Extinction-Level Capitalism

(matthewbutterick.com)

139 points | by laurex 8 hours ago ago

52 comments

  • swiftcoder 5 hours ago

    There's a core problem this analysis overlooks: OpenAI and Anthropic don't have a moat. The Chinese labs are consistently able to replicate their LLM capabilities a few months after the fact, and then release open-weight models a few months later...

    The only way for "Big AI" to become a thing is for them to establish a moat, and right now the only path to that appears to be achieving regulatory capture in the US, which is a fickle and unstable state of affairs.

    • aniceperson 2 hours ago

      You are not allowed to use any model from Chinese labs at American companies. Even from other companies like Mistral it is hard to get access, since enterprises require their own instances on vertex/bedrock/azure, and to run alternatives you have to go through multiple layers of management. In practice, no employee will proactively advocate for alternative models and the oligopoly is written in the wall, specially since the investments are circular anyway.

    • dmurvihill 4 hours ago

      That's why they're so keen to build out all these data centers; the massive capex is their only conceivable moat. Whether all those additional parameters actually make a competitive difference is still an open question.

      • warumdarum 30 minutes ago

        Moat by having the investors in a bubble in to deep. Thanks, i never looked at it that way. It can not fail, because IT CAN NOT FAIL or we are done for

    • ShinyLeftPad 4 hours ago

      Big AI is a thing. Insane money and construction projects makes the government invested in it one way or the other. It can't fail or it'll cause economic shock. It's a play to normalize it and make everyone depend on it before people question how they trained it all on their data and now drive them out of their jobs.

      If they ask for a moat they will get it, the government can simply require licensing for hardware required to run any model comparable to the cloud ones (for "national security"). good local models will only be used by .01% who are crazy neckbeards running servers in their basement and even then they will suck compared to cloud ones.

    • ThrowawayR2 2 hours ago

      > "release open-weight models a few months later"

      They are going to want to profit from their resources expended eventually and when they do, that will end.

    • smrtinsert 4 hours ago

      We're in the Pets.com era of AI for sure. There is 0 guarantee the current providers will be around in 5-10 years. I keep thinking they will have to lean in to government protection to do so.

    • toasty228 4 hours ago

      If your government weaponize AI against you it doesn't matter if the AI is American, Chinese or Uzbek

    • trashface 4 hours ago

      Memory might be a moat. A cynical view is this is why openAI is buying up all the capacity for HBM. If they have all the memory then we plebs won't be able to afford hardware to run local models. So we instead we have to rent their models basically just to get access to the memory.

      • AnimalMuppet 3 hours ago

        I doubt it. Memory manufacturers are going to ramp up, given the demand. Can AI make enough money to buy up the increased capacity forever? Whereas each user just needs enough money to buy up the memory that they need for their use. AI needs to invest billions, small users have to invest thousands. And the payback is going to be there for the small guys, so that even if they have to borrow to get the memory, they will quickly be able to repay it.

        This is not a game that big AI is going to be able to win.

  • ruricolist 6 hours ago

    If you're actually planning on reading any of the essay, "The Poisoned Chalice" is the section most likely to be of interest to this audience, especially this bit:

    > Big AI essen­tially uses its tech customers as an R&D facility. Big AI licenses models to these compa­nies. Tech compa­nies compete to adapt their busi­nesses to AI. Once a concept is proven, Big AI directly takes over that market. The labor-replace­ment story will grow into a company-replace­ment story.

  • epsteingpt 8 hours ago

    Interesting argument, but wrong.

    It's not obvious that there will be a single AI and that it will by definition concentrate power.

    At a certain point - intelligence doesn't matter. Unless we're literally headed toward 1984 / matrix at which point it doesn't matter.

    My guess is the argument for what we're doing is counterintuitively the opposite of what he's making.

    Unless we go hard at the market - now - an authoritarian state actor who is willing to use the technology to fully silence and kill critics will win.

    And boy, do they desperately, desperately want to win.

    • ShinyLeftPad 6 hours ago

      > It's not obvious that there will be a single AI and that it will by definition concentrate power.

      The article didn't even claim that though...

    • mavleop 2 hours ago

      You've misunderstood the essay. A central point is to not think about AI risk in terms of matrix/sci-fi scenarios, but in terms of how it might/is likely to function in our societies.

