classes of errors that an LLM would recognize as bizarre or unintuitive, lol. Are LLMs actually more jagged than people, or just jagged in a different way?<\/p>\n<p><strong>Patrick:<\/strong>\u00a0Stealing an observation from Dwarkesh\u2019s book, a mundane way in which LLMs are superhuman is that they speak more languages than any human\u2014by a degree that confounds the imagination\u2014and with greater facility than almost all polyglots ever achieve. Incredibly, this happens by accident, even without labs specifically training for it. One of the most dumbfounding demos I\u2019ve ever seen was an LLM trained on a corpus intended to include only English documents yet able to translate a CNN news article to Japanese at roughly the standard of a professional translator. From that perspective, an LLM that hadn\u2019t had politeness trained into it might say, \u201cHumans are bizarre and spiky; look how many of them don\u2019t speak Japanese despite living in a world with books.\u201d<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!qdVD!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png 1456w\" alt=\"\" width=\"248\" height=\"9.093333333333334\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/41577969-d7d3-4600-b027-aad59e401af0_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:248,&quot;bytes&quot;:27547,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F41577969-d7d3-4600-b027-aad59e401af0_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Why many workers aren\u2019t using AI (yet)<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7why-many-workers-arent-using-ai-yet\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/why-many-workers-arent-using-ai-yet\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>Coding seems to be the leading edge for widespread industrial adoption of AI, with meteoric revenue growth for companies like Cursor, technologists with taste taking to tools like Claude Code and OpenAI Codex, and the vibes around \u201cvibe coding.\u201d This causes a pronounced asymmetry of enthusiasm for AI, since most people are not coders. What sector changes next? What change would make this visible in earnings, employment, or prices rather than demos?<\/p>\n<p><strong>Jack:<\/strong>\u00a0Coding has a nice property of being relatively \u201cclosed loop\u201d\u2014you use an LLM to generate or tweak code, which you then validate and push into production. It really took the arrival of a broader set of tools for LLMs to take on this \u201cclosed loop\u201d property in domains outside of coding\u2014for instance, the creation of web search capabilities and the arrival of stuff like Model Context Protocol (MCP) connectivity has allowed LLMs to massively expand their \u201cclosed loop\u201d utility beyond coding.<\/p>\n<p>As an example, I\u2019ve been doing research on the cost curves of various things recently (e.g. dollars of mass to orbit, or dollars per watt from solar), and it\u2019s the kind of thing you could research with LLMs prior to these tools, but it had immense amounts of friction and forced you to go back and forth between the LLM and everything else. Now that friction has been taken away, you\u2019re seeing greater uptake. Therefore, I expect we\u2019re about to see what happened to coders happen to knowledge workers more broadly\u2014and this feels like it should show up in a diffuse but broad way across areas like science research, the law, academia, consultancy, and other domains.<\/p>\n<p><strong>Michael:<\/strong>\u00a0At the end of the day, AI has to be purchased by someone. Someone out there pays for a good or service. That is GDP. And that spending grows at GDP rates, 2% to 4%\u2014with perhaps some uplift for companies with pricing power, which doesn\u2019t seem likely in the future of AI.<\/p>\n<p>Economies don\u2019t have magically expanding pies. They have arithmetically constrained pies. Nothing fancy. The entire software pie\u2014SaaS software running all kinds of corporate and creative functions\u2014is less than $1 trillion. This is why I keep coming back to the infrastructure-to-application ratio\u2014Nvidia selling $400 billion of chips for less than $100 billion in end-user AI product revenue.<\/p>\n<p>AI has to grow productivity and create new categories of spending that don\u2019t cannibalize other categories. This is all very hard to do. Will AI grow productivity enough? That is debatable. The capital expenditure spending cycle is faith-based and FOMO-based. No one is pointing to numbers that work. Yet.<\/p>\n<p>There is a much simpler narrative out there that AI will make everything so much better that spending will explode. It is more likely to take spending in. If AI replaces a $500 seat license with a $50 one, that is great for productivity but is deflationary for productivity spend. And that productivity gained is likely to be shared by all competitors.