This week we talk about tax hikes, free trade, and the madman theory of negotiation.

We also discuss EVs, Canada, and economic competition.

Recommended Book: How Sanctions Work by Narges Bajoghli, Vali Nasr, Djavad Salehi-Isfahani, and Ali Vaez

Transcript

On January 20, 2025, the 45th President of the United States, Donald Trump, was inaugurated as the 47th President of the US following a hard-fought election that he ultimately won by only a little bit in terms of the popular vote—49.8% to 48.3%—but he won the electoral vote by a substantial margin: 312 to opponent Kamala Harris’ 226.

Trump is the oldest person in US history to assume the country’s presidency, at 78 years old, and he’s only the second US president to win a non-consecutive term, the first being Grover Cleveland back in 1893.

This new Trump presidency kicked off even before he officially stepped into office, his people interviewing government officials and low-level staff with what have been called loyalty tests, to assess who’s with them and who’s against them, including questions about whether they think the previous election, which Trump lost to former president Biden, was rigged against Trump—a conspiracy theory that’s popular with Trump and many of his supporters, but for which there’s no evidence.

There was also a flurry of activity in Israel and the Gaza Strip, last minute negotiations between then-president Biden’s representatives gaining additional oomph when Trump’s incoming representatives added their heft to the effort, resulting in a long-pursued ceasefire agreement that, as of the day I’m recording this at least, still holds, a few weeks after it went into effect; hostages are still being exchanged, fighting has almost entirely halted between Israeli forces and Hamas fighters in Gaza, and while everyone involved is still holding their breath, worried that the whole thing could fall apart as previous efforts toward a lasting ceasefire have, negotiations about the second phase of the three-phase ceasefire plan started yesterday, and everything seems to be going mostly according to plan, thus far.

That said, other aspects of the second Trump presidency have been less smooth and less celebrated—outside of the president’s orbit, at least.

There have been a flurry of firings and forced retirements amongst long-serving public officials and employees—many seemingly the result of those aforementioned loyalty tests. This has left gaps in many fundamental agencies, and while those conducting this purge of said agencies have claimed this is part of the plan, and that those who have left or been forced to leave are part of the alleged deep state that has it in for Trump, and who worked against him and his plans during his first presidency, and that these agencies, furthermore, have long been overstaffed, and staffed with people who aren’t good at their jobs—so these purges will ultimately save the government money, and things will be restructured to work better, for some value of “better,” anyway.

There have been outcries about this seeming gutting of the system, especially the regulatory system, from pretty much everyone else, national and international, with some analysts and Trump opponents calling this a coup in all but name; doing away with the systems that allow for accountability of those in charge, basically, and the very structures that allow democracy to happen in the country. And even short of that, we’re seeing all sorts of issues related to those empty seats, and could soon see consequences as a result of the loss of generational knowledge in these agencies about how to do things; even fairly basic things.

All of which has been accompanied by a wave of revenge firings and demotions, and threats of legal action and even the jailing of Trump opponents. In some cases this has included pulling security details from anyone who’s spoken out against Trump or his policies in the past, including those who face persistent threats of violence, usually from Trump supporters.

On the opposite side, those who have stuck by Trump, including those who were charged with crimes related to the January 6 incursion at the US Capitol Building, have been pardoned, given promotions, and at times publicly celebrated by the new administration. Some have been given cushy jobs and promotions for the well-connected amongst his supporters; Ken Howery the partner of venture capitalist and owner of government contractor Palantir, Peter Thield, and close ally of serial CEO and enthusiastic Trump supporter Elon Musk, was recently made ambassador to Denmark, for instance.

Some of these moves have caused a fair bit of chaos, including a plane colliding with a military helicopter, which may have been the result of understaffing at the FAA, alongside an executive order that froze the funding of federal programs across the country.

That executive order has been blocked by judges in some areas, and the Trump administration has since announced that they’ve rescinded the memo announcing that shutdown, but the initial impact was substantial, including the closure of regional Social Security, Medicare, and Medicaid infrastructure, and the halting of government funded research and educational programs.

Lots of people had their livelihoods threatened, lots worried they wouldn’t be able to afford necessary medical procedures or be able to pay their bills, and many people worried this might cause the country to lose ground against competitors in terms of scientific and technological development, while also leading to some pretty widespread negative health outcomes—the government has also pulled health data, so information about disease spread and even pandemics is now inaccessible, further amplifying that latter concern.

And that’s just a very abbreviated, incomplete summary of some of the actions Trump’s administration has taken in its first two weeks back in office; part of a desire on their part to hit the ground rolling and get rid of elements that might stand in their way as they fundamentally change the US system of government to better match their ambitions and priorities.

What I’d like to talk about today, is a specific focus of this new administration—one that was a focus of Trump’s previous administration, and to a certain degree Biden’s administration too: that of US protectionism, and the use of tariffs against perceived enemies; but also, in Trump’s case, at least, against long-time allies, as well.

—

On February 2 of 2025, Trump posted about tariffs on the twitter-clone he owns, Truth Social. And I’m going to quote the post in full, here, as I think it’s illustrative of what he intends to do in this regard in the coming months.

“The “Tariff Lobby,” headed by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA. THOSE DAYS ARE OVER! The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the “Stupid Country” any longer. MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example? THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE — AND THE RESULTS WILL BE SPECTACULAR!!!”

So there are several things happening there, probably the most fundamental of which is the claim that other countries, including the US’s allies, like Canada and Mexico, are taking advantage of the US when it comes to trade. This post followed Trump’s signature of an executive order that applied a 25% tariff on all Canadian and Mexican imports, and a 10% tariff on all Chinese imports.

A tariff is basically a tax on certain goods brought into a country from other countries.

So the US might impose a tariff on Chinese cars in order to keep those cars from flooding US markets and competing with US- and European-made models. And that’s what the US did under the first Trump, and then the Biden administration—it imposed a 100% border tax on electric vehicles from China, the theory being that these cars are underpriced because of how the Chinese economy works, because of how workers there are treated, and because the Chinese government subsidizes many of their industries, including the EV industry, so their cars are quite good and sold at low prices, but they got that way because they’re competing unfairly, according to this argument. Chinese cars sold at their sticker price on the US market, then, might kill off US car companies, which is not something the US government wants.

Thus, the price on Chinese EVs is effectively doubled on the US market, and that, on a practical level, kills that competition, giving US carmakers cover until they can up their game and compete with their foreign rivals.

The usual theory behind imposing tariffs, then, if you’re doing so for ostensible competitive reasons, at least, is that slapping an additional tax on such goods should allow local businesses to better compete against them, because that additional tax raises prices, and that means local offerings have a government-provided advantage. This can help level a perceptually imbalanced playing field, or it can rebalance things in favor of brands in your country.

In reality, though, tariffs often, though not always, become a tax on customers, not on the companies they’re meant to target.

Chinese vehicles have had trouble coming to the US for other reasons beyond price, including a change in safety standards that would be regulatorily required, and a slew of advantages provided to US companies beyond the hobbling tariffs enforced on their foreign competition. But other goods come into the US market from all over the place, and when there’s a tariff of say 10 or 25%, that tax is generally just tacked on to the sticker price on the US market, and US consumers thus pay more for something they might have otherwise bought more cheaply, sans tariffs.

This creates an effective tax within various industries in the US economy, and it generally has an inflationary effect, as a consequence; things become more expensive, so the money people earn doesn’t go as far.

So the new Trump administration announced a new 10% tariff on all Chinese goods, and 25% tariffs on goods from Canada and Mexico, though energy products like oil from Canada will only face a 10% tariff.

China has already lobbed a bunch of counter-tariffs at the US over the past few administrations, and it suggested it would add more to the tally in response to this new flat tariff, and now Canada and Mexico are rattling the same sabers, saying they won’t stand by while their neighbor, with the world’s biggest economy, elbows them out, causing possibly substantial damage to their local businesses that export goods to the US.

The Canadian government has said it will apply 25% tariffs on $155 billion of American goods, including things like orange juice and appliances, those tariffs phased in over the next three weeks. And the Mexican government has said they’ll do similar things, without giving specific details, as of yet.

That means US manufacturers, companies that make stuff that ends up being sold in Canada and Mexico, could soon see comparable tariffs on their goods sold in those markets. That, in turn, could lead to significant economic consequences for such companies, but also everyday people living in all the affected countries, because of that inflationary effect—that effective tax on all of these goods.

So even without those counter-tariffs, these new tariffs from the Trump administration against Canada, Mexico, and China to are expected to cause some real damage to the US economy, and to normal Americans. The Tax Foundation has estimated that they’ll shrink US economic output by .4% and increase taxes by $1.2 trillion between 2025 and 2034, which on a micro-scale represents an average household tax increase of about $830 in 2025, alone; an extra $830 out of pocket per household on average because of these punishments that are ostensibly aimed at other countries, to try to get them to do things Trump wants them to do.

Most of that $1.2 trillion tax increase is just from the Mexico and Canada tariffs: $958 billion of it, in fact. And during his first term in office, Trump’s tariffs imposed about $80 billion worth of new taxes on American households in a single year, from 2018 to 2019—which isn’t the same as just hiking taxes, but it amounts to the same outcome; and when compared to straight-up tax hikes, this represents one of the largest tax increases in several decades.

Biden kept most of Trump’s tariffs from his first administration in place when he stepped into office, and Biden added some of his own, too: especially on strategically vital tech components like computer chips, and next-step product categories like electric vehicles. And the net-impact of these tariffs on the US economy is generally considered to be mostly negative, in terms of practical tax hikes and its inflationary impact, but also in terms of reduced economic activity and employment.

Trade wars can sound pretty tough and often serve as nationalistic red meat when reported upon, but most economists consider them to be the legislative equivalent of shooting oneself in the foot; completely open, free trade comes with downsides, as well, including the potential for a nation like China to dump products at low prices in foreign markets, putting local manufacturers out of business, then raising their prices once they’ve soaked up all the oxygen.

But trade conflicts often result in a lot of downsides for everyday, tax-paying citizens, have long-term negative effects on businesses, and can also stoke inflation, causing secondary and tertiary negative effects that are hard to tamp down, later.

Knowing this, many analysts have speculated that Trump might be using these tariffs as a sort of shot across the bow, wanting to renegotiate all sorts of agreements with enemies and allies, alike, and using the madman theory of negotiation, trying to convince those on the other side of the eventual negotiation that he’s not in his right mind and is willing to burn it all down, wounding himself and his country in order to take out those who he feels have wronged him, if he doesn’t get what he wants.

There’s a chance this could work for him, and his many threats and implied threats have already led to a whole lot of cowtowing and cancelled lawsuits against him and his people, even from folks and entities that have previously been staunchly against Trump and everything he stands for.

There’s also a good chance that these other governments will see whatever it is he’s demanding from them as a small price to pay to get back to something approaching normal relations with the US, and normal dealings with the US’s economy.

His demands so far, though, have mostly revolved around seeming specters; he’s alleging insufficient efforts aimed at drug imports into the US, and that both Mexico and Canada are enabling all manners of money laundering and transnational crimes; allegations that both countries deny, but which probably aren’t the point to begin with. These accusations are generally being seen as a means of forcing these tariffs through without the usual process, which would take a while and present the opportunity for government systems to derail or weaken them, which happened to some of the tariffs Trump wanted to hurl at other governments during his first administration.

So those seeming rationales might be primarily justifications to force these tariffs through, and it could be that the tariffs are meant to be negotiating leverage first and foremost, going away as soon as he gets what he wants—whatever that actually is.

That said, it’s also been speculated that a manman-theory-style false threat that’s seen to be a false threat—hardcore, arguably nonsensical tariffs against allies, for instance—may not serve their purpose, because everyone knows they’re false. That may mean those on the other end of them, if they hold their ground and are willing to suffer a little, could make it out the other side without giving too much away, the US suffering more, and thus, the president eventually giving up, coming up with justification for shifting to a new strategy but mostly just trying to lower inflation levels he raised, and bring life back to a stock market that he collapsed.

Either way, it looks like there’s a pretty good chance a lot of established norms and folkways will be trampled over the next few years, possibly with good reason, if you support the ends of this administration, at least, though by some indications maybe because of a fundamental misunderstanding of how economics works at this scale, or maybe for different reasons entirely: part of that larger plan to disrupt and demolish aspects of the US system of governance, making way for replacements that are more to the current administration’s liking.