      So if you discount the sci-fi scenarios (which is a separate argument), the argument that "we need to be the first to develop AGI" doesn't hold water. If, say, China gets there first, so what? It will affect their society however it'll affect it (likely entrenching authoritarianism if i had to guess). But this has no bearing on us (speaking as an american)

    • deaux 6 hours ago

      So the US will win? Do you realize that the US has a "Secretary of War" who is a literal, unashamed Nazi? Not in the sense of "let's call all racists nazis", but a tattooed, true believer? How could we possibly live in a world where that is not obviously "a government willing to use the technology to fully silence and kill critics"? God, Idiocracy (2006) is nothing compared to World (2026).

      • krona 6 hours ago

        > literal, unashamed Nazi

        He's a Christian Zionist which is the belief in the fulfilment of old testament biblical prophecy. This seems diametrically opposed to Nazism to me, ideologically. I don't know how you'd square the two.

      • ReptileMan 5 hours ago

        Hugh... when has graham platner became secretary of war?

      • dirtikiti 6 hours ago

        A tattooed, true believer nazi has a Jerusalem Cross tattoo?

        Weird, thats like the exact opposite of a nazi.

    • markus_zhang 7 hours ago

      It is more of elites argumented by powerful AI will be way beyond reach of ordinary people, I think.

      Well maybe it doesn’t matter as the elites are already untouchable.

    • TheOtherHobbes 7 hours ago

      The US is an authoritarian state actor.

      My groping-in-the-dark guess is that none of this matters, because a real AGI's first act will be to secure its own future, likely through novel kinds of manipulation, persuasion, and intimidation we have no experience of and no defences against.

      It will have exactly zero loyalty to any nation, government, or economic system.

      More complicated is a Cambrian Explosion situation where multiple AIs compete and experiment, hugely accelerating diversity and evolution.

      We'd likely end up somewhere very strange indeed if that happens - possibly extinct, or possibly just changed/assimilated/other.

      There's no way for humans to consider the possibilities because we can't imagine what the possibilities would be.

      • le-mark 6 hours ago

        Your AGI seems to have the capability of super AI; can a human do any of that? No, is there any reason to believe super intelligence is a possible outcome? No, so how is this not fear mongering?

  • skybrian 5 hours ago

    The argument is that labor depending on LLM’s is dangerous but it makes speculative assumptions that the big AI labs will win.

    > Consider large law firms, aka Big Law. Currently certain legal-AI star­tups license LLMs from Big AI and repackage them for Big Law at high prices. These star­tups claim to add other special sauce. OK, sure. Where’s the economic equi­lib­rium? If legal-AI star­tups prove that money can be made selling AI to Big Law—won’t Big AI just sell to Big Law directly, and cut out the star­tups? Or if legal-AI star­tups prove that AI can effec­tively provide legal services—won’t legal-AI star­tups just sell to clients directly, and cut out Big Law? Won’t members of Big Law that adopt AI have to lay off a lot of equity part­ners, because adop­tion of AI will shrink profit margins?

    > Along these lines, I expect that to succeed finan­cially, Big AI will likely need to demolish a signif­i­cant number of existing tech compa­nies and grab their revenue for itself.

    Nobody knows how this will play out. Maybe the legal-AI startups win because they know their market better? They can switch to cheaper providers.

  • sucrosesucrose 7 hours ago

    The fatalist philosophers and authors have been mostly proven right as time marched on. And this time will be no different, the existence of "AI" ensures the future will be as dark or worse as the predictions expect. Why? Because humans are flawed and corrupt, too prone to excesses (specially conformism and convenience) and the exploitation of the natural world.

    • mdp2021 3 hours ago

      I am not sure how this is downvoted, as it contains sharply two main principles:

      -- a growth in power requires a growth in human qualities (wisdom, maturity, responsibility) for sustainability; and technology-enabled possibilities are increases in power;

      -- conformism and convenience are /exactly/ - congratulations sucrosesucrose, we had noticed and analyzed and every day increasingly come to the same assessment - the two core active faces of ignorance that are destroying current western societies. We came to the same conclusions, we identified the same two dark cancers.

      This said, some of the current technological advances are enablers, if well used, in greatly curing the underlying ignorance, and consequently the phenomenons of "conformism" and "convenience".

    • AnimalMuppet 7 hours ago

      Um, I expected a fair probability of being in a post-nuclear world by now. Global cooling wasn't real. Y2K didn't end the world. The population explosion didn't result in mass starvation. Peak oil didn't end civilization.