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0Michael, isn\u2019t this the \u201clump of labor\u201d fallacy? That there\u2019s a fixed amount of software to be written, and that we can upper bound the impact of AI on software by that?<\/p>\n<p><strong>Michael:<\/strong>\u00a0New markets do emerge, but they develop slower than acutely incentivized futurists believe. This has always been true. Demographics and total addressable market (TAM) are too often marketing gimmicks not grounded in reality. China\u2019s population is shrinking. Europe\u2019s is shrinking. The U.S. is the only major Western country growing, and that is because of immigration, but that has been politicized as well. FOMO is a hell of a drug. You look at some comments from Apple or Microsoft, and it seems they realize that.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0As a sidenote, it\u2019s funny that AI comes around just when we needed it to save us from the demographic sinkhole our economies would have otherwise been collapsing into over the next few decades.<\/p>\n<p><strong>Michael:<\/strong>\u00a0Yes, Dwarkesh. In medicine, where there are real shortages, there is no hope for human doctors to be numerous enough in the future. Good medical care has to become cheaper, and technology is needed to extend the reach and coverage of real medical expertise.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!ub6g!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png 1456w\" alt=\"\" width=\"250\" height=\"9.166666666666666\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/c11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:250,&quot;bytes&quot;:27547,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc11671e1-3fb7-4a30-af02-12bed745bf28_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Are engineers going to be out of work?<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7are-engineers-going-to-be-out-of-work\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/are-engineers-going-to-be-out-of-work\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>AppAmaGooFaceSoft [Apple, Amazon, Google, Facebook, Microsoft] presently employ on the order of 500,000 engineers. Put a number on that for 2035 and explain your thinking\u2014or argue that headcount is the wrong variable, and name the balance-sheet or productivity metric you\u2019d track instead.<\/p>\n<p><strong>Michael:<\/strong>\u00a0From 2000, Microsoft added 18,000 employees as the stock went nowhere for 14 years. In fact headcount barely moved at Cisco, Dell, and Intel, despite big stock crashes. So I think it is the wrong variable. It tells us nothing about value creation, especially for cash-rich companies and companies in monopoly, duopoly, or oligopoly situations. I think it will be lower, or not much higher, because I think we are headed for a very long downturn. The hyperscalers laid off employees in 2022 when their stocks fell, and hired most of them back when their stocks rose. This is over a couple years.<\/p>\n<p>I would track shareholder-based compensation\u2019s (SBC) all-in cost before saying productivity is making a record run. At Nvidia, I calculated that roughly half of its profit is eliminated by compensation linked to stock that transferred value to those employees. Well, if half the employees are now worth $25 million, then what is the productivity gain on those employees? Not to mention, margins with accurate SBC costs would be much lower.<\/p>\n<p>The measure to beat all measures is return on invested capital (ROIC), and ROIC was very high at these software companies. Now that they are becoming capital-intensive hardware companies, ROIC is sure to fall, and this will pressure shares in the long run. Nothing predicts long-term trends in the markets like the direction of ROIC\u2014up or down, and at what speed. ROIC is heading down really fast at these companies now, and that will be true through 2035.<\/p>\n<p>In his interview with Dwarkesh, Satya Nadella said that he\u2019s looking for software to maintain ROIC through a heavy capital expenditure cycle. I cannot see it, and even to Nadella, it sounds like only a hope.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0Naive question, but why is ROIC more important than absolute returns? I\u2019d rather own a big business that can keep growing and growing (albeit as a smaller fraction of investment) than a small business that basically prints cash but is upper-bounded in size.<\/p>\n<p>So many of the big tech companies have lower ROIC, but their addressable market over the next two decades has increased from ads ($400 billion in revenue a year) to labor (tens of trillions in revenue a year).