Note: after recording this episode, but before it went live, the Chinese tariffs went into effect, but the tariffs against Mexico and Canada (and those countries’ counter-tariffs) were paused. More information: https://www.nytimes.com/live/2025/02/04/us/trump-tariffs-news#here-are-the-latest-developments

Show Notes

https://www.npr.org/2024/05/06/1248065838/cheap-chinese-evs-us-buy-byd-electric-vehicles

https://ustr.gov/usmca

https://www.axios.com/2025/02/01/trump-cfpb-rohit-chopra-fired

https://www.axios.com/2025/02/02/trump-netanyahu-gaza-ceasefire-hostage-deal

https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/

https://taxfoundation.org/blog/trump-tariffs-impact-economy/

https://www.axios.com/2025/01/03/biden-blocks-us-steel-nippon-japan

https://truthsocial.com/@realDonaldTrump/posts/113934450227067577

https://www.washingtonpost.com/business/2025/01/02/biden-blocks-nippon-us-steel-deal/

https://www.axios.com/2025/01/03/nippon-steel-us-steel-sue-biden

https://restofworld.org/2024/china-tech-tariffs-which-countries-will-impose/

https://www.nytimes.com/live/2025/02/02/us/trump-tariffs

https://www.nytimes.com/2025/02/02/business/trump-tariffs-china.html

https://apnews.com/article/trump-tariffs-trade-china-mexico-canada-inflation-753a09d56cd318f2eb1d2efe3c43b7d4

https://www.reuters.com/business/trump-stretches-trade-law-boundaries-with-canada-mexico-china-tariffs-2025-02-02/

https://www.theverge.com/news/600334/trump-us-tariffs-imported-semiconductors-chips

https://www.uschamber.com/international/u-s-chamber-tariffs-are-not-the-answer

https://www.bbc.com/news/articles/c627nx42xelo

https://www.axios.com/2025/02/01/trump-canada-mexico-tariffs

https://www.bloomberg.com/news/articles/2025-02-02/mexico-pledges-retaliatory-tariffs-against-us-while-calling-for-cooperation?embedded-checkout=true

https://www.cbsnews.com/news/what-are-tariffs-trump-canada-mexico-what-to-know/

https://www.wsj.com/opinion/donald-trump-tariffs-25-percent-mexico-canada-trade-economy-84476fb2

https://english.elpais.com/international/2025-02-02/from-cartels-to-terrorists-trump-imposes-a-new-paradigm-on-mexico-in-the-war-on-drugs.html

https://www.theguardian.com/us-news/live/2025/feb/02/canada-mexico-china-donald-trump-trade-tariffs-us-politics-live

https://budgetlab.yale.edu/research/economic-and-fiscal-effects-trump-administrations-proposed-tarrifs

https://www.nytimes.com/2025/01/31/us/trump-freeze-blocked.html

https://en.wikipedia.org/wiki/2024_United_States_presidential_election

https://apnews.com/article/israel-palestinians-hamas-war-news-ceasefire-hostages-02-01-2025-bb560151db1437d0b35ac1d568457a46

https://www.axios.com/2025/02/01/trump-moves-missed-plane-crash-dei

https://apnews.com/article/trump-tariffs-dei-federal-workers-plane-crash-733303f2c808834f4cc4b30dfaf308a7

https://apnews.com/article/trump-federal-grants-pause-freeze-e5f512ae6f1212f621d5fa9bbec95e08

This week we talk about OpenAI, the Stargate Project, and Meta.

We also discuss o1, AGI, and efficiency.

Recommended Book: The Shortest History of Economics by Andrew Leigh

Transcript

One of the bigger news items these past few weeks, in terms of the numbers involved, at least, was an announcement by US tech company OpenAI that it will be starting a new company called the Stargate Project, which will boast a total $500 billion-worth of investment, the first $100 billion of which will be deployed immediately.

All that money will be plowed into artificial intelligence infrastructure, especially large-scale computing clusters of the kind required to operate AI systems like ChatGPT, and the funds are coming from OpenAI itself, alongside SoftBank, Oracle, and MGX, with Arm, Microsoft, and NVIDIA also involved as technology partners.

It’s a big, beefy enterprise, in other words, and the fact that this has been in the works since 2022, it’s official announcement seemingly held back so that newly returned US President Trump could announce it as part of his administration’s focus on American infrastructure and AI dominance, didn’t dim the glow of the now-formal announcement of what looks to be a truly audacious bet on this collection of technologies, doubts about the players involved having the money they’ve promised ready, notwithstanding.

That said, this is far from the only big, billions and tens of billions-scale wager in this space right now.

Last year, Microsoft announced a $30 billion infrastructure fund, in collaboration with BlackRock, and earlier in January of 2025, Google’s CEO said that his company would spend about $80 billion on the same, separate from their commitment to Stargate.

Meta’s CEO Mark Zuckerberg recently divulged that the company would spend somewhere between $60-65 billion on capital expenditures, mostly on AI, in 2025—that’s up about 70% from 2024 spending.

And last December, xAI CEO Elon Musk announced that his company had just raised a fresh $6 billion to build-out more compute infrastructure; and his role at the head of that company is assumed to be part of why he trash-talked the aforementioned Stargate effort, though there’s also a long-simmering animus between him and OpenAI CEO Sam Altman, and the fact that everyone seems to be trying to get in good with Trump—which is probably part of why many of these announcements are happening right now: Trump is in the position to king-make or cripple their respective efforts, so whomever can get in good with him, or best with him, might have an advantage in what’s become a very expensive knife-fight in this most rapidly burgeoning of tech investment loci.

There’s a reason there’s so much money flowing to this space, announcements aside, right now, too: the chatbots that’ve emerged from the GPT, LLM era of AI systems are impressive and useful for many things, and AI powered bots could even replace other sorts of user interfaces, like search engines and apps, with time.

But there are also some more out-there efforts that are beginning to bear fruit.

AI is helping Google’s DeepMind team discover new materials at an astonishing rate—including both the discovery and the testing of their properties, stage.

AI systems are also being used to accelerate drug discovery and trial design, and a company (backed by OpenAI’s Altman) is trying to extend human life by a decade using exactly this process.

Meta has a new tool that enables real-time speech and text translation between up to (depending on the type of translation being done) 101 different languages, and we’re even seeing AI systems meant to detect and track small, otherwise overlooked infrastructure issues, like potholes, at a local level.

And to be clear, this is far from a US government and US-based tech company effort: government agencies, globally, are scrambling to figure out how to regulate AI in such a way that harms are limited but research, investment, and innovation isn’t hampered, and entities all over the place are plowing vast wealth into these projects and their related infrastructure; India’s Reliance Group recently announced it will build what could become the world’s biggest data center, planned to go into operation within two years—a project with an estimated price tag of somewhere between $20-30 billion. And that, all by itself, would more than triple the country’s data center footprint.

So this scramble is big but also global, and it’s partly motivated by the gold rush-like desire to be first to something like artificial general intelligence, or AGI, which would theoretically be capable of doing basically anything a human can do, and possibly better.

That could, depending on the cost of developing and running such a system, put a lot of humans out of work, scrambling the world and its economy it all sorts of ways, and causing untold disruptions and maybe even havoc. That chaos could be very good for business, however, for whomever is able to sell this new commodity of labor to everyone else, replacing most or all of their employees with digital versions of the same—each one cheaper than a comparable human would be to perform the same work.

What I’d like to talk about today, though, is a challenge to the currently dominant theory of operation in this industry, and why a new family of AI models is sending many of the tech world’s biggest players into a panic.

—

A lot of the news coming out of the AI world, at the moment, is focused on what are called agents, or agentic AI.

An AI agent is a system that can operate with agency: it can do things on its own. So you could have one of these systems, something you might engage with like a chatbot, but one capable of taking complex instructions, and you could tell it to find the best e-bike for your use case, and it would then take your info, your context, your needs into consideration, do a bunch of research, and maybe even buy and set up the delivery of the bike for you, with limited check-ins required on your part.

A truly agentic AI would operate as sort of a personal assistant, capable of doing anything a human personal assistant would be able to do—sans the physical body, of course—though that could come later.

This is generally seen as a step on the path toward AGI, and perhaps even AI superintelligence, which would be AGI that’s massively smarter and better at everything than any human, all of which also moves these things from the realm of “tool to be wielded by humans”, toward something more like a robot that can do all the things it’s supposed to do, without a human present; a different category of product and service.

This type of AI, with this level of capability, is generally considered to be really expensive to make—to train, in the industry parlance—and to use, because of how much computing power is required to run the code required to leverage these sorts of smarts.

In 2020, ChatGPT-3 cost somewhere between $2-4 million to train. Its successor, ChatGPT-4, which was deployed in 2023 cost more like $75-100 million.

That’s a lot more money. The model is a lot more powerful, granted, but the scaling laws that have seemed to be at play in this space, the increase in cost between generations of AI, have suggested that getting another capability leap comparable to what we saw between ChatGPT-3 and 4 would cost something like a billion dollars, and even that might give us a jump, but not the same staggering growth in performance that we saw between those generations.

The are arguments to be made that the size and type of dataset matter, here, and that the culling of said datasets, and how the models are tuned to use the data and respond to things are also vital, perhaps as much or more so than the initial training.

Companies like OpenAI have also figured out all sorts of ways to wring more performance out of less training and compute, including things like allowing the AI to reference other sources—basically doing a web search or checking wikipedia and similar references, in addition to knowledge that already exists in its training dataset—or allowing them to “think” longer, giving them more time to work through a problem or task, which tends to lead to better results, even with weaker—in terms of training and compute power—systems.

Ultimately, though, most of these companies seem to be assuming that more money churned into more infrastructure and compute capability will be necessary, to make these things better at doing science and solving global problems, at maybe running military campaigns-scale issues, but also at replacing humans as employees—creating more agentic, ultimately, they hope, AGI-level systems.

So that’s a big part of why there’s so much money sloshing around in the AI world right now: all these companies want to build the biggest, baddest model, they would love to develop AGI and put everyone out of work, and they assume that more money will equal more potency, so if they don’t start building now, they risk being left behind in a couple of years when all their competitor’s snazzy new assets are available and powering their AI systems—which could allow their competitors to get there first, and there’s a general assumption that it’s important to be first or close to first on this, as truly AGI-level, or beyond AI could theoretically allow them to refine their own systems faster, which could secure them a permanent lead over their opposition, moving forward.

Though the US is generally considered to be in the prime position in that particular race, so far, China has been investing a lot in this space, as well, and many of their investments have been similar to those of their Western competitors; dropping lots of money on the issue, building big infrastructure, and so on.

They’ve been hindered quite a lot by Western, especially US, sanctions, though, and that’s made it more difficult, not impossible, but more time-consuming and expensive for them, to get the highest-end chips optimized for AI systems, like those made by NVIDIA.

This has forced them to take some different approaches to their international peers, and while many of those approaches still involve huge price tags and build-outs, some of them have instead focused on a less-celebrated aspect of the industry: that of smaller models that are a lot more efficient, achieving gains that are out of proportion to their training and operating costs.

Case in point are the new DeepSeek R1 models, which are a collection of AI models that were cheap to make, released free for public use and editing, and which seem to beat OpenAI’s o1 reasoning models—which are very much not free, and which were a lot more expensive to develop—on some of the most widely used performance benchmarks.

These models apparently cost something like 3-5% what OpenAI spent on its o1 model, a mere $5.6 million, and again, they’re free to use, but also open source, so anyone who wants to build their own business or new AI atop them can do so; and their API costs are more than 90% lower than o1’s, so it’s also a lot cheaper to use these models for development purposes than OpenAI’s options.

This isn’t the first time a Chinese company has taken a look at what folks are doing in the west and then massively undercut their efforts by amplifying the efficiency many fold. Also, again, there’s a constraint on Chinese companies’ ability to get the latest and greatest AI hardware, which incentivizes this path of development, and they also have a super competitive tech industry in China, which tends to force a lot of their sub-industries, like batteries and solar panels, to iterate rapidly and push costs as low as functionally possible.

This family of models was made as kind of a side project by someone who’s been competing within that somewhat brutal evolutionary context, and the rest of the world, by comparison, just hasn’t had the same forcing functions influencing its development path—so this level of efficiency with this level of performance has been, up to this point, unheard of. And as a result, these DeepSeek models have sent the US and other western tech industries into a tizzy.

And it makes sense that these people would be panicking: they have spent, and are intending to continuing spending heavily on next-gen AI infrastructure, and this type of model, trained for basically nothing, demonstrating this level of performance? It calls all those investments into question, even to the point that some commentators—without evidence, so there’s no reason to believe this is the case—have wondered out loud if this might be some kind of psyop by China to kill the US’s AI industry, basically making it look like a bad investment, if these kinds of results can be achieved so inexpensively elsewhere.

Again, that’s almost certainly not what’s happening here, but these models have reportedly landed like a live hand grenade in the offices of the US AI industry, with folks in big tech companies frantically trying to figure out how DeepSeek does what it does, and then surreptitiously copying whatever they can to try to get ahead of this, build their own version of the same and maybe work those findings into their planned investments.

Meta in particular has apparently been on edge about this, as they’ve tried to own the free, open AI model space with their Llama family of AI models; which have been generally well received, but apparently DeepSeek’s earlier model, v3, was already messing with their heads, surpassing what they were able to do with llama, and this new family, the R1 family, has them worried they won’t be able to hold onto that position, and might not even be able to compete, despite their tens of billions of dollars worth of investment.

What’s more, something this effective and efficient can be run by a lot of companies that would otherwise have had to rely on entities like OpenAI and Meta, which have the computing infrastructure—all those big buildings they’re constructing at a frantic rate and high cost—to handle the larger models.

