Thank you for this in depth and thoughtful response!

I know that’s meant to be a joke but a guy did build a pretty cool Marx bot on top of deepseek: https://marx-bot.vercel.app/

I’ll be genuinely shocked if this holds but I’m impressed that Trump was able to accept the reality of the situation with such minimal economic pain having been inflicted on the US. I heard him say some things at that G7 conference that I would not have expected, like admitting there’s no alternative path forward or that the US has 2-4 weeks before a severe oil crisis hits.

Can you share any more context about what that is and how they source the articles? It looks really interesting but I’m relatively new to this space and would appreciate more background.

That and every day that passes reduces available oil inventories. Iran seems to be in a position to benefit from every day there is no significant opening of Hormuz. The US blockade changes the equation but I haven’t seen any evidence to suggest it’s imposing unbearable costs on Iran. It looks like the Iranian stock market is showing confidence and while there are limits on what is trading it seems to suggest that locals believe things are economically on the right track. I don’t believe that exchanges are perfect proxies for the economy but it’s certainly relevant.

Caveats: I’m definitely not an expert and am relying on machine translations for Farsi language articles.

Seems like two can play at the market manipulation game. Iran announcing a withdrawal from talks and escalations in the Bab al-Mandab early on Monday gives that a lot of time to scare the markets. I don’t know what Yemen will do but I bet I know what oil prices will do while we’re waiting to find out.

My favorite part was the official having to sit there and say, “we have plenty of weapons but we’re also cancelling because we need them, but we still have more than enough.”

I genuinely think AI is going to be capitalism’s biggest ever own goal. The wasted capital, natural resources, and asset destruction is going to be enormous.

I was looking into this the other day. This is basically another norm.

Taking the day off and protesting with my local socialist org.

Curious to see if/how this relates to the credit swap the US has been discussing with the UAE. If you can count on the Trump administration for anything it’s to be extremely transactional.

This has big, “the other leaders are from Canada, you wouldn’t know them” energy.

Ok, the numbers and spend question led me down a really interesting rabbit hole and I wanted to share a little bit of what I learned. TL;DR AI data center spend, in absolute and relative terms, is really high. Please take all my statements with a heavy dose of salt as I’m not an economist or professional researcher.

It’s probably less than railroads ~6% of GDP and probably more than telco spend leading up to the dotcom bubble ~1.5% of GDP. It’s reasonable to guess that is represents, or will by the end of 2026, ~ 2.2% of US GDP. Like the dotcom bubble it’s largely funded by private capital. Unlike the dotcom bubble it’s much more reliant on debt, specifically private credit debt, we’ll get back to why that might matter later. Where things get interesting is in the durable nature of the utility value of the goods produced by the investment. Railroad capital mostly has a 100+ year utility value, tracks can be used for a long time with some regular maintenance. Fiber has a 15+ year, probably a lot longer, utility value and again a lot of the associated infrastructure stays useful for a long time with maintenance. Data center infrastructure and GPUs are not so lucky. The people spending the money say the GPUs are good for 5 years, they probably have a 1-3 year usable lifespan. Data center infrastructure itself has a much longer useful lifespan but those buildings aren’t exactly general purpose, if AI is a bust you’ll need to have a new use for all that space. The so what of all that is this is looking even less rational and useful than the dotcom era infrastructure investment boom.

On the debt financing thing I talked about getting back to I’d suggest you take a look at this article that has the heterodox economist Michal Hudson talking about why he thinks the west is in for a really bad ride if AI + private credit + energy crisis all come together for a lemon party type situation.

Yes! I was just having this discussion last night. We have another 2.5 trillion in capex, the money corporations allocate to investing in their infrastructure, committed to AI datacenter buildout this year. That’s A LOT of money. It’s not being spent on bridges, roads, hospitals, schools, etc. It’s being spent on specialized data centers intended to house massive GPU farms to run and train the latest and greatest AI models.

AFAICT this only pays off they manage to actually beat the theoretically limitations of these LLMs and make a machine god. The so what of all that is we have A LOT of capital chasing, what is probably, a fantasy. As it does so it isn’t creating a useful stay behind asset. AI datacenters aren’t general purpose and can’t be easily reused. Add to that the fact that the GPUs don’t actually have a very long productive life and you start to see problems compound.

One important methodological note here: Zitron’s numbers on Capex are WAY better than mine. I did some digging into that 2.5 trillion number while writing this comment and found out that was based on a single source, Gartner, which has an incentive to pump up the numbers.

I read him and largely agree, I also work in the space. The thing I’d say we need to be careful of with his analysis is he consistent assumes the worst case scenario when there is ambiguity and he assumes that the worst possible outcomes from every negative event experienced by AI companies.

That’s not to say he isn’t useful, just be aware that he can easily go beyond what the evidence realistically supports and that can leave you overly optimistic about the downfall of these AI compainies.

Annualized ARR, So as an example Anthropic probably just had a great month where they made an extra 1-2 billion in revenue. They then go in multiply it by 12 and say that their annualized ARR increased by 12-24 billion. It’s misleading when subscription companies do it but at least for them users then to sign up to spend the same amount every month or year. With a consumption based model it’s even wonkier because if you had costs get out of control in April you’re likely to to try and bring them down by lowering consumption in May.

So I’ve just started reading MoA and would love to better understand what you’re saying. Who is Michael Tracey and why does he matter? I saw they had a post that implied Yemen had closed the Bab El-Mandeb which wasn’t correct but that was the biggest miss I’ve seen lately.

So I don’t get the US angle here. Why ask for a ceasefire when time only benefits Iran? Were Iranian attacks on US forces so effective that a 2 week pause allows them to material improve the balance of forces in the region? Do we have evidence of anywhere near enough buildup to launch an invasion? I don’t think the situation as far as interceptors and standoff munitions is sufficiently elastic for 2 weeks to make much difference.

I believe what your saying but it seems like everyday the straight isn’t open hurts the US side way more than the Iranian. Can anyone help me figure out what I’m missing?

So the real question will be does Iran let ships through without a toll? That money is key to rebuilding and throttling traffic is their best leverage.

It’s the best part about Trump more broadly. He strips away the veneer of empire in a way that’s hard to ignore.