<\/p>\n<p><strong>Michael:\u00a0<\/strong>Return on invested capital\u2014and, more importantly, its trend\u2014is a measure of how much opportunity is left in the company. From my perspective, I have seen many roll-ups where companies got bigger primarily through buying other companies with debt. This brings ROIC into cold focus. If the return on those purchases ends up being less than the cost of debt, the company fails in a manner akin to WorldCom.<\/p>\n<p>At some point, this spending on the AI buildout has to have a return on investment higher than the cost of that investment, or there is just no economic value added. If a company is bigger because it borrowed a lot more or spent all its cash flow on something low-return, that is not an attractive quality to an investor, and the multiple will fall. There are many non-tech companies printing cash with no real prospects for growth beyond buying it, and they trade at about 8x earnings.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!GQd6!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png 1456w\" alt=\"\" width=\"252\" height=\"9.24\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/f848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:252,&quot;bytes&quot;:27547,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff848b030-e39c-4b22-bfcd-4ecc5774ada2_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Where is the money going?<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7where-is-the-money-going\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/where-is-the-money-going\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>From a capital-cycle perspective, where do you think we are in the AI build-out\u2014early over-investment, mid-cycle shakeout, or something structurally different from past tech booms? What would change your mind?<\/p>\n<p><strong>Michael:<\/strong>\u00a0I do see it as different from prior booms, except in that the capital spending is remarkably short-lived. Chips cycle every year now; data centers of today won\u2019t handle the chips of a few years from now. One could almost argue that a lot of this should be expensed, not capitalized. Or depreciated over two, three, four years.<\/p>\n<p>Another big difference is that private credit is financing this boom as much as or more than public capital markets. This private credit is a murky area, but the duration mismatch stands out\u2014much of this is being securitized as if the assets last two decades, while giving the hyperscaler outs every four to five years. This is just asking for trouble. Stranded assets.<\/p>\n<p>Of course, the spenders are the richest companies on earth, but whether from cash or capital markets, big spending is big spending, and the planned spending overwhelms the balance sheets and cash flow of even today\u2019s massive hyperscalers.<\/p>\n<p>Also, construction in progress (CIP) is now an accounting trick that I believe is already being used. Capital equipment not yet \u201cplaced into service\u201d does not start depreciating or counting against income. And it can be there forever. I imagine a lot of stranded assets will be hidden in CIP to protect income, and I think we are already seeing that potential.<\/p>\n<p>In Dwarkesh\u2019s interview, Nadella said he backed off some projects and slowed down the buildout because he did not want to get stuck with four or five years of depreciation on one generation of chips. That is a bit of a smoking-gun statement.<\/p>\n<p>We are mid-cycle now\u2014past the point where stocks will reward investors for further buildout, and getting into the period where the true costs and the lack of revenue will start to show themselves.<\/p>\n<p>In past cycles, stocks and capital markets peaked about halfway through, and the rest of the capital expenditure occurred as a progressively pessimistic, or realistic, view descended on the assets of concern.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0I think this is so downstream of whether AI continues to improve at a rapid clip. If you could actually run the most productive human minds on a B200 (Nvidia\u2019s B200 GPU), then we\u2019re obviously massively underinvesting. I think the revenues from the application layer so far are less informative than raw predictions about progress in AI capabilities themselves.<\/p>\n<p><strong>Jack:<\/strong> Agreed on this\u2014the amount of progress in capabilities in recent years has been deeply surprising and has led to massive growth in utilization of AI. In the future, there could be further step-change increases in model capabilities, and these could have extremely significant effects on the economy.<\/p>\n<h2 class=\"header-anchor-post\">What the market gets wrong<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7what-the-market-gets-wrong\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/what-the-market-gets-wrong\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>Where does value accrue in the AI supply chain? How is this different from recent or historical technological advances? Who do you think the market is most wrong about right now?