Non-AI companies that want to use these systems, though, could theoretically just buy their own, smaller setup and run their own AI, in-house, which would alleviate some security concerns related having all that stuff processed off-site, but it would also almost certainly be cheaper over the long-term, compared to just paying someone like Google or OpenAI for their services, forever.

All of this has resulted in a fair bit of volatility in the US stock market, which has been heavily reliant on AI-oriented tech stocks for growth over the past year, with NVIDIA in particular taking a hit, due to the possibility that heavyweight chips might not be vital to creating high-end AI systems.

There are downsides to DeepSeek, of course, perhaps most obviously that this model, having come from China, is laden with censorship about exactly the sorts of things you would expect: Tianammen Square, China’s government and it’s many well-documented abuses, and so on. There could be more issues, too, that the folks who look into such things will discover after spending more time with this family of AI, though thus far, the response has generally been very positive, even with those caveats.

Either way, this challenges the assumption that the US or any other country can stifle another nation’s, or group’s, AI ambitions with hardware sanctions.

It also suggests that, if this general approach could be replicated, we may see a lot more models that are cheap and easy to run, but which are also effective enough for a lot of those next-step, higher-end utilities. And that would allow AI to spread a lot more quickly, more people being able to wield more powerful tools, while also potentially doing away with many of the moats—the defendable, unique value propositions—these larger tech companies assumed they would have by building and controlling the pricy infrastructure they assumed would be necessary to spin-up AI systems of that calibre.

Show Notes

https://www.microsoft.com/en-us/research/story/ai-meets-materials-discovery/

https://semianalysis.com/2025/01/23/openai-stargate-joint-venture-demystified/

https://openai.com/index/announcing-the-stargate-project/

https://techcrunch.com/2025/01/24/stargate-will-use-solar-and-batteries-to-power-100b-ai-venture/

https://www.ft.com/content/4541c07b-f5d8-40bd-b83c-12c0fd662bd9

https://www.politico.com/news/2025/01/23/trump-staff-musk-conflict-00200311

https://www.nytimes.com/2024/12/24/technology/elon-musk-xai-funding.html

https://www.cnbc.com/2025/01/22/trump-had-phone-call-with-openais-sam-altman-last-week.html

https://www.whitehouse.gov/presidential-actions/2025/01/removing-barriers-to-american-leadership-in-artificial-intelligence/

https://apnews.com/article/trump-ai-artificial-intelligence-executive-order-eef1e5b9bec861eaf9b36217d547929c

https://restofworld.org/2025/global-ai-regulation-big-tech/

https://www.wsj.com/tech/ai/meta-spending-ai-facebook-data-centers-9452a88f

https://www.reuters.com/technology/meta-invest-up-65-bln-capital-expenditure-this-year-2025-01-24/

https://www.bloomberg.com/news/articles/2025-01-23/billionaire-mukesh-ambani-plans-world-s-biggest-data-center-in-india-s-gujarat?embedded-checkout=true

https://www.bloomberg.com/news/articles/2025-01-24/apple-enlists-company-veteran-kim-vorrath-to-help-fix-ai-and-siri?embedded-checkout=true

https://www.ft.com/content/25a473ea-9f87-474a-8729-bc5287df853a

https://spectrum.ieee.org/machine-translation

https://techcrunch.com/2025/01/24/elevenlabs-has-raised-a-new-round-at-3b-valuation-led-by-iconiq-growth-sources-say/

https://www.bloomberg.com/news/articles/2025-01-24/vc-lightspeed-bets-big-on-ai-megadeals-backing-anthropic-xai-mistral

https://www.ft.com/content/7dcd4095-717e-49f8-8d12-6c8673eb73d7

https://www.nytimes.com/2025/01/23/technology/ai-test-humanitys-last-exam.html

https://every.to/chain-of-thought/we-tried-openai-s-new-agent-here-s-what-we-found

https://www.platformer.news/openai-operator-ai-agent-hands-on/

https://techcrunch.com/2025/01/23/openai-launches-operator-an-ai-agent-that-performs-tasks-autonomously/

https://www.axios.com/2025/01/19/ai-superagent-openai-meta

https://blog.google/technology/google-deepmind/google-gemini-ai-update-december-2024/

https://arstechnica.com/ai/2025/01/china-is-catching-up-with-americas-best-reasoning-ai-models/

https://www.macrumors.com/2025/01/27/deepseek-ai-app-top-app-store-ios/

https://www.statista.com/chart/33114/estimated-cost-of-training-selected-ai-models/

https://sherwood.news/tech/a-free-powerful-chinese-ai-model-just-dropped-but-dont-ask-it-about/

https://www.axios.com/2025/01/17/deepseek-china-ai-model

https://www.nytimes.com/2025/01/23/technology/deepseek-china-ai-chips.html

https://archive.ph/WMUbb

https://x.com/pmarca/status/1882719769851474108

https://venturebeat.com/ai/tech-leaders-respond-to-the-rapid-rise-of-deepseek/

https://archive.ph/vDsQ4

https://archive.ph/CrbGO

https://x.com/nealkhosla/status/1882859736737194183

https://x.com/samfbiddle/status/1882882950368473161

https://x.com/samfbiddle/status/1882884223008493887

This week we talk about October 7, the Gaza ceasefire plan, and Netanyahu.

We also discuss Hamas, Qatar, and the new US administration.

Recommended Book: Witch King by Martha Wells

Transcript

On October 7, 2023, the militant group Hamas launched a sneak attack from the Israeli occupied Gaza Strip against Israel itself, killing about 1,200 people and taking just over 250 hostages.

Israeli forces were caught stunningly unaware by this, but shortly thereafter, Israel launched a counterattack into Gaza, sweeping through the Strip, with both on the ground incursions of tanks and troops, and with seemingly endless air raids and missile strikes, ostensibly to clear out Hamas fighters and find their leadership, but the net impact of this, on top of Hamas’ organization being substantially degraded, was the reductiond entire cities to rubble and the displacement almost the entirety of the Gazan population—something like 2.3 million people, most of whom have been living on the streets or in ramshackle encampments, without reliable sources of food, water, or shelter, as aid shipments from elsewhere have been held back by Israeli forces, for more than a year.

Gaza’s Health Ministry estimates that more than 46,000 Palestinians and other Gazan residents have been killed as a result of the fighting over the past 15 months, with more than double that, nearly 110,000 wounded. The Israeli military says they’ve killed more than 17,000 militants over the course of their invasion, though both sources are biased and are operating from incomplete numbers, so these figures are all considered to be suspect at this point, if probably in the right general ballpark, in terms of orders of magnitude.

The hostages taken by Hamas during that initial attack into Israel have remained a tricky issue throughout this conflict, as Hamas leaders have continuously used them as bargaining chips and at times, human shields, and the Israeli government has regularly reassured the hostages’ families that they’re focused on returning those captives home safely—but they’ve done this while also, in many cases, seemingly doing the opposite; focusing on taking out Hamas and its leadership, first and foremost, to the point that Israeli forces have seemingly killed many of the hostages they’re attempting to rescue, because they went in after a Hamas leader or bombed a neighborhood into oblivion without first checking to see who was in that neighborhood.

This stance has in some cases been incredibly inconvenient for the Israeli government, as the families of the hostages have in some cases been at the center of, or even sparked, some of the large protests against the Israeli government and its actions that have become a fixture of Israeli life since this war started.

Prime Minister Netanyahu and his military leaders have been a particular focus of this internal ire, but the Israeli government in general has been targeted by seemingly endless public acts, meant to show civilian discontent with how they’re doing things.

Since that day when Hamas attacked Israel in October of 2023, this war has expanded to encompass not just Israel and Hamas, but also other militant groups, like the Houthis operating out of Yemen, and Hezbollah, operating out of Southern Lebanon, just on the other side of Israel’s northern border.

All three groups are supported, in terms of training, weapons, and money, by Iran’s government, and they’ve helped Iran sustain a collection of proxy conflicts throughout the region for years, without Iran ever having to get directly involved.

These relationships and that sponsoring of these groups has allowed Iran to exert its influence throughout the Middle East and beyond, including into the Red Sea, which typically serves as a vital international shipping channel, but because of regular attacks against shipping vessels by the Houthis from Yemen, the whole of the global supply chain has been disrupted, all sorts of things becoming more expensive and goosing already high inflation levels, because of the longer routes and thus, more expensive shipping costs that have become necessary in an era in which this channel is dangerous to traverse.

This dynamic, of Iran playing puppetmaster with its proxies throughout the Middle East, has shifted a fair bit over the course of this war, as these attacks, on Israel and other entities in the region, have attracted counterattacks by Israel and their allies, including the US, and that in turn has left Hezbollah all but destroyed—a series of brazen decapitation attacks by Israeli forces basically wiping out the whole of the group’s upper ranks and resource stockpiles within a matter of days. They’ve also destroyed much of Hamas’ local infrastructure and leadership, and the Houthis, while attracting a lot more attention and prestige for their efforts in the Red Sea, have also seen their capacity to operating more broadly degraded by the presence of a swelling, and increasingly aggressive, anti-Houthi fleet.

All of which has significantly diminished Iran’s reach, and its capacity to move pieces on the board. Attacks directly against Iran by Israel, too—which were met with remarkably ineffective counterattacks—have likewise destroyed infrastructure, but perhaps more importantly substantially reduced Iran’s credibility as a true force in the region; they’re still a huge military power, in other words, but unless something changes, like their military managing to develop a nuclear weapon, they’re no longer considered force they were at the beginning of all this; their weakness at range, in particular, makes them look downright ineffectual compared to pretty much all the other military powers in the region, right now.

This has also, arguably, made them a less appealing ally for Russia. And though the two nations recently announced a new defense pact, this pact was seemingly signed because both nations recently lost a valuable supplicant state in Syria, which saw its Assad government toppled not long ago—the new government not clearly aligned with either of them, and perhaps even oppositional to them.

This pact was made from a place of relative weakness, then, not strength, and its dictates are pretty limited: no mutual defense clause, no formal alliance. It’s basically meant to indicate that the two nations won’t actively help anyone else attack the other from their territory, which is about as noncommittal as these sorts of agreements get.

To Russia, still, then, Iran is more or less a provider of drones and rockets, not a peer or even true regional power. And that’s partly the result of the weakness Iran has shown in the face of repeated Israeli aggression toward them, during this conflict.

This conflict has also shaped global politics, as people on the political left, in particular, have tended to rally for innocent Gazan civilians, while those on the right have tended to support Israel’s (also conservative) government, and it’s decision to conduct the war as it has.

This may have nudged the recent US presidential election in Trump’s favor, and other campaigns have likewise been at least minutely affected by this issue, and its polarizing, at times fracturing impact on left-leaning parties in particular.

What I’d like to talk about today, though, is what looks to be the beginning of the end of this conflict, and what a newly negotiated ceasefire between the involved parties entails.

—

The events I breezed through in the intro paint a far from complete picture of what’s happened during this war; it’s been big, expansive, expensive, and brutal, and has fundamentally changed the geopolitical setup of the region, and in some ways the world, as well.

Just as potentially wide-reaching is the ceasefire that’s been negotiated and, as of the day I’m recording this at least, one day after it officially came into effect, is so far still active, and which seems primed to nudge things away from active conflict and toward some new state of affairs in the region.

So let’s jump in and talk about the details of this ceasefire.

Governments have been shipping diplomats to the region since this thing broke out, all wanting to polish their reputation as peacemakers and reliable intermediaries, and all trying to formalize something like this, some kind of lasting peace, pretty much from the day Hamas launched that sneak attack, but even more so after Israel began pummeling Gaza to dust.

And Qatar has been a focal point for these peace efforts from the get-go, enjoyinf some initial success in helping the two groups establish a four-day ceasefire in late-November 2023, that period later extended by several days, so that in total 100 Israeli hostages were freed in exchange for the freedom of 240 Palestinian women and children who were being held in Israeli jails.

Qatar has been building its reputation for these sorts of negotiations, and Egypt joined in, partly for the same reputational reasons, but also because Israel’s invasion has come dangerously close to their shared border, and there have been concerns that displaced Palestinians might be forced across that border by Israel’s attack, creating a humanitarian crisis within Egypt that would have been expensive and disruptive in many ways.

The worst case version of that concern didn’t materialize, but Egypt maintained its involvement in the peacemaking process, working with representatives from the US and Qatar, the former a staunch ally of Israel, the latter on good terms with Hamas, even housing some of their leaders, to keep negotiators from Hamas and Israel talking.

Throughout the war, these and other involved parties have generally supported a three-phase ceasefire proposal, which would begin with a ceasing of hostilities, followed by the release of all Israeli hostages being held in Gaza and a bunch of Palestinians being held in Israeli prison, and following that, if everything goes according to plan, the establishment of a permanent ceasefire, which would see Israel pulling its forces from Gaza and the beginning of a reconstruction process in the Strip—which again, has had many of its most populous cities leveled, completely unlivable, at this point, while almost all of its population has been living on the streets and in camps, without things like power, water, or electricity.