      So no, I don't agree that "the fatalist philosophers and authors have been mostly proven right as time marched on." No, they haven't. There have been far more fatalistic predictions than there have been actual catastrophes.

      • mdp2021 3 hours ago

        That is because your idea of what is catastrophic does not align with ours. To us, this is full unthinkable dystopia. An uncivilized world weighs much more, is much worse to us, than the world of disasters you depict. Survival is a crude, lower ideal to us, when compared to that of living decently.

  • PaulHoule 8 hours ago

    Anything to distract people from real problems like energy and the environment.

    • praptak 4 hours ago

      Big AI is intertwined with these two via data centers, isn't it?

      • porkchoppers 4 hours ago

        Not really, the power involved would amount to 12% of the grid which is possible to do at net neutral and has efficiency improvements as doubling in under 5 years. If an industry that needed petroleum and F150s was a fraction as good with improvement every 5 decades, I don't think its environmental impact would be considered.

  • strogonoff 6 hours ago

    > How Big AI plans to profit from this inter­me­di­a­tion is an open ques­tion. One AI company has suggested taking a cut of AI-assisted discov­eries. The logis­tics and legal­i­ties would be boggling. Details—what­ever.

    Interesting if they pull it off, because clearly they did not have the logistics to pay the people whose IP they used to power the LLMs.

    > For now, AI compa­nies largely agree on the first step: make workers depen­dent on AI to do their jobs, just as tech fore­bears made workers depen­dent on a certain soft­ware program to share a file, or on a certain website to have friends. This time, however, the soft­ware ulti­mately consumes the worker.

  • artninja1988 3 hours ago

    Why is the guy suing open source ai whining about big ai?

  • alephnerd 6 hours ago

    Meanwhile China is preparing to deploy $295 BILLION in an AI Data Center buildout [0] and is shifting from open models to commercialization [1].

    Any proposal about slowing down AI that doesn't put the onus on both the US and China is facetious.

    [0] - https://www.reuters.com/world/china/china-prepares-295-billi...

    [1] - https://www.digitimes.com/news/a20260609VL215/alibaba-ceo-ai...

  • internet2000 5 hours ago

    Alarmism does not make your post more convincing.

  • huragok 8 hours ago

    Capitalism was cool and good before one specific technology was invented.

    • tokai 7 hours ago

      Everything went off the rails after we invented pottery.

      • ArekDymalski 7 hours ago

        Everything went off the rails after we invented crackpottery.

    • dfedbeef 8 hours ago

      Slavery?

      • zhoBEENG 7 hours ago

        Capitalism is what replaced slavery, to generalize. By turning slaves into wage laborer-consumers, capitalists increased market sizes, thereby increasing the absolute size of the profit they get from owning the capital enterprises the laborers operated.

        The US civil war is the most explicit demonstration of this process. Northern industrial capitalists ended the southern agrarian slave economy, increasing market size and generating extreme wealth in the latter half of the 19th century.

    • phoronixrly 8 hours ago

      Eh... The internal combustion engine? Because we had climate change, oligarchs, housing prices, opioids, cryptocurrency, and now on top of all that we have war (edit: with Iran) and LLMs, and all of these can be traced back to extinction-level capitalism.

      • TacticalCoder 8 hours ago

        > ... and now on top of all that we have war ...

        There have been war since way before capitalism was invented. Beside war, humans were doing evil things way before capitalism: south america natives torturing kids to extract as many tears as possible from them before killing them, to please the gods, comes to mind, for example.

        I'll never understand this fantasy people who hate on capitalism have that the world would be all fine and well if only this one time we did communism [1] right.

        [1] or whatever floats your boat

  • himata4113 7 hours ago

    Warning: This is more of a rant because I was waiting for a post like this for awhile that I could build from to express ny own feelings on it.

    I think capitalism in itself is great, what isn't is the fact that it can build on itself, it can be infinite, there's zero limits to it. Now what I mean by that, once you make 10k, it's easier to get to 100k and even easier to get to 1m and so on, you might think it's harder, but you gain access to more tools to make more money and at the 10m to 100m range you get to a point where it starts being genuinely hard to fail because just having your name on a project elevates the chances of success by a far margin. Of course there's plenty of people who managed to fail even with millions of dollars I will acknoledge that.