<\/p>\n<p><strong>Michael:<\/strong>\u00a0Well, value accrues, historically, in all industries, to those with a durable competitive advantage manifesting as either pricing power or an untouchable cost or distribution advantage.<\/p>\n<p>It is not clear that the spending here will lead to that.<\/p>\n<p>Warren Buffett owned a department store in the late 1960s. When the department store across the street put an escalator in, he had to, too. In the end, neither benefited from that expensive project. No durable margin improvement or cost improvement, and both were in the same exact spot. That is how most AI implementation will play out.<\/p>\n<p>This is why trillions of dollars of spending with no clear path to utilization by the real economy is so concerning. Most will not benefit, because their competitors will benefit to the same extent, and neither will have a competitive advantage because of it.<\/p>\n<p>I think the market is most wrong about the two poster children for AI: Nvidia and Palantir. These are two of the luckiest companies. They adapted well, but they are lucky because when this all started, neither had designed a product for AI. But they are getting used as such.<\/p>\n<p>Nvidia\u2019s advantage is not durable. SLMs and ASICs are the future for most use cases in AI. They will be backward-compatible with CUDA [Nvidia\u2019s parallel computing platform and programming model] if at all necessary. Nvidia is the power-hungry, dirty solution holding the fort until the competition comes in with a completely different approach.<\/p>\n<p>Palantir\u2019s CEO compared me to [bad actors] because of an imagined billion-dollar bet against his company. That is not a confident CEO. He\u2019s marketing as hard as he can to keep this going, but it will slip. There are virtually no earnings after stock-based compensation.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0It remains to be seen whether AI labs can achieve a durable competitive advantage from recursive self-improvement-type effects. But if Jack is right and AI developers should already be seeing huge productivity gains, then why are things more competitive now than ever? Either this kind of internal \u201cdogfooding\u201d cannot sustain a competitive advantage or the productivity gains from AI are smaller than they appear.<\/p>\n<p>If it does turn out to be the case that (1) nobody across the AI stack can make crazy profits and (2) AI still turns out to be a big deal, then obviously the value accrues to the customer. Which, to my ears, sounds great.<\/p>\n<p><strong>Michael:<\/strong>\u00a0In the escalator example, the only value accrued to the customer. This is how it always goes if no monopoly rents can be charged by the producers or providers.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!9CAl!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png 1456w\" alt=\"\" width=\"250\" height=\"9.166666666666666\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:250,&quot;bytes&quot;:21903,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F2146cab4-a6ab-40a5-8943-5d42b436a170_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">What would change their minds<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7what-would-change-their-minds\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/what-would-change-their-minds\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>What 2026 headline\u2014technological or financial\u2014would surprise you and cause you to recalibrate your overall views on AI progress or valuation? Retrospectively, what was the biggest surprise or recalibration to date?<\/p>\n<p><strong>Michael:<\/strong>\u00a0The biggest surprise that would cause me to recalibrate would be autonomous AI agents displacing millions of jobs at the biggest companies. This would shock me but would not necessarily help me understand where the durable advantage is. That Buffett escalator example again.<\/p>\n<p>Another would be application-layer revenue hitting $500 billion or more because of a proliferation of killer apps.<\/p>\n<p>Right now, we will see one of two things: either Nvidia\u2019s chips last five to six years and people therefore need less of them, or they last two to three years and the hyperscalers\u2019 earnings will collapse and private credit will get destroyed.<\/p>\n<p>Retrospectively, the biggest surprises to date are:<\/p>\n<ol>\n<li>Google wasn\u2019t leading the whole way\u2014the eight authors of Attention Is All You Need were all Google employees; they had Search, Gmail, Android, and even the LLM and the chips, but they fumbled it and gave an opening to competitors with far less going for them. Google playing catch-up to a startup in AI: that is mind-blowing.