This plan sounds pretty straightforward, on its face, but the specifics are fuzzy, and the negotiation has thus been fraught, and any implementation is inherently riddled with diplomatic landmines and other perils. And this is part of why previous versions of this ceasefire agreement have been hamstrung. Back in mid-2024, Netanyahu halted progress on what seemed to be an acceptable to everyone version of the plan, saying he wouldn’t support any resolution that ended the war, only one that implemented a partial ceasefire, and that seemed to be a political move on his part. But throughout the negotiation process, there have been a lot of good faith concerns and disagreements, as well, so this has been a slow, frustrating grind for those involved.

Pressure from those aforementioned involved parties, though, and almost certainly Israel’s successes on the ground against all those Iranian proxies, and Iran, itself, seems to have led to the right combination of circumstances that even Netanyahu has indicated it’s probably a good time for a ceasefire.

There have been murmurs, unconfirmed at this point, that freshly reelected US President Trump pressured Netanyahu to move in this direction, and that this new pressure from the incoming administration, which has long been on friendly terms with Netanyahu’s people, combined with those other, existing pressures, might have been what sealed the deal; and is probably why all this has coincided with Trump’s recent inauguration.

Whatever the specifics of the genesis of this agreement, though, there was finally enough appetite for a three-stage ceasefire to come together, and the resulting plan was approved by Israel’s security cabinet, and then the government’s full cabinet, on January 17, 2025. The other parties were already on board, so this was enough to move the thing forward.

This plan, which was officially implemented a few days before this episode goes live, on January 19, 2025, will start with a 42-day pause in fighting that will see Israeli forces leave Gaza, pulling back to a buffer zone along the periphery of the Strip. This will allow civilians to return to what’s left of their homes, while also enabling the import and distribution of a whole lot more aid deliveries, which have been hampered by those Israeli forces up till this point.

There will be a complete ceasefire from this point forward, if everything goes according to plan, and a bunch of hostages will be released—33 Israeli civilians and female soldiers freed by Hamas, and some larger number of Palestinian prisoners held by Israel released, in exchange, a portion of that total number released each week at regular intervals.

Shortly after the first stage’s implementation, the Rafah crossing that divides Gaza and Egypt will also be reopened to allow sick and wounded people to leave the Strip, though it’s not clear at the moment if control of that crossing, which is currently held by Israeli forces, will be returned to the Palestinians soon, at a later stage, or at all.

After that six week period, the second stage will focus on the exchange of the remaining Israeli hostages, alive and dead, and the release of a proportionate number of Palestinians prisoners; though prisoners who have been convicted of murder will be released to prisoners in other countries, rather than back into Gaza or the West Bank.

Israel would also completely withdraw from Gaza, at this point, though Israel’s cabinet hasn’t yet voted on this specific condition, and far-right members of that cabinet have said they’re not in favor of this, so it could end up being a sticking point.

This second stage currently has an unknown duration, which is another complexity that could ultimately trip things up, as an inability to agree upon the end of a stage could keep the next one from ever happening, without technically derailing the agreement as a whole.

The third stage, if and when we get there, could last a long time, even years, and it would include an exchange of the dead bodies of hostages and Hamas members that haven’t yet been returned, while also kicking off a three- to five-year reconstruction period that would see the Strip being rebuilt under international supervision.

This is also when some kind of Palestinian governance will need to be reestablished in the Strip. Though while many international players want the Palestinian Authority, which governs the Israeli-occupied West Bank, to retake control of Gaza—they governed the area previously, but were booted by Hamas back in 2007—Israel isn’t in favor of PA leadership being reintroduced to the region, so that’s another point of contention that could derail things before the whole of the peace process can play out.

The thing to watch, right now, is whether these first six weeks go as planned, with the first several dozen hostages successfully returned to their families by Hamas, and a far larger number of Palestinian prisoners released by Israel, in exchange.

There should be a full-on ceasefire for the duration of this process, and that ceasefire should become permanent along the way, with Gazan civilians able to move freely and return to their homes, throughout. About 600 truckloads of aid scheduled is to arrive each day, too, which is up from around 18 truckloads, pre-agreement. That should help stabilize the humanitarian catastrophe that’s been simmering on the ground for more than a year—though to be clear, this is a stabilization to still dire circumstances, not a return to anything close to normal for those afflicted.

From there, it’s a question as to whether Israel sticks to its agreement to limit its forces to the buffer zone, and whether the specifics of that pull-back, the negotiations for which have been scheduled for February 4, end up working for everyone, including those aforementioned hawks in Netanyahu’s cabinet.

We may also see Hamas unable to provide as many living hostages as claimed, which already happened once during that previous exchange back in November of 2023, which could disrupt this new exchange process, and possibly serve as justification for one side or the other to backtrack on promises made and conditions to which they’ve committed.

So it’s possible that things will go smoothly, that no one will be perfectly happy, but everyone will be generally satisfied—which is what tends to happen with a well negotiated ceasefire of this kind.

Israel seems to be in a good spot to lock in their winnings, basically, having hobbled their primary enemies in the region and apparently gotten away with committing some seemingly serious atrocities that have been condemned by all sorts of international bodies—those atrocities maybe swept under the rug as one more incentive to basically get them to stop, which is a benefit other victors in similar conflicts have historically enjoyed.

Hamas also seems to still exist, if in a far diminished form, and as soon as the ceasefire was implemented, they started fanning their people across Gaza, establishing a sort of police force—the message apparently being “we’re still here and in charge,” and they might be hoping this de facto governance will sway things in their favor, put control and the ability to strike Israel in the future back in their hands, no matter who the international community eventually decides should take official control of the region.

At the same time, it’s also possible that one side or the other might use this ceasefire as cover, doing what they need to do to keep it afloat and technically still in motion, while basically preparing for their next antagonistic effort against their enemies.

Other facets of this process, like what’s happening in the north, where the Lebanese government has insisted Israeli forces leave the southern portion of their country by January 26, could complicate things; Hezbollah has agreed, as part of this ceasefire plan, to pull its forces back to a point about 20 miles from the country’s border with Israel, but there are still weapons caches belonging to either Hezbollah or some other militant organization in that part of Lebanon, according to UN peacekeepers.

It’s possible that some small violation on some component of this larger plan, purposeful or not, could give one of the involved justification for perpetuating some aspect of this conflict; and that’s true now, at the very beginning, but it’s also true later on, even after a permanent ceasefire has technically been signed, and full-on war has officially stopped.

Show Notes

https://www.timesofisrael.com/these-are-the-33-hostages-set-to-be-returned-in-phase-one-of-the-gaza-ceasefire/

https://apnews.com/article/gaza-ceasefire-negotiations-mediators-3a646fe5606d87db767e8a434f7a5f74

https://www.nytimes.com/2025/01/16/world/middleeast/israel-gaza-strikes-ceasefire.html

https://www.aljazeera.com/news/2025/1/15/what-do-we-know-about-the-israel-gaza-ceasefire-deal

https://www.theguardian.com/world/2025/jan/19/how-will-the-gaza-ceasefire-and-hostage-deal-work

https://responsiblestatecraft.org/gaza-ceasefire-2670859688/

https://www.propublica.org/article/biden-blinken-state-department-israel-gaza-human-rights-horrors

https://jacobin.com/2025/01/ceasefire-deal-gaza-israel-hamas/

https://www.nytimes.com/2025/01/18/world/middleeast/israel-gaza-ceasefire.html

https://www.wsj.com/world/middle-east/shattered-homes-uncertain-fates-israels-hostage-families-anxiously-await-reunion-865cc923

https://www.nytimes.com/2025/01/17/world/middleeast/gaza-returning-home-after-war.html

https://www.nytimes.com/live/2025/01/19/world/israel-hamas-gaza-ceasefire#heres-what-to-know-about-the-cease-fire

https://www.aljazeera.com/news/2025/1/18/israel-must-withdraw-from-lebanon-by-january-26-deadline-president-aoun?traffic_source=rss

https://apnews.com/article/israel-cia-fbi-telegram-eb0215277fc5f521f9ee2efa4da70adc

https://www.bbc.com/news/articles/cy5klgv5zv0o

https://en.wikipedia.org/wiki/Israel%E2%80%93Hamas_war

https://apnews.com/article/israel-palestinians-hamas-war-news-01-09-2025-ffae654d619e8e848e2ceda8576e8fe5

https://www.aljazeera.com/news/2025/1/18/iran-russia-analysis-syria-setback

This week we talk about the Pacific Palisades, Hurricane Katrina, and reinsurance.

We also discuss developed property values, arsons, and the cost of disasters.

Recommended Book: The Data Detective by Tim Harford

Transcript

Natural disasters, whether we’re talking about storms or fires or earthquakes, or some combination of those and other often related issues, like flooding, can be incredibly expensive.

This has always been true, both in terms of lives and material damage caused, but also in terms of raw currency—the value of stuff that’s destroyed and thus has to be rebuilt, replaced, or in some rare cases partitioned off so that similar things don’t happen in the future, or because the space is just so irreparably demolished that it’s not cost effective to do anything with the land, moving forward.

The four most expensive natural disasters that we’ve been able to tally—so this doesn’t include historical disasters that are far enough back that we can’t really quantify the damage, due to an inability to directly compare, or insufficient data upon which to base such quantification—the top four that we can line up against other such disasters and compare the numbers for are all earthquakes.

The earthquake in Japan in 2011 that, in addition to causing a lot of damage unto itself, also caused the disaster at the Fukushima nuclear plant tops the list, with a cost at the time of around $360 billion, which would be nearly $490 billion in today’s dollars.

The second most expensive natural disaster is also an earthquake in Japan, this one hitting a region called Hanshin in 1995, causing about $200 billion worth of damage in mid-90s money, which would be about $400 billion, today, and the third was an earthquake not too long ago, the 2023 quake that struck along Turkey and Syria’s border, causing something like $160 billion in damage.

The fourth costliest natural disaster hit China in 2008, causing around $130 billion in damage, which is about $184 billion in today’s money.

These disasters also caused a lot of casualties and deaths; about 20,000 people died in that most-costly, nuclear-incident-triggering quake, while nearly 88,000 were killed in that fourth-most-costly, Chinese one.

The Great Hanshin quake, in comparison, lead to somewhere around 6,000 deaths: which is still just a staggering human loss, but it’s an order of magnitude less than in those other comparable disasters; which hints at the trend we see with these sorts of events—the scale of wounded and killed doesn’t necessarily correlate with the scale of costs associated with damaged and destroyed infrastructure and other assets.

The costliest natural disaster in US history, as of the first week of 2025, at least, was Hurricane Katrina back in 2005, which all but destroyed the city of New Orleans and much of the surrounding area, causing around $125 billion in damage, which is equivalent to about $195 billion, today, but it only led to around 1,400 deaths: again, all of those deaths absolute tragedies, and any disaster that causes that many deaths is an historical event. But looking at the raw numbers, that’s a shockingly low figure compared to the sum of the monetary damages tallied; it’s actually remarkable as few people died as they did, looking at this storm and it’s impacts through that lens.

What I’d like to talk about today is another natural disaster, this one ongoing as I record this, that looks primed to take the record of most-costly, in terms of money, US natural disaster from Katrina, and some of the implications of this disaster.

—

Part of why disasters in the US, natural or otherwise, tend to result in fewer fatalities than those that occur elsewhere is that the US is a very wealthy country with relatively high-quality and widely dispersed infrastructure.

There are quibbles to be voiced about that claim, as many recent reports indicate that said infrastructure isn’t terribly well maintained, and that the country’s healthcare setup and relatively low pay and support for the sorts of people who save lives and rescue victims in the midst of such disasters raise questions about how long this will continue to be the case; some of these high-quality systems are somewhat fragile, in other words, and won’t always perform at the level they arguably should.

That said, in general, when need be, US government institutions—federal and regional—are capable of throwing money at issues until they mostly go away, and they have a lot of decent resources to leverage when need-be, as well. Americans in general also have reasonable amounts of resources to call upon, on average at least, when they need to flee town and stay elsewhere for a while until a storm subsides, for instance.

This is all on average, and we tend to see the gaps in that generality when disasters hit, and Katrina is a perfect example of this disaster illuminated dichotomy, as a lot of the country’s least well off people, who have arguably been let down by the system and their government in various ways, were unable to do what everyone else was capable of doing, and were thus stuck in ramshackle and dangerous accommodations, and in some cases weren’t rescued because of the nature of the infrastructure that was meant to help protect them, but which was ultimately incapable of doing so. Other people were shuttled by those entities to other parts of the country while the disaster was being handled, and some were never brought back—it was all a pretty big scandal.

Looking at the averages, though, the US tends to experience disasters that are more expensive in terms of money than lives because there’s more costly infrastructure in place, more valuable assets owned by pretty much everyone, compared to many other nations around the world, at least, and folks are generally capable of getting out of the way of stuff that might kill them—at least when we’re talking about things like storms and fires.

Case in point is the ongoing, as of the day I’m recording this, jumble of wildfires that are menacing, and in some cases demolishing, parts of the Greater Los Angeles area in Southern California.

As of the day I’m recording this, a day before this episode goes live, there are two primary fires still spreading, designated as the Eaton and Palisades fires, those names based on the regions in which they started to flare out of control, and several smaller ones called the Kenneth, Hurst, and Lidia fires.