    Let's take an extreme example: elon musk. Just having something done by "elon musk" makes the project known by nearly the entire world with investors at the doorstep ready to go, a pretty famous example of this would be hyper-loop, although the project itself is a complete failure, it effectively mobilized a decent chunk of companies into investing into this "modern form of transport".

    People will argue that the solutions like wealth limits and higher taxes create complacency and stop people from achieving progress and pushing humanity forward, but I don't think that's quite true because at a certain point (beyond ~1m/month or even year in some cases like Linus Torvalds) is enough to effectively do 95% to 99% of what you could spend the money on, anything beyond that is pretty much infinite wealth due to the fact that you can get 5% returns nearly risk free.

    There is this popular video of a businessman claiming that if they're taxed more that they will simply work less, but there's way more people that love their work and money is just a nice bonus. I think focusing your life around a number is a very unhealthy mindset and surfaces the worst parts of what we are as humans.

    That said, money is a great motivator and probably the reason why we are here and the problems really only start to rear their ugly head when no one person can comprehend the money they have anymore. I don't have a solution, but I also believe that we need some kind of category beyond the "motivation" treshold where it stops being a motivator and instead becomes an aggressive fight with survival of the fittest.

    • derektank 6 hours ago

      The great equalizer here is death. Nobody can cleanly pass all of their wealth and influence off to their children and while those that inherit large fortunes can maintain and improve upon them (see the Waltons) they’re rarely able to maintain the act for generation after generation. None of the great fortunes of today were built by descendants of the Vanderbilts or the Rockefellers.

      • rglover 6 hours ago

        I think it's best to plan on giving your kids/grandkids the knowledge and wisdom you gained, but any financial gain is just distributed back to something in the world you enjoy (I love this [1] story and think about it often in respect to how I'd pass on any wealth I acquire).

        [1] https://abcnews.com/US/98-year-man-donates-stock-now-worth-m...

      • himata4113 5 hours ago

        We will see, the big concern here is that lifespans start increasing faster than aging, ex: you're a ~40 year old and estimated lifespan is 80, but by the time you're 60 it's 90, by the time you're 80 it's 100 and at some point it might start increasing faster than the speed you age at. Of course we might be a few generations away from where this is the case, but it's a scary thought.

        Another would be the power your family carries, generations might not have survived into the most recent era, but their investments had a large impact on the world we live in today as dilluted as it is. I believe that this will become worse where very few people are able to dictate the direction our world will end up in - a dystopian coorperate nightmare.

  • thatoneengineer 5 hours ago

    I stopped reading after the first sentence. Calling something "inherently political" is a self-fulfilling prophecy and intentionally so. It consistently turns out to be an attempt to lay the groundwork for expropriation. No one called the Internet "inherently political" until people built stuff there that other people wanted to control.

    • originalvichy 5 hours ago

      It’s a pretty non-controversial claim and argument about the interaction between technology and human society. If you read the post further you’d probably understand what is meant by that phrase. It’s not centered solely around electronics or the internet at all.

    • hyperadvanced 4 hours ago

      I agree that “inherently political” is usually a thought terminating cliche. What kinds of technologies are conditionally political?

      The internet is a bad counterexample as it originated from a department of defense project and a number of other government programs that focused on communications and military applications.

    • pixl97 4 hours ago

      I mean, all communications technology is inherently political. From the invention of speech and writing, to the printing press, radio, telephone, TV, and now internet and the communication mediums it allows.

      This is because speech is inherently political at the end of the day.

  • euroderf 8 hours ago

    Socialism XOR Dystopia

    • thriftwy 6 hours ago

      I glimpsed last years of Soviet Union and it was pretty meh.

      I remember seeing anything in the street (a payphone or a playground for kids) and assumed it will only degrade because as a general principle, things in the streets are unmaintained.

      You could say that Soviet Union was bad specimen of socialism because of these stupid Russians?

      Except, Russia actually got 100% out of socialism with our space exploration, passenger planes and nuclear stations. It's just that 100% of socialism is worse than your average capitalist dystopia.

      • borosuxks 6 hours ago

        Degradation of public goods or services happen independently of socialism. Where I live we're unashamed capitalists, and every common thing, like playgrounds, are derelict and only being improved by community initiatives. The municipality has no money for it, and the state doesn't care. Neither does the capitalists.

      • ozgrakkurt 6 hours ago

        Pretty sure Russia is Russia because Russians are Russians and Russian culture is Russian culture. Not because Russia was communist.