<\/li>\n<li>ChatGPT\u2014a chatbot kicked off a multi-trillion-dollar infrastructure race. It\u2019s like someone built a prototype robot and every business in the world started investing for a robot future.<\/li>\n<li>Nvidia has maintained dominance this far into the inference era. I expected ASICs and SLMs to be dominant by now, and that we would have moved well beyond prompt engineering. Perhaps the Nvidia infatuation actually held players back. Or anticompetitive behavior at Nvidia did.<\/li>\n<\/ol>\n<p><strong>Dwarkesh:<\/strong>\u00a0Biggest surprises to me would be:<\/p>\n<ul>\n<li>2026 cumulative AI lab revenues are below $40 billion or above $100 billion. It would imply that things have significantly sped up or slowed down compared to what I would have expected.<\/li>\n<li>Continual learning is solved. Not in the way that GPT-3 \u201csolved\u201d in-context learning, but in the way that GPT-5.2 is actually almost human-like in its ability to understand from context. If working with a model is like replicating a skilled employee that\u2019s been working with you for six months rather than getting their labor on the first hour of their job, I think that constitutes a huge unlock in AI capabilities.<\/li>\n<li>I think the timelines to AGI have significantly narrowed since 2020. At that point, you could assign some probability to scaling GPT-3 up by a thousand times and reaching AGI, and some probability that we were completely on the wrong track and would have to wait until the end of the century. If progress breaks from the trend line and points to true human-substitutable intelligences emerging over the next 5 to 20 years, that would be the biggest surprise to me.<\/li>\n<\/ul>\n<p><strong>Jack:<\/strong>\u00a0If \u201cscaling hits a wall,\u201d that would be truly surprising and would have very significant implications for both the underlying research paradigm as well as the broader AI economy. Obviously, the infrastructure buildout, including the immense investments in facilities for training future AI models, suggests that people are betting otherwise.<\/p>\n<p>One other thing I\u2019d find surprising is if there was a combination of a technological breakthrough that improved the efficiency of distributed training, and some set of actors that put together enough computers to train a very powerful system. If this happened, it would suggest you can not only have open-weight models but also a form of open model development where it doesn\u2019t take a vast singular entity (e.g. a company) to train a frontier model. This would alter the political economy of AI and have extremely non-trivial policy implications, especially around the proliferation of frontier capabilities.\u00a0<a href=\"https:\/\/epoch.ai\/gradient-updates\/how-far-can-decentralized-training-over-the-internet-scale\" rel=\"\">Epoch has a nice analysis of distributed training<\/a>\u00a0that people may want to refer to.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!SNf8!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png 1456w\" alt=\"\" width=\"248\" height=\"9.093333333333334\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/cc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:248,&quot;bytes&quot;:27547,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fcc1a7cf1-a88e-4169-b9ad-c94605bb28a7_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">How they actually use LLMs<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7how-they-actually-use-llms\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/how-they-actually-use-llms\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>What was your last professionally significant interaction with an LLM? File off the serial numbers, if need be. How did you relate to the LLM in that interaction?<\/p>\n<p><strong>Michael:<\/strong>\u00a0I use Claude to produce all my charts and tables now. I will find the source material, but I spend no time on creating or designing a professional table, chart, or visual. I still don\u2019t trust the numbers and need to check them, but that creative aspect is in the past for me. Relatedly, I will use Claude in particular to find source material, as so much source material these days is not simply at the SEC or in a mainstream report.<\/p>\n<p><strong>Patrick:<\/strong>\u00a0I think people outside of finance do not understand how many billions of dollars have been spent having some of the best-paid, best-educated people in the world employed as Microsoft PowerPoint and Excel specialists. There is still value in that, for the time being, and perhaps the shibboleth value of pivot tables and VLOOKUP() will endure longer than they do, but my presentation at the Bank of England also used LLMs for all the charts. It feels almost bizarre that we once asked humans to spend hours carefully adjusting them.