The Palisades fire is currently the largest, having burned about 24,000 acres, followed by the Eaton, which has consumed around 14,000 acres. The Kenneth, Hurst, and Lidia fires have burned around 1,000, 800, and 400 acres, respectively.

That’s…not huge. Tens of thousands of acres is a decent sized plot of land, definitely, but for comparison, the Smokehouse Creek Fire that burned through parts of Texas and Oklahoma in 2024, and which became the largest wildfire in Texas history, consumed more than 1,100,000 acres.

The Park Fire, which plagued Northern California in mid-2024, is the state’s largest-ever arson-caused fire, and it consumed nearly half a million acres.

So a total of just of 40,000 acres or so for this new collection of fires is piddly, within that context.

The difference here is that both of those other fires consumed mostly, though not entirely, undeveloped land. And such land, while not value-less, is not the same kind of asset, in terms of dollars and cents, as heavily developed, with homes and businesses and electrical cables and roads and other such infrastructure, land tends to be.

These new, Southern California fires are smaller than those other, big-name wildfires, then, but they’re also consuming some of the most expensive real estate, and the properties and other assets build atop that real estate, in the world.

As of right now, the Kenneth and Lidia fires are completely contained, and the Hurst is getting there. The Eaton and Palisades fires, the two largest of the group, are still mostly uncontained, however, due in part to wild and dangerous winds that are making containment efforts difficult, in some cases preventing aerial efforts, and in others making conditions extra risky for people on the ground, due to the dynamic and quick-moving nature of things.

Given all of this, and again, given that these fires are burning homes worth tens of millions of dollars, located on coastal land that’s in some case worth around the same, it’s perhaps no surprise that analysts are already projecting that these fires could cause something like $50 to $150 billion in economic losses; and for comparison, the aforementioned Camp Fire in Northern California, which also consumed some fairly expensive homes and real estate, in addition to the undeveloped park land it consumed, only tallied about $30 billion in damage, all told, while the fires that hit Hawaii in 2023 added up to just $5.7 billion.

Of that $50-150 billion total, it’s estimated that around $20 billion will be covered by insurance, which represents a staggering loss for those without any, or without the proper insurance, but also potentially represents a huge loss for residents of California, as the state has an insurance of last resort scheme called the FAIR Plan, which is a privately run, but state-created entity that serves those who can’t find insurance via conventional, private insurers. And often, though not always this means those customers are in areas that are too expensive or too risky for traditional insurance companies to operate in.

In practice, that usually means insurers of last resort have a portfolio full of risky bets, and the plans they offer are more expensive than usual, and tend to provide less coverage and benefits than the conventional stuff.

In these sorts of situations, though, we have a whole lot of risky bets than have suddenly come up snake eyes, this FAIR Plan suddenly having to pay out billions of dollars to their customers in these risky areas. And between 2023 and 2024, the number of homes in the very expensive Pacific Palisades area, which is high-risk for wildfires, nearly doubled to around $6 billion of covered assets in that zip code, alone. It’s been estimated that the plan could have something like $24 billion in total losses from this cluster of ongoing fires.

The FAIR Plan isn’t government-funded: instead, if it runs out of money because of high levels of payouts, private insurance companies foot the bill, which will place further strain on those insurance companies, which are already expected to be staggered by losses across the region, but also then raises insurance prices for everyone in that area, moving forward, which could further inflate expenses for the state’s tens of millions of residents, while also possibly incentivizing businesses to move elsewhere, which would reduce taxflows to state coffers, and over time cause even more financial problems.

Reinsurance claims could muddle some of this math—reinsurance being basically insurance plans for insurance companies, bought from other, specialized insurance companies—as sufficient reinsurance coverage could help the FAIR Plan, and other insurers operating in these areas, weather the storm without being forced to raise prices excessively. But those companies, too, might then raise their reinsurance rates substantially, and those increases would then ripple across this same economic landscape.

Lots of potential long-term financial damage, either way, on top of the assets lost and damage caused directly, and of course, the human losses, which as of the day I’m recording this, totals 24 people confirmed killed, dozens of people missing, and a still unquantified number of injuries and lives completely, perhaps permanently disrupted or upended.

This whole situation—these fires—are complicated by many factors.

The climate is one, as 2024 was the hottest year on record, the first one we’ve experienced, as a species, above that now-famous 1.5 degrees celsius-beyond-pre-industrial-levels milestone. That figure will fluctuate day to day and even year to year due to all sorts of variables, but the big picture here is that the global water cycle has changed because global average temperatures have been nudged upward, and that’s causing a lot of upsets to local infrastructure and ecosystems that have always, since we’ve been here, at least, relied on that cycle functioning in a certain way, within a certain spectrum of operation.

Now that we’ve defied that spectrum, we’re finding ourselves with more extreme disasters of all kinds, but also more extreme and dangerous and damaging and deadly repercussions from those disasters, because the things we did to ameliorate them previously no longer work the same way, either.

So California, especially this part of California, has been even drier than usual, and the way the state used to prevent the spread of wildfires no longer works the way it used to work; a climactic issue compounded by issues with the systems we’ve clung to, despite the problems they’re meant to address having evolved substantially since they were originally developed and deployed.

This situation is also complicated by the fact that southern California, and especially the LA area, is a hotbed for global entertainment, and that means a lot of wealth concentration.

Lots of people scrambling to buy and build homes with beautiful coastal views, and the fact that these areas are high-risk for wildfires and increasingly other disasters, as well, doesn’t really matter, because rich people want to be in this area, around all this activity and wealth, and it’s generally understood that wealth can make you immune to these sorts of things, at least most of the time.

That immunity is no longer such a given, and that high concentration of expensive assets means that even a relatively small fire can cause a heck of a lot of damage in a relatively short time.

The same general collection of properties also means this region has a lot of landmarks that are at high-risk of destruction, and which are increasingly expensive to maintain and protect and repair, and it means the world is watching, to a certain degree—as celebrities flee their homes and influencers report the beat-by-beat of their evacuations—which in turn means there’s plenty of incentive to spread misinformation, either out of a desire to participate in the situation, or because of honest ignorance, or for political and ideological reasons: wanting to paint the local governance as incompetent, for instance.

At the moment, folks in the area are suffering from periodic power outages, largely due to local utilities shutting down some of their service areas in order to avoid starting new fires, their power cables and high winds sometimes sparking such things even in less pressure-cooker-like moments. And the air quality is absolutely abysmal, leading to localized health issues.

Some areas have run out of water, apparently due to issues with reservoir infrastructure, and one of the two firefighting planes the local authorities have been using to douse the fires when the wind conditions allow has been grounded for repairs, after colliding with an illegally flown drone, the operator of which was apparently a paparazzi trying to capture photos of celebrity homes, either being consumed by fire or somehow avoiding such a fate.

Again, this is a fast-moving story, and a lot is changing day by day, but at the moment it’s looking like this could become the most expensive natural disaster in US history, and while local authorities are making progress in halting these fires’ spread, the damage that’s been done has already been substantial, and could have a lot of knock-on effects, for individuals and for the state’s and country’s economy, for years to come.

Show Notes

https://en.wikipedia.org/wiki/Park_Fire

https://en.wikipedia.org/wiki/Smokehouse_Creek_Fire

https://www.washingtonpost.com/business/2025/01/09/los-angeles-wildfire-economic-losses/

https://en.wikipedia.org/wiki/California_FAIR_Plan

https://www.nytimes.com/2025/01/08/climate/california-homeowners-insurance-fires.html

https://www.sfchronicle.com/california-wildfires/article/fair-plan-insurance-losses-20025263.php

https://www.nytimes.com/interactive/2025/01/08/weather/los-angeles-fire-maps-california.html

https://www.wsj.com/finance/wildfire-insurance-homeowners-costs-3889531f

https://www.newyorker.com/news/the-lede/the-insurance-crisis-that-will-follow-the-california-fires

https://archive.ph/Inso5

https://www.npr.org/2025/01/09/nx-s1-5252837/will-there-be-enough-money-to-pay-out-insurance-claims-from-the-la-wildfires

https://www.washingtonpost.com/climate-environment/2025/01/09/california-wildfire-palisades-homeowners-insurance/

https://arstechnica.com/health/2025/01/public-health-emergency-declared-amid-las-devastating-wildfires/

https://apnews.com/article/los-angeles-wildfires-southern-california-c5826e0ab8db965cb2814132ff54ee6f

https://apnews.com/video/fires-wildfires-los-angeles-los-angeles-area-wildfires-california-574351467d2142ad958c212a0413ad96

https://www.reuters.com/world/us/san-fernando-valley-under-threat-los-angeles-fire-rages-2025-01-12/

https://www.wsj.com/us-news/los-angeles-wildfires-social-media-rumors-44d224b4

https://www.wsj.com/style/los-angeles-hollywood-fires-celebrities-homes-paris-hilton-d1e3a7de

https://www.vulture.com/article/hollywood-paparazzi-los-angeles-fire.html

https://www.theguardian.com/us-news/live/2025/jan/12/california-fires-death-toll-expected-rise-ucla-threatened-winds-latest-updates

https://www.reuters.com/business/environment/2024-was-first-year-above-15c-global-warming-scientists-say-2025-01-10/

https://www.nytimes.com/2025/01/09/us/los-angeles-fire-water-hydrant-failure.html?unlocked_article_code=1.oE4.OUQs.lcdCoSSeQBtL

https://www.axios.com/2025/01/11/los-angeles-fire-insurance-losses-billions

https://www.latimes.com/california/story/2025-01-08/palisades-fire-devastation-scope

https://www.washingtonpost.com/weather/2025/01/11/los-angeles-fires-california-updates-palisades-eaton-kenneth/

https://www.latimes.com/california/story/2025-01-09/drone-collides-with-firefighting-aircraft-over-palisades-fire-faa-says

https://www.nytimes.com/2025/01/11/us/los-angeles-calfire-firefighters.html

https://www.axios.com/2025/01/12/la-fires-climate-change-drought-extreme-weather

https://www.axios.com/2025/01/12/california-wildfires-loss-mental-health

https://www.nytimes.com/live/2025/01/12/us/los-angeles-fires-california

https://www.nytimes.com/2025/01/12/us/trump-los-angeles-fire-newsom-bass.html

https://en.wikipedia.org/wiki/Hurricane_Katrina

https://en.wikipedia.org/wiki/2008_Sichuan_earthquake

https://en.wikipedia.org/wiki/2023_Turkey%E2%80%93Syria_earthquakes

https://en.wikipedia.org/wiki/Great_Hanshin_earthquake

https://en.wikipedia.org/wiki/2011_T%C5%8Dhoku_earthquake_and_tsunami

https://en.wikipedia.org/wiki/List_of_disasters_by_cost

This week we talk about Luigi Mangione, VAW attacks, and mass shootings.

We also discuss stochastic violence, terrorism, and Cybertrucks.

Recommended Book: Some Desperate Glory by Emily Tesh

Transcript

The terms “Lone Wolf,” “Lone Wolf Actor,” and “Lone Wolf Killer” are interchangeably used in many countries—though most commonly and prominently in the United States—to describe someone who commits a mass-killing or other mass-casualty event, but who is not part of an organization like a terrorist group or other criminal network like a gang.

The term is hotly contested in the scholarly world, as it’s applied loosely and inconsistently, and the definition varies somewhat by location, government, law enforcement entity investigating said killings, and the press reporting upon it. But in general, to be defined as a mass-casualty event or mass-killing, a collection of murders must occur in public—so it can’t be a person killing their family at home, for instance—it must involve at least four victims—so someone killing or injuring three strangers in a public place will typically not be categorized in this way—and it must not occur as part of another crime, like a robbery gone wrong, or as part of a larger conflict between two rival gangs.

Within this context of mass-killings and mass-casualty attacks, a lone wolf is someone who acts solo, the term originating with the concept of a wolf that has been separated from, or perhaps outcast from its pack.

Someone who kills a bunch of people at the instruction of a terrorist organization like ISIS, then, would not be considered a lone wolf, even if they committed the act without any direct aid from that group; though this definition is wobbly even in that regard, as someone who takes inspiration from a group like ISIS, committing a mass-killing to support that group’s cause, but not directly connected to the group, might be labeled a lone wolf, or not. And there’s no hard-set rule as to which definition is correct.

This was a somewhat common issue back in the late-20th century, when many so-called lone wolf terrorists were committing acts of violence in support of anarchist ends, but the anarchist groups from which they derived their inspiration, and in some cases with which they collaborated, were leaderless by nature—so it couldn’t really be said that they were instructed to carry out these acts, they were just inspired by these fellow ideological travelers, and that made determining whether they acted on their own behest or not a tricky and perhaps impossible undertaking; a lot of it is semantics.

Also confounding the simple categorization of such killers and attacks is the concept of stochastic terrorism, which is a type of violence that is almost always political or ideological in nature, as opposed to being revenge-driven or otherwise personal, and it’s generally incited by someone with a public persona—a politician or other leader—who creates an environment in which violence is more likely to occur, that violence seemingly random, but on average directed in a specific direction.