<\/p>\n<p><strong>Dwarkesh:<\/strong>\u00a0They are now my personal one-on-one tutors. I\u2019ve actually tried to hire human tutors for different subjects I\u2019m trying to prep for, and I\u2019ve found the latency and speed of LLMs to just make for a qualitatively much better experience. I\u2019m getting the digital equivalent of people being willing to pay huge premiums for Waymo over Uber. It inclines me to think that the human premium for many jobs will not only not be high, but in fact be negative.<\/p>\n<p><strong>Michael:\u00a0<\/strong>On that point, many point to trade careers as an AI-proof choice. Given how much I can now do in electrical work and other areas around the house just with Claude at my side, I am not so sure. If I\u2019m middle class and am facing an $800 plumber or electrician call, I might just use Claude. I love that I can take a picture and figure out everything I need to do to fix it.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!CDEc!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png 1456w\" alt=\"\" width=\"250\" height=\"9.166666666666666\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:44,&quot;width&quot;:1200,&quot;resizeWidth&quot;:250,&quot;bytes&quot;:21903,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F926b9a8b-a553-490d-a48f-800b55cdc165_1200x44.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h2 class=\"header-anchor-post\">Risk, power, and how to shape the future<\/h2>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7risk-power-and-how-to-shape-the-future\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/risk-power-and-how-to-shape-the-future\"><\/button><\/div>\n<\/div>\n<p><strong>Patrick:\u00a0<\/strong>The spectrum of views on AI risk among relatively informed people runs the gamut from \u201cit could cause some unpleasantness on social media\u201d to \u201cit would be a shame if China beat the U.S. on a very useful emerging technology with potential military applications\u201d to \u201cdownside risks include the literal end of everything dear to humanity.\u201d What most keeps you up at night? Separately, if you had five minutes with senior policymakers, what new allocation of attention and resources would you suggest?<\/p>\n<p><strong>Jack:<\/strong>\u00a0The main thing I worry about is whether people succeed at \u201cbuilding AI that builds AI\u201d\u2014fully closing the loop on AI R&amp;D (sometimes called recursively self-improving AI). To be clear, I assign essentially zero likelihood to there being recursively self-improving AI systems on the planet in January 2026, but we do see extremely early signs of AI getting better at doing components of AI research, ranging from kernel development to autonomously fine-tuning open-weight models.<\/p>\n<p>If this stuff keeps getting better and you end up building an AI system that can build itself, then AI development would speed up very dramatically and probably become harder for people to understand. This would pose a range of significant policy issues and would also likely lead to an unprecedented step change in the economic activity of the world, attributable to AI systems.<\/p>\n<p>Put another way, if I had five minutes with a policymaker, I\u2019d basically say to them, \u201cSelf-improving AI sounds like science fiction, but there\u2019s nothing in the technology that says it\u2019s impossible, and if it happened it\u2019d be a huge deal and you should pay attention to it. You should demand transparency from AI companies about exactly what they\u2019re seeing here, and make sure you have third parties you trust who can test out AI systems for these properties.\u201d<\/p>\n<p><strong>Michael:<\/strong>\u00a0Jack, I imagine you have policymakers\u2019 ears, and I hope they listen.<\/p>\n<p>AI as it stands right now does not worry me much at all, as far as risks to humanity. I think chatbots have the potential to make people dumber\u2014doctors that use them too much start to forget their actual innate medical knowledge. That is not good, but not catastrophic.<\/p>\n<p>The catastrophic worries involving AGI or artificial superintelligence (ASI) are not too worrying to me. I grew up in the Cold War, and the world could blow up at any minute. We had school drills for that. I played soccer with helicopters dropping Malathion over all of us. And I saw Terminator over 30 years ago. Red Dawn seemed possible. I figure humans will adapt.<\/p>\n<p>If I had the ear of senior policymakers, I would ask them to take a trillion dollars (since trillions just get thrown around like millions now) and bypass all the protests and regulations and dot the whole country with small nuclear reactors, while also building a brand-new, state-of-the-art grid for everyone. Do this as soon as possible and secure it all from attack with the latest physical and cybersecurity; maybe even create a special Nuclear Defense Force that protects each facility, funded federally.<\/p>\n<p>This is the only hope of getting enough power to keep up with China, and it is the only hope we have as a country to grow enough to ultimately pay off our debt and guarantee long-term security, by not letting power be a limiting factor on our innovation.<\/p>\n<p><strong>Jack:<\/strong>\u00a0Strongly agree on the energy part (though we might have a different subjective worry level about the other stuff!). AI will play a meaningful role in the economy, and it fundamentally depends on underlying infrastructure to deliver it efficiently and cheaply to businesses and consumers\u2014analogous to how, in the past, countries have decided to do large-scale electrification, road building, sewer building, etc. (massive capital expenditure projects!). We need to urgently do the same for energy.<\/p>\n<p>I also think large-scale AI data centers are very useful test customers for novel energy technologies, and am particularly excited to see the fusion (pun intended!) of AI energy demand and nuclear technologies in the future. More broadly, I think \u201ceconomic security is national security,\u201d so making sure we have the infrastructure in place to build out the AI economy will have knock-on positive effects on our industrial base and overall robustness.<\/p>\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><img decoding=\"async\" class=\"sizing-normal\" src=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png\" sizes=\"100vw\" srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!mTsI!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png 1456w\" alt=\"\" width=\"252\" height=\"69.25935483870968\" data-attrs=\"{&quot;src&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/36660af9-802c-4955-a466-def2860fb017_775x213.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:213,&quot;width&quot;:775,&quot;resizeWidth&quot;:252,&quot;bytes&quot;:10206,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image\/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https:\/\/post.substack.com\/i\/183999144?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F36660af9-802c-4955-a466-def2860fb017_775x213.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}\" \/><\/picture>\n<div><\/div>\n<\/div>\n<\/figure>\n<\/div>\n<h4 class=\"header-anchor-post\">More on the participants:<\/h4>\n<div class=\"pencraft pc-display-flex pc-alignItems-center pc-position-absolute pc-reset header-anchor-parent\">\n<div class=\"pencraft pc-display-contents pc-reset pubTheme-yiXxQA\">\n<div id=\"\u00a7more-on-the-participants\" class=\"pencraft pc-reset header-anchor offset-top\"><\/div>\n<p><button class=\"pencraft pc-reset pencraft iconButton-mq_Et5 iconButtonBase-dJGHgN buttonBase-GK1x3M buttonStyle-r7yGCK size_sm-G3LciD priority_secondary-S63h9o\" tabindex=\"0\" type=\"button\" aria-label=\"Link\" data-href=\"https:\/\/post.substack.com\/i\/183999144\/more-on-the-participants\"><\/button><\/div>\n<\/div>\n<ul>\n<li><span data-state=\"closed\"><a class=\"mention-pnpTE1\" href=\"https:\/\/open.substack.com\/users\/287900483-michael-burry?utm_source=mentions\" target=\"_blank\" rel=\"noopener\" data-attrs=\"{&quot;name&quot;:&quot;Michael Burry&quot;,&quot;id&quot;:287900483,&quot;type&quot;:&quot;user&quot;,&quot;url&quot;:null,&quot;photo_url&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/fcda9c0b-aa9f-480b-bfa3-294c36278118_904x908.png&quot;,&quot;uuid&quot;:&quot;a407107f-4683-40ad-91e1-05e201798308&quot;}\" data-component-name=\"MentionUser\">Michael Burry<\/a><\/span><strong>\u00a0<\/strong>is a former hedge fund manager and writer who publishes investment analysis and market commentary on his Substack,\u00a0<span data-state=\"closed\"><a class=\"mention-pnpTE1\" target=\"_blank\" rel=\"noopener\" data-attrs=\"{&quot;name&quot;:&quot;Cassandra Unchained&quot;,&quot;id&quot;:6819723,&quot;type&quot;:&quot;pub&quot;,&quot;url&quot;:&quot;&quot;,&quot;uuid&quot;:&quot;f7a7afb9-61bd-4355-857a-09f4c4caf39e&quot;}\" data-component-name=\"MentionPub\">Cassandra Unchained<\/a><\/span>. He is best known for predicting the subprime mortgage crisis, as depicted in The Big Short, and has more recently voiced skepticism about AI-driven market exuberance.<\/li>\n<li><span data-state=\"closed\"><a class=\"mention-pnpTE1\" href=\"https:\/\/open.substack.com\/users\/44606-jack-clark?utm_source=mentions\" target=\"_blank\" rel=\"noopener\" data-attrs=\"{&quot;name&quot;:&quot;Jack Clark&quot;,&quot;id&quot;:44606,&quot;type&quot;:&quot;user&quot;,&quot;url&quot;:null,&quot;photo_url&quot;:&quot;https:\/\/substack-post-media.s3.amazonaws.com\/public\/images\/8cc1c9c9-fc87-4eeb-ad15-7dc989b77553_528x504.png&quot;,&quot;uuid&quot;:&quot;ec8161c5-7567-461c-9c84-7bdd26221c21&quot;}\" data-component-name=\"MentionUser\">Jack Clark<\/a><\/span>\u00a0is the co-founder and head of policy at Anthropic, where he works on AI safety, governance, and the societal implications of frontier models. He also writes\u00a0<a href=\"https:\/\/importai.substack.com\/?utm_source=mention&amp;utm_content=writes\" rel=\"\">Import AI<\/a>, a long-running newsletter analyzing advances in artificial intelligence, state power, and technological risk.