So a politician who says something like “Man, people from the opposing party really believe some horrible stuff, I wouldn’t be surprised if something happened to them, considering how evil they are,” while at the same time stoking the flames of potential violence throughout the population by increasing animosity between political parties and maybe even religious groups, might be aiming to spark stochastic terror that would benefit them and their ambitions.

By riling up their base in this way, by sowing the seeds for potential attacks against their perceived enemies, violence in their favor, aimed at those enemies, is more likely to happen, but in a way that’s deniable for them—just a random act of ideological murder that they can denounce, despite arguably having asymmetrically instigated it.

Is stochastic terror an example of planting seeds for violence that makes the resultant killings something more like directed attacks, and therefore not lone wolf in nature, then? Or are all lone wolves arguably inspired by something they’ve learned or experienced or been told, and thus arguably stochastic in nature—no direct guidance or instruction, but still inspired by someone or something, somewhere along the way?

What I’d like to talk about today are three instances of recent supposedly lone wolf attacks, and why some experts are predicting we’ll see more such attacks, especially but not exclusively in the US, in the coming years.

—

There were nearly 500 officially recognized mass-shootings in the US in 2024—and again, that means 4 or more people injured or killed in public, and not as part of another crime being committed.

That’s down from previous years, the preceding four of which have each had more than 600 mass shootings, and on average a little less than 10 people are killed in these shootings—though that figure is nudged upward by the largest of these mass killings, like one in Las Vegas in 2017 that saw 60 people killed and more than 800 wounded, many in the resulting stampede, by a 64-year-old seemingly lone wolf gunman who fired on an open-air music festival from the 32nd floor window of a nearby hotel.

Gun homicides in the US are rampant beyond mass-killings: there were about 21,000 murders committed with guns in the country in 2021, alone—and notably, self-inflicted gun deaths, suicides using these weapons, eclipse that number, tallying more than 26,000 that same year.

That means more than 50 people are killed by guns in the US every single day, and about 4 out of every 5 murders are committed using guns in the country; which makes sense, as guns are very effective at what they’re meant to do, which is killing something, and there are a lot of guns in the US: about 120 of them per 100 people, as of 2018.

And to be clear, that doesn’t mean everyone owns a gun: that average is driven sky-high by the gun-enthusiasts who tend to buy a lot of the things, though gun ownership has continued to increase in scope in recent years, as political and economic uncertainty, especially in areas where perception of crime levels, if not always actual elevated crime levels, increases, tends to drive more widespread gun sales.

Given all of that, it’s maybe not a huge surprise that many apparent lone wolf attacks in the United States are committed using firearms; sometimes assault rifles, sometimes guns that have been augmented using bump-stocks or similar add-ons to make a normal gun into basically an assault rifle, and sometimes just using a pistol, which can be easily pocketed and carried around pretty much everywhere in this country.

On December 4, 2024, the CEO of UnitedHealthcare, which is part of the largest health insurance company in the United States, UnitedHealth Group, Brian Thompson, was gunned down in front of the Midtown Manhattan Hilton Hotel.

The alleged killer, who was later identified by law enforcement officials as Luigi Mangione, was captured on nearby CCTV cameras, was wearing a hoodie and an expensive backpack while shooting Thompson, and used a pistol with a suppressor—a silencer—to shoot him multiple times, the bullet casings left behind inscribed with the words Delay, Deny, and Depose; terms that have been associated with the US health insurance industry for legal tactics they lean on in order to pocket more money, allegedly at the expense of their customers who have their claims denied or long-term delayed, in some cases leaving them without the care they require, and in some cases leaving them in crippling debt following a necessary medical procedure that the insurance company says they won’t pay for.

The response to killings of any kind, even in a gun-happy country like the US, tends to be fairly grim and sad; the endless mutterings of “thoughts and prayers” by politicians and other public figures has become so common and toothless as to be near-satire at this point, but generally the tone is antagonistic toward whomever committed the killing, before then swinging toward calls for more security and policing if you’re on the political right, and more gun regulation if you’re on the political left. And that’s generally where we leave things until the next headlines-capturing shooting; and we typically, unfortunately, don’t have long to wait.

Thompson’s murder, though, was almost immediately met with celebration across the political spectrum; working class folks, Democrats and Republicans and everyone in between and on the furthest political extremes basically muttering about how it serves him right, before realizing everyone else was muttering the same thing, and that led to outright enthusiasm, especially online, and even calls for more of the same across the social media landscape—many normal people doing the politician and ideologue thing by basically posting their hopes that someone will knock off other CEOs as well, seemingly aiming to spark more stochastic violence in their favored direction.

The wealthy and especially the CEO class were horrified at this response, perhaps understandably, and there was pushback from mainstream journalistic and political entities across the board, with lots of tut-tutting and finger-wagging at anyone who dared celebrate what looked to be the cold-blooded murder of another human being.

But the nature of American healthcare and especially health insurance being what it is—massively imperfect at least, and by some assessments borderline abusive or even outright evil—this was seen by many as just desserts for someone who himself had committed millions of dollars worth of fraud and gotten away with it, and who was running UnitedHealthcare in such a way that it denies more claims than any of its peers, which in turn has allowed itself to massively enrich itself and its shareholders at the expense of its customers.

There were many cries of “serves him right,” then, alongside some requests that other CEOs be next; many of these requests couched in memes and jokes, but also seemingly earnest.

The nature of the alleged killer, who was eventually shown to be a good-looking young man of privilege who had maybe suffered under the auspices of the American healthcare system, due to chronic ailments and an insurance system that didn’t even serve someone like him, who grew up with substantial advantages, further fanned those flames, and as of the day I’m recording this he’s in custody, has pleaded not guilty, and is facing eleven state and four federal charges, including first-degree murder and a terrorism charge, the former of which could lead to the death penalty.

Just shy of a month later, in the early morning hours of January 1, 2025, a new year’s celebration on the well-know and well-traversed, and on that night, incredibly crowded Bourbon Street in New Orleans was attacked by a man in a large pickup truck, who plowed the vehicle into a crowd of revelers, driving at high-speed across three blocks that were partitioned-off for the celebration.

The driver was apparently trying to hit as many people as possible, and then, after crashing into a utility vehicle, he stepped out of the truck and started firing a gun into the crowd.

Police fired back at him, but he was wearing body armor, and two of them were injured before they managed to kill him, recovering an assault rifle and a semi-automatic pistol from his body. They also found a pair of explosive devices in coolers he had planted around the area before the attack, and further investigation led to the discovery of more bomb-making materials where he was staying in New Orleans.

At least 35 people were injured and 14 people were killed in the attack, alongside the killer, who was later identified as 42-year-old Shamsud-Din Jabbar: an American-born Army veteran and Texas resident who had apparently been recently radicalized, possibly by online content posted by ISIS, and who had posted videos pledging his allegiance to the group mere hours before he drove into the crowd, an ISIS flag adorning the vehicle.

More guns in this attack, then, but much of the damage was caused by the truck, and similar so-called “vehicle as a weapon,” or VAW attacks have been committed around the world in recent years, raising concerns especially in places where firearms are harder to come by, though also at large, open-air events where vehicles might cause more deaths and injuries in a short period of time than even an assault rifle, as seemed to be the case here.

This attacker seemed to be self-radicalized, based on testimony from his friends and family, who were shocked at the change in his personality and expressed beliefs. The FBI has said they’re pretty confident he acted alone, though they’re looking into recent trips he took to Egypt and Canada, in case he met up with someone from ISIS or a similar group, while traveling.

And apparently while he initially planned to kill his family—he’s had several divorces that led to financial problems, due to many child support payments that exceeded his means—he didn’t believe killing his family would have provoked enough of a response to spark a “war between the believers and the disbelievers.” Jabbar was brought up Muslim but left the faith for years, before apparently adopting a more intense and violent reinterpretation of it just recently, and that seemingly helped him justify and perhaps even inspired these acts.

This has been called a lone wolf attack, then, but it was apparently heavily influenced by ISIS ideology, despite Jabbar possibly never having been in contact with anyone from that group.

Just a handful of hours later, that same morning, at 8:49 January 1, 2025, a Tesla Cybertruck that was parked outside the front lobby of the Trump International Hotel in Las Vegas exploded—its occupant apparently having died from a self-inflicted gunshot wound to the head right before a bunch of fireworks and gas canisters placed in the trunk were detonated.

That occupant was Matthew Alan Livelsberger, who was also American-born, and like Jabbar, had been in the US military, though Livelsberger was an active-duty Special Forces soldier from Colorado who was on leave at the time.

The blast didn’t kill anyone, and while it hurt a few bystanders, no one was seriously injured. But the intention, according to two letters recovered from his phone by the FBI, was apparently to make a political statement related to alleged clandestine US military operations, and advanced technologies the US and China allegedly secretly possess; though he was also apparently in the midst of a serious mental health crisis, including significant PTSD episodes and what might have been paranoid delusions.

The vehicle also contained an assault rifle and two pistols, though none of these weapons were used, as while Livelsberger was seemingly intent on escaping across the Mexican border following the attack, based on what he said in those aforementioned letters, he seemingly decided to kill himself instead—which may support the assertion that this was primarily, if not exclusively, a mental health crisis issue.

Livelsberger also apparently had family issues, due in large part to his support of president-elect Trump and his family’s opposition to that support, and he was apparently suffering from untreated depression, that lack of treatment possibly the result of stigma toward such things within the military, which sometimes results in people not getting treatment that they might benefit from, because they worry doing so will see them sidelined by their superiors.

A manifesto penned by Livelsberger that was sent to a retired Army Intelligence officer claims that he was being monitored by the military because of his knowledge of war crimes and those aforementioned military advanced technologies, and that he didn’t intend to self-harm, the divulgence of which has led to some conspiracy theories about this not having been a suicide.

That said, this attack is being investigated as potential terrorism, and while it was initially being explored as part of a larger wave of such actions, since that attack in New Orleans happened just hours earlier, and both attackers used the same online car rental service to procure the vehicles they were driving, investigators have since indicated they don’t believe these attacks were connected.

Interestingly, Livelsberger’s letters also criticized income inequality, though with a politically conservative bent, basically saying that the country had become too liberal and effeminate, and that Trump, Elon Musk, and Robert Kennedy Jr needed to take control and make the US more masculine so that it could compete against entities like China, Russia, and Iran.

Experts on ideological violence and political fracturing have warned that we may see more lone wolf and lone wolf-esque violence in a more polarized society, in which people are less likely to consider those on the opposite side of the aisle to be people they disagree with, and more likely to think of them as bad or evil or even subhuman, which makes violence more thinkable.

That’s not ideal, as these sorts of attacks are difficult to prevent, their solo nature meaning there’s no network to track and pluck apart, nothing to infiltrate and fewer easily accessible data points to aggregate and in which to recognize a pattern. Lone wolf attackers tend to cause less damage than groups can, then, but they’re often almost invisible, to the organizations that hope to stop them, anyway, right up till the moment they start killing and injury people.

We’re also entering an era in which trust in authority has degraded substantially, new technologies have made the research, hardware procurement, and implementation of such attacks a lot more attainable to more people, which means folks suffering from different sorts of psychological or physical torments, or those who simply have strong opinions and a lot of perceived enemies, are more likely to be able to act on that confusion or those hatreds, in some cases at a moment’s notice, and in many cases without anyone beyond their immediate friends and family recognizing that something might be up.

We may be entering a period of heightened threat, then, in the US especially, because of the number and wide distribution of highly effective weapons throughout the population, and because of the period of political polarization and animosity we seem to be wading through, but also throughout the rest of the world, to some degree at least, because of those same political and ideological factors, and because of how big and weapon-like vehicles have become, and how relatively easy it is to get one’s hands on information that allows for the construction of things like bombs and the technologies required to 3D-print and otherwise manufacture deadly implements of all shapes and sizes.

Show Notes

https://en.wikipedia.org/wiki/Luigi_Mangione

https://www.vox.com/politics/390438/luigi-mangione-healthcare-shooting-ghost-gun

https://en.wikipedia.org/wiki/Killing_of_Brian_Thompson

https://en.wikipedia.org/wiki/2017_Las_Vegas_shooting

https://www.bbc.com/news/world-us-canada-41488081

https://en.wikipedia.org/wiki/2025_New_Orleans_truck_attack

https://www.bbc.com/news/articles/c205ek63433o

https://www.nytimes.com/2025/01/03/us/new-orleans-victims-truck-attack.html

https://en.wikipedia.org/wiki/Trump_International_Hotel_Las_Vegas_Tesla_Cybertruck_explosion

https://www.nytimes.com/2025/01/04/us/matthew-livelsberger-las-vegas-cybertruck.html

https://www.nytimes.com/2025/01/05/us/new-orleans-attack-travel.html

https://www.nytimes.com/2025/01/04/us/new-orleans-attack-shamsud-din-jabbar-isis.html

https://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=1257&context=nulr_online&preview_mode=1&z=1519320539

https://en.wikipedia.org/wiki/Stochastic_terrorism

https://en.wikipedia.org/wiki/Lone_wolf_attack

https://www.ojp.gov/ncjrs/virtual-library/abstracts/lone-wolf-terrorism-america

https://journals.sagepub.com/doi/10.1177/1088767917736797

This week we talk about Yoon, martial law, and impeachment.

We also discuss the PPP, chaebol, and dictators.

Recommended Book: Starter Villain by John Scalzi

Transcript

In the wake of WWII, Korea—which was previously held by the recently-defeated Japanese Empire—was split into two countries, the north backed by the Soviet Union and the south backed by the United States and its allies.

North Korea had a guerrilla fighter and staunch Soviet-style communism activist, Kim Il Sung, placed at the head of its new government, while South Korea was to be led by a longtime local politician named Syngman Rhee, who had run the country earlier, from 1919 until 1925, at which point he was impeached, and then again in 1947-1948, as head of the country’s post-war provisional government.

Rhee was a hardcore Korean independence activist during a period when the Japanese were clamping down on their mainland holdings and doing away with anyone who caused trouble or sparked anti-colonial protests, so he spent some time in exile, in China, returned to the US, where he was educated, for a bit, and then the US military returned him to Korea to run that provisional government once the dust had settled and the Japanese had been ousted from the area.

Rhee was an ideal representative in the region by American standards, in some ways, as he was vehemently anti-communist, even to the point of killing and supporting the killing of something like 100,000 communist sympathizers during an uprising on South Korea’s Jeju Island. He was president when North Korea invaded, sparking the Korean War, and then refused to sign the armistice that would have formally ended the conflict in 1953, because he believed the only solution to the conflict between these nations was a military one, and he held out hope that the South would someday conquer the North and unify Korea as a nation, once more.

Rhee then won reelection in 1956, and changed the country’s constitution to allow him to remain in office, getting rid of the two-term limit—which was not a popular move, but it worked, and he was able to run uncontested in 1960, because his opponent died of cancer in the lead-up to the election—though his opposition protested the results, claiming a rigged voting process, and this led to a huge movement by students in the country, which became known as the April Revolution; students were shot by police while protesting during this period, and that ultimately led to Rhee stepping down that same year, 1960.

So Rhee was a western-educated, christian conservative who was vehemently anti-communist, though also living in a part of the world in which an aggressive communist dictatorship recently invaded, and was threatening to do so again—so it could be argued his paranoia was more justified than in other parts of the world that had similar frenzied moments and governments during the cold war, though of course the violence against innocent citizens was impossible to justify even for him and his government; his authoritarian rule was brought to an end following that shooting of student protestors, and that left a power vacuum in the country, and South Korea saw 13 months of infighting and instability before a General named Park Chung Hee launched a coup that put him in charge.

Park positioned himself as president, and he did pretty well in terms of economic growth and overall national development—at this point the South was way behind the North in pretty much every regard—but he was also an out-and-out dictator who ruled with an iron fist, and in 1972 he put an entirely new constitution into effect that allowed him to keep running for president every six years, in perpetuity, no term limits, and which gave the president, so himself, basically unlimited, unchecked powers.

The presence of a seemingly pretty capable, newly empowered dictator helped South Korea’s economy, manufacturing base, and infrastructure develop at an even more rapid pace than before, though his nearly 18-year presidency was also defined by the oppression he was able to leverage against anyone who said anything he didn’t like, who challenged him in any way, and who spoke out of turn against the things he wanted to do, or the constitution that allowed him to do all those things.

In 1979, he was assassinated, and there’s still a lot of speculation as to the why of the killing—the assassin was in Park’s orbit, and was seemingly doing okay as part of that all-powerful government entity—but alongside speculation that it might have been planned by the US, in order to keep South Korea from developing a nuclear weapon, that it might have been the result of political jealousy, and that if might have been just an impulsive act by someone who was done being pushed around by a bully, it’s also possible that the perpetrator was a democracy activist who wanted to get a successful and long-ruling dictator out of the way.

Whatever the actual catalyst was, the outcome was more political upheaval, which by the end of the year, we’re still in 1979, led to yet another military coup.

This new coup leader was General Chun Doo-hwan, and he implemented martial law across the whole of the country by mid-year, as he ascended to the role of president, and he cracked down on democracy movements that erupted across the country pretty violently.

Chun held onto power for nearly 8 years, ruling as a dictator, like his predecessor, until 1987, when a student democracy activist was tortured to death by his security forces.

This torture was revealed to the country by a group of pro-democracy catholic priests in June of that year, and that sparked what became known as the June Democratic Struggle, which led to the June 29 Declaration, which was an announcement by the head of the ruling party—so the head of the party the dictatorial president belonged to, the Democratic Justice Party—that the next presidential vote would allow for the direct election of the president.

That party leader, Roh Tae-woo, very narrowly won the election, and his term lasted from 1988 until 1993; and during his tenure, the country entered the UN, that was in 1991, and his presidency is generally considered to be a pivotal moment for the country, as while he was technically from the same party as the previous ruler, a dictator, he distanced himself and his administration from his precursor during the election, and he abided by that previously enforced two-term limit.

By 1996, things had changed a lot in the country, the government fully recalibrating toward democratic values, and those previous rulers—the dictator Chun and his ally-turned-democratic reformer, Roh—were convicted for their corruption during the Chun administration, and for their mass-killings of pro-democracy protestors during that period, as well. Both were pardoned by the new president, but both were also quite old, so this was seen as a somewhat expedient political maneuver without a lot of downsides, as neither was really involved in politics or capable of causing much damage at that point in their lives.

In the years since, especially since the turn of the century, South Korea has become one of the world’s most successful economies, but also a flourishing example of democratic values; there are still some remnants of those previous setups, including the government’s tight ties with the so-called chaebol, or “rich family” companies, which were business entities propped up by government support, which were often given monopoly rights that other businesses didn’t enjoy, as part of a government effort to pull the country out of agrarianism back in the mid-20th century; companies like Hyundai, Samsung, and LG thus enjoy outsized economic power, to this day, alongside a whole lot of political influence in the country, as a result of this setup, which is a holdover from those earlier, dictatorial times.

But South Korea has generally erred toward rule of law since the late-1990s, even to the point of punishing their most powerful elected leaders, like President Park, who was accused of corruption, bribery, and influence-peddling, by removing her from office, then sentencing her to 24 years in jail.

What I’d like to talk about today, though, is a recent seeming abuse of power at a pretty staggering level in South Korean governance, and the consequences of that abuse for the country and for the abuser.

—

In March of 2022, Yoon Suk Yeol, a conservative candidate of the People Power Party, who was hoping to oust the incumbent Democratic Party from office, won the narrowest victory in South Korea history.

In his previous role as the chief of the Seoul Central District Prosecutor’s Office, Yoon was partly responsible for convicting former President Park for her abuses of power, and his public disagreements with President Moon, who appointed him as Prosecutor General of the country in 2019, led to his popularity in conservative circles, in turn leading to his ascension as a candidate in 2021.

Yoon ran on a conservative platform that’s become familiar in elections around the world in recent decades; basically deregulation paired with culture-war issues, like doing away with government support for gender equality and other often politically liberal efforts of that nature.

He won the election by less than a percentage point, and his tenure is office has not been favorably reviewed by democratic watchdogs, which have noted various sorts of corruption and democratic backsliding under his watch, and economic and policy analysts consider his administration to have been a somewhat ineffectual one.

Yoon’s tenure, like his candidacy, was also plagued by gaffes and seeming missteps.

He tried to raise the country’s maximum weekly working hours from 52 to 69, though he pulled back on this idea after a huge wave of backlash from young people.

He was also criticized for having just three women in his government, and two among his vice-ministerial level officials. He added two more after those criticisms, but one of them quit about a month after being appointed, following her attempt to implement massively unpopular school system revisions—and the entire government’s approval rating collapsed around this time, due to that proposed revision, which was criticized as being half-baked and nonsensical, but it was also partly the result of her ascension to the government in the first place, as she had a record of drunk driving and academic plagiarism; the president brought in a woman to placate the masses, basically, despite that woman being just a really, really bad choice for the position, which by some estimates further demonstrated his disdain for and ignorance about the whole conversation about women in government.

Yoon also tried to create an agency that would provide more oversight of the country’s police force, but this led to protests by police, who saw it as an attempt to take control of law enforcement and use it against the president’s enemies; the president’s office then worsened matters threatened to punish protesting officers.

By 2024, leading into the country’s parliamentary elections, Yoon’s government was incredibly unpopular with just about everyone, because of those and other decisions and statements and gaffes. Even his wife has been under investigation for accepting bribes and having undo influence on who takes positions of power, alongside comments she’s made about seeking revenge against people who say not nice things about her, including journalists.

The opposition swept that 2024 parliamentary election, which had the practical impact of making Yoon’s government something of a lame duck, unable to get anything done, because his party only controlled 36% of the National Assembly. He then boycotted the inaugural session of this new National Assembly, seemingly because he didn’t like the outcome, becoming the first President to do so since democracy returned to the country in 1988.

All of which leads us to what happened on December 3, 2024.

Late that night, President Yoon declared martial law, which would give him, as president, wartime powers to do all sorts of dictator-like things.

He said he declared martial law to unfreeze a frozen government that was paralyzed by his opposition: Assemblymembers had stymied a lot of his efforts to pass laws favored by his party and constituents, and had tallied a large number of impeachment efforts against people in his administration, while he, in turn, used more vetos than any other democratically elected president in the country’s history—so the executive and legislative branches were at a standoff, and this was freezing the government, so he says he declared martial law to basically get things done.

The opposition, in contrast, says his move was unconstitutional, and that he tried to launch a coup.

That latter claim seems to be backed by the fact that Yoon accused his political competition of collaborating with North Korean communists and engaging in anti-state activities, which he said were intended to destroy the country—this seems to be based, again, on the fact that they didn’t approve the stuff he wanted to get approved.

As part of this martial law declaration, he also declared a prohibition on all political activities and all gatherings of the National Assembly and local representatives, and he suspended the freedom of the press.

He apparently also ordered the arrest of many of his political opponents, alongside some people within his own party who might oppose him and his seeming power-grab.

Both parties, his own included, opposed this proclamation, and there were some dramatic standoffs following his announcement at 10:30pm local time, as protestors took to the streets and legislators gathered at the National Assembly Proceeding Hall, where they do their job, because members of the military were ordered to stop them; there are videos of these soldiers standing in the way of these politicians, trying to keep them from entering the building where they could vote to do away with the martial law declaration, and in some cases pointing assault rifles at them. The legislators didn’t backing down, and in a few cases wrestled with the soldiers while thousands of citizens protested behind them against the military action.

Eventually, the Assembly members made it inside and voted to lift martial law; this happened at 4:30am that morning. And over the next few days they began impeachment proceedings against the president, saying they would keep doing so until he resigned.

A bunch of people resigned from Yoon’s administration following his seeming attempt at a coup and, and on December 7, a few days later, he issued a public apology, saying that he wouldn’t try to do that again, though on the 12th he backtracked and defended his declaration of martial law, saying that he had to protect the country from these anti-state forces, accusing his opponents, once more, of being on North Korea’s side.

On December 14, Yoon was impeached and booted from office, following another, failed vote; his party sticking with him for a while, though seemingly distancing themselves from him, following his doubling-down on the “my political opponents are communists” stance.

The leader of his party the PPP, stepped down shortly after that successful vote, having changed his vote from being against impeachment to supporting it, saying basically that there was no other way to remove Yoon from office, and Yoon’s Supreme Councilmembers all stepped down, as well.

South Korea’s Constitutional Court will now have to decide, within the next six months, whether Yoon will be formally and permanently removed from office, or if he’ll be reinstated.

In the two previous instances of a president being impeached, the court has taken 2 and 3 months to make their decision, and they reinstated one president, while allowing the impeachment to stand for the other.

If Yoon is removed by the court, the country will have to elect a new leader within two months, and in the interim, the country’s Prime Minister, the number 2 person in the government, is serving as president; Yoon has been stripped of his powers.

Yoon has a broad swathe of immunity against criminal charges due to his position as president, but that doesn’t apply to rebellion or treason, which could apply in this case.

He’s been banned from leaving the country, but there’s a good chance if he tries, he won’t be stopped, due to a potential conflict between state security forces and presidential security forces—it would be a bad look to have them fight and maybe kill each other.

Yoon’s presence was requested by prosecutors over the weekend, but he didn’t show up to be questioned, and there’s a chance that if this happens again, him deciding not to show up and ignoring these requests, he’ll be arrested—though that same issue with presidential security fighting with police forces applies here, too, so it’s an open question what will happen if he just ignores the whole process and keeps claiming he did nothing wrong.

A preliminary court hearing date has been set for December 27, and though the court only has six of its total nine members at the moment, it has said it’s fine to move forward with an incomplete court, though the government has said they’ll likely be able to get another three judges approved by the end of December.

So things are complicated in South Korea right now, the former president disempowered, but seemingly refusing to participate in the proceedings that will help a new government form, if his dismissal is upheld by the court, that is, and that means the interim government is even more of a lame duck than he was, at a moment in which the world is very dynamic, both in the sense of geopolitics and North Korea becoming more active and antagonistic, and in the sense that economics and tech and everything else is roiling and evolving pretty rapidly right now; a new paradigm seems to be emerging in a lot of different spaces, and South Korea is in a terrible spot to make any moves in any direction, based on that—and that seems likely to remain the case for at least a few more months, but possibly longer than that, too, depending on how the court case plays out, and how the potential next-step election turns out, following that court case.

Show Notes

https://en.wikipedia.org/wiki/2024_South_Korean_martial_law_crisis

https://www.nytimes.com/2024/12/03/world/asia/south-korea-martial-law.html

https://www.yahoo.com/news/heres-whats-going-south-korea-213322966.html

https://www.washingtonpost.com/world/2024/12/03/martial-law-south-korea-explained/

https://apnews.com/article/south-korea-protesters-photo-gallery-yoon-b17f96063a2635ebc87f35ed9ab5ac5b

https://www.nytimes.com/2024/12/14/world/asia/south-korea-president-impeached-martial-law.html

https://www.nytimes.com/interactive/2024/12/04/world/asia/south-korea-impeachment-vote-president-yoon.html

https://www.nytimes.com/2024/12/13/world/asia/south-korea-protest-feliz-navidad.html

https://www.nytimes.com/interactive/2024/12/14/world/asia/skorea-yoon-timeline.html

https://apnews.com/article/south-korea-martial-law-yoon-impeach-6432768aafc8b55be26215667e3c19d0

https://www.reuters.com/world/asia-pacific/south-koreas-yoon-faces-second-impeachment-vote-over-martial-law-bid-2024-12-14/

https://www.theguardian.com/world/2024/dec/14/south-korea-president-yoon-suk-yeol-downfall-analysis

https://www.wsj.com/world/asia/south-korea-president-yoon-suk-yeol-impeached-49b0779c

https://www.washingtonpost.com/world/2024/12/14/south-korea-yoon-impeachment-vote/

https://english.hani.co.kr/arti/english_edition/e_national/1054103.html

https://en.wikipedia.org/wiki/Yoon_Suk_Yeol

https://www.nytimes.com/2024/02/01/world/asia/south-korea-first-lady-dior.html

https://www.economist.com/europe/2024/12/12/why-romania-cancelled-a-pro-russian-presidential-candidate

https://www.koreaherald.com/view.php?ud=20241215050041

https://www.bbc.com/news/articles/cx2pl4edk13o

https://www.cnn.com/2024/12/14/world/video/south-korea-yoon-second-impeachment-watson-cnntm-digvid

https://www.theguardian.com/world/2024/dec/15/south-korea-president-yoon-suk-yeol-reportedly-defies-summons-in-martial-law-inquiry

https://apnews.com/article/south-korea-yoon-martial-law-investigation-constitutional-court-8ec38d61f0ea5c48b3bd1f683b5e9c8d

https://en.wikipedia.org/wiki/Syngman_Rhee

https://en.wikipedia.org/wiki/South_Korea

https://en.wikipedia.org/wiki/Assassination_of_Park_Chung_Hee

https://en.wikipedia.org/wiki/Coup_d%27%C3%A9tat_of_December_Twelfth

https://en.wikipedia.org/wiki/Chaebol

This week we talk about coups, the Arab Spring, and Bashar al-Assad.

We also discuss militias, Al Qaeda, and Iran.

Recommended Book: The Algebraist by Iain M. Banks

Transcript

In the early 2010s, a series of uprisings against unpopular, authoritarian governments spread across the Middle East—a wave of action that became known as the Arab Spring.

Tunisia was where it started, a man setting himself on fire in protest against the nation’s brazenly corrupt government and all that he’d suffered under that government, and the spreading of this final gesture on social media, which was burgeoning at the time, amplified by the still relatively newfound availability and popularity of smartphones, the mobile internet, and the common capacity to share images and videos of things as they happen to folks around the world via social media, led to a bunch of protests and riots and uprisings in Jordan, Egypt, Yemen, and Algeria, initially, before then spreading to other, mostly Arab majority, mostly authoritarian-led nations.

The impact of this cascade of unrest in this region was immediately felt; within just two years, by early 2012, those ruling Tunisia, Egypt, Libya, and Yemen had been toppled, there were attempts to topple the Bahraini and Syrian governments, there were massive protests in Iraq, Jordan, Kuwait, Morocco, Oman, Algeria, and Sudan, and relatively minor protests, which were still meaningful because of the potential punishments for folks who rocked the boat in these countries, smaller protests erupted in Djibouti, Western Sahara, Saudi Arabia, Palestine, and Mauritania.

Several rulers and their ruling parties committed to stepping down soon, or to not run for reelection—some of them actually stuck with that commitment, though others rode out this period of tumult and then quietly backtracked.

Some nations saw long-lasting periods of unrest following this eruption; Jordan had trouble keeping a government in office for years, for instance, while Yemen overthrew its government in 2012 and 2015, and that spun-out into a civil war between the official government and the Iran-backed Houthis, which continues today, gumming up the Red Sea and significantly disrupting global shipping as a consequence.

What I’d like to talk about today, though, is another seriously disruptive sequence of events that have shaped the region, and a lot of things globally, as well, since the first sparks of what became the Arab Spring—namely, the Syrian Civil war—and some movement we’ve seen in this conflict over the past week that could result in a dramatically new state of affairs across the region.

—

In 1963, inspired by their brethren’s successful coup in nearby Iraq, the military wing of the Arab nationalist Ba’ath party of Syria launched a coup against the country’s post-colonial democratic government, installing in its stead a totalitarian party-run government.

One of the leaders of this coup, Hafez al-Assad, became the country’s president in 1971, which basically meant he was the all-powerful leader of a military dictatorship, and he used those powers to even further consolidate his influence over the mechanisms of state, which meant he also had the ability to name his own successor.

He initially planned to install his brother as leader when he stepped down or died, but that brother attempted to overthrow him when he was ill in 1983 and 1984, so when he got better, he exiled said brother and chose his eldest son, Bassel al-Assad, instead.

Bassel died in a car accident in 1994, though, so Hafez was left with his third choice, Bashar al-Assad, which wasn’t a popular choice, in part because it was considered not ideal for him to choose a family member, rather than someone else from the leading party, but also because Bashar had no political experience at the time, so this was straight-up nepotism: the only reason he was selected was that he was family.

In mid-2000, Hafez died, and Bashar stepped into the role of president. The next few years were tumultuous for the new leader, who faced heightened calls for more transparency in the government, and a return to democracy, or some form of it at least, in Syria.

This, added to Bashar’s lack of influence with his fellow party members, led to a wave of retirements and purgings amongst the government and military higher-ups—those veteran politicians and generals replaced by loyalists with less experience and credibility.

He then made a series of economic decisions that were really good for the Assad family and their allies, but really bad for pretty much everyone else in the country, which made him and his government even less popular with much of the Syrian population, even amongst those who formerly supported his ascension and ambitions.

All of this pushback from the people nudged Bashar al-Assad into implementing an increasingly stern police state, which pitted various ethnic and religious groups against each other in order to keep them from unifying against the government, and which used terror and repression to slap down or kill anyone who stood up to the abuse.

When the Arab Spring, which I mentioned in the intro, rippled across the Arab world beginning in 2011, protestors in Syria were treated horribly by the Assad government—the crackdown incredibly violent and punitive, even compared to that of other repressive, totalitarian governments in the region.

This led to more pushback from Syrian citizens, who began to demand, with increasing intensity, that the Assad-run government step down, and that the Ba’athists running the dictatorship be replaced by democratically elected officials.

This didn’t go over well with Assad, who launched a campaign of even more brutal, violent crackdowns, mass arrests, and the torture and execution of people who spoke out on this subject—leading to thousands of confirmed deaths, and tens of thousands of people wounded by government forces.

This response didn’t go over super well with the people, and these protests and the pushback against them spiraled into a full-on civil uprising later in 2011, a bunch of people leaving the Syrian military to join the rebels, and the country breaking up into pieces, each chunk of land controlled by a different militia, some of these militias working well together, unifying against the government, while others also fought other militias—a remnant of the military government’s efforts to keep their potential opposition fighting each other, rather than them.

This conflict was officially declared a civil war by the UN in mid-2012, and the UN and other such organizations have been fretting and speaking out about the human rights violations and other atrocities committed during this conflict ever since, though little has been done by external forces, practically, to end it—instead it’s become one of many proxy conflicts, various sides supported, mostly with weapons and other resources, though sometimes with training, and in rare instances with actual soldiers on the ground, by the US, Turkey, Russia, Iran, the Iran-backed group Hezbollah, Saudi Arabia, Qatar, Britain, France, Israel, and the Netherlands.

This conflict has demanded the country’s full attention for more than a decade, then, and it’s had influence even beyond Syria’s borders, as groups like the Islamic State, or ISIS has been able to grow and flourish within Syria, due to all the chaos and lack of stability, refugees from Syria have flooded across borders, fleeing the violence and causing all sorts of unintended disruptions in neighboring and even some further-afield countries where, in some cases, millions of these refugees have had to be taken care of, which in turn has influenced immigration-related politics even as far away as the European Union. Also due to that lack of internal control, crime has flourished in Syria, including drug-related crime. And that’s lets to a huge production and distribution network for an illegal, almost everywhere, amphetamine called Captagon, which is addictive, and the pills often contain dangerous filler chemicals that are cheaper to produce.

This has increased drug crime throughout the region, and the Syrian government derives a substantial amount of revenue from these illicit activities—it’s responsible for about 80% of global Captagon production, as of early 2024.

All of which brings us to late-2024.

By this point, Syria had been broken up into about seven or eight pieces, each controlled by some militia group or government, while other portions—which make up a substantial volume of the country’s total landmass—are considered to be up in the air, no dominant factions able to claim them.

Al-Assad’s government has received a fair bit of support, both in terms of resources, and in terms of boots on the ground, from Iran and Russia, over the years, especially in the mid-20-teens. And due in large part to that assistance, his forces were able to retake most of the opposition’s strongholds by late 2018.

There was a significant ceasefire at the tail-end of 2019, which lasted until March of 2020. This ceasefire stemmed from a successful operation launched by the Syrian government and its allies, especially Iran, Russia, and Hezbollah, against the main opposition and some of their allies—basically a group of different rebel factions that were working together against Assad, and this included groups backed by the Turkish government.

On March 5, 2020, Turkish President Erdogan and Russian President Putin, which were backing opposite sides of this portion of the Syrian civil war, agreed on a ceasefire that began the following day, which among other things included a safety corridor along a major highway, separating the groups from each other, that corridor patrolled by soldiers from Turkey and Russia.

This served to end most frontline fighting, as these groups didn’t want to start fighting these much larger, more powerful nations—Russia and Turkey—while trying to strike their enemies, though there were still smaller scuffles and attacks, when either side could hurt their opponent without being caught.

In November of 2024, though, a coalition of anti-Assad militias launched a new offensive against the Syrian government’s forces, which was ostensibly sparked by heavily shelling by those forces against civilians in rural areas outside Aleppo, the country’s second-largest city.

On the 29th of November, those forces captured most of Aleppo, and then plowed their way through previously government-held towns and cities at a fairly rapid clip, capturing another regional capitol, Hama on December 5, and securing Damascus, the capitol of the country, on December 8.

This ended the 13-year civil war that’s plagued Syria since all the way back in 2011; Bashar al-Assad fled to Russia, according to Russian and Iranian officials, and he resigned before he hopped on that flight; Russian state media is saying that Assad and his family have been granted asylum by the Russian government.

This is a rapidly developing story, and we’ll know more over the next few weeks, as the dust settles, but right now it looks like the Syrian government has been toppled by rebel forces led by a man named Abu Mohammad al-Jolani, a 42-year-old child of Syrian exiles who was born in Saudi Arabia, and who spent the early 2000s fighting against US occupation forces in Iraq as part of Al Qaeda.

He apparently spent a few years in an Iraqi prison, then led an Al Qaeda affiliate group, which evolved into its own thing when he broke ties with Al Qaeda’s leadership.

This new group that he formed, Hayat Tahrir al-Sham, tried to differentiate itself from groups like Al Qaeda by saying they didn’t want to play a role in the global jihad, they just wanted to reform the government in Syria. As part of that pivot, they started governing and building infrastructure across the chunk of Syria they claimed, even to the point of collecting taxes and providing civilians with identity cards; though throughout this period they were also known for ruling with an iron fist, and for being hardcore authoritarians, dedicated to implementing a hard-line version of Islamist ideological law.

In the midst of their blitz-like capture of Syria, though, representatives from this group have said they’ll implement a religiously tolerant representative government, and they won’t tell women in the country how to dress.

Following the capture of Damascus, Syria’s Prime Minister said that he would remain in the country, and that he was ready to work with whomever takes the reins as things settle down, happy to make the transition a smooth and peaceful one, essentially, whatever that might mean in practice.

The US military has taken this opportunity to strike dozens of Islamic State facilities and leaders across the country, marking one of the biggest such actions in recent months, and military leaders have said they would continue to strike terrorist groups on Syrian soil—probably as part of an effort to keep the new Syrian government, whatever its composition, from working with IS