<\/li>\n<li><span data-state=\"closed\"><a class=\"mention-pnpTE1\" href=\"https:\/\/open.substack.com\/users\/4281466-dwarkesh-patel?utm_source=mentions\" target=\"_blank\" rel=\"noopener\" data-attrs=\"{&quot;name&quot;:&quot;Dwarkesh Patel&quot;,&quot;id&quot;:4281466,&quot;type&quot;:&quot;user&quot;,&quot;url&quot;:null,&quot;photo_url&quot;:&quot;https:\/\/substackcdn.com\/image\/fetch\/$s_!5eJb!,f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb715ffd1-f7d7-4755-af88-c48efe647f5b_400x400.jpeg&quot;,&quot;uuid&quot;:&quot;561bea09-ff39-4941-8e6f-0d28287f0a94&quot;}\" data-component-name=\"MentionUser\">Dwarkesh Patel<\/a><\/span>\u00a0is the founder and host of the\u00a0<span data-state=\"closed\"><a class=\"mention-pnpTE1\" target=\"_blank\" rel=\"noopener\" data-attrs=\"{&quot;name&quot;:&quot;Dwarkesh Podcast&quot;,&quot;id&quot;:69345,&quot;type&quot;:&quot;pub&quot;,&quot;url&quot;:&quot;&quot;,&quot;uuid&quot;:&quot;dca5d4b0-72e0-4e84-a98b-64fe48d4b6db&quot;}\" data-component-name=\"MentionPub\">Dwarkesh Podcast<\/a><\/span>, where he interviews leading thinkers on AI, economics, and scientific progress. He also publishes essays and interviews on his Substack, focusing on long-term technological trajectories, AI alignment, and civilizational risk.<\/li>\n<\/ul>\n<ul>\n<li><span data-state=\"closed\"><a class=\"mention-pnpTE1\" href=\"https:\/\/open.substack.com\/users\/3493234-patrick-mckenzie?utm_source=mentions\" target=\"_blank\" rel=\"noopener\" data-attrs=\"{&quot;name&quot;:&quot;Patrick McKenzie&quot;,&quot;id&quot;:3493234,&quot;type&quot;:&quot;user&quot;,&quot;url&quot;:null,&quot;photo_url&quot;:&quot;https:\/\/substackcdn.com\/image\/fetch\/f_auto,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fec64a5e8-12d4-41f9-a47d-0508f2a85050_1024x1229.jpeg&quot;,&quot;uuid&quot;:&quot;365e467b-04ac-4e1a-85e8-c716cb5acafd&quot;}\" data-component-name=\"MentionUser\">Patrick McKenzie<\/a><\/span>\u00a0is a writer and software entrepreneur best known for his newsletter\u00a0<a href=\"https:\/\/www.bitsaboutmoney.com\/\" rel=\"\">Bits About Money<\/a>, where he explains finance, markets, and institutions. He also hosts the Complex Systems podcast and has previously worked in tech and payments, including at Stripe.\n<div class=\"captioned-image-container\">\n<figure>\n<div class=\"image2-inset can-restack\"><picture><source srcset=\"https:\/\/substackcdn.com\/image\/fetch\/$s_!hjb1!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb0f122f3-c678-4675-b03e-9c1493362b64_1200x44.png 424w, https:\/\/substackcdn.com\/image\/fetch\/$s_!hjb1!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb0f122f3-c678-4675-b03e-9c1493362b64_1200x44.png 848w, https:\/\/substackcdn.com\/image\/fetch\/$s_!hjb1!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb0f122f3-c678-4675-b03e-9c1493362b64_1200x44.png 1272w, https:\/\/substackcdn.com\/image\/fetch\/$s_!hjb1!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep\/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fb0f122f3-c678-4675-b03e-9c1493362b64_1200x44.png 1456w\" type=\"image\/webp\" sizes=\"100vw\" \/><\/picture><\/div>\n<\/figure>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"pencraft pc-display-flex pc-flexDirection-column pc-reset\" style=\"text-align: left;\">Link :\u00a0<a href=\"https:\/\/post.substack.com\/p\/the-ai-revolution-is-here-will-the?utm_source=post-email-title&amp;publication_id=737237&amp;post_id=183999144&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=l7odh&amp;triedRedirect=true&amp;utm_medium=email\">https:\/\/post.substack.com\/p\/the-ai-revolution-is-here-will-the?utm_source=post-email-title&amp;publication_id=737237&amp;post_id=183999144&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=l7odh&amp;triedRedirect=true&amp;utm_medium=email<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The man who predicted the 2008 crash, Anthropic\u2019s co-founder, and a leading AI podcaster jump into a Google doc to debate the future of AI\u2014and, possibly, our lives The story of AI Patrick McKenzie:\u00a0You\u2019ve been hired as a historian of the past few years. Succinctly narrate what has been built since\u00a0Attention Is All You Need. &hellip;<\/p>\n","protected":false},"author":1,"featured_media":10448,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[50],"tags":[],"class_list":["post-10447","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-science"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.5 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The AI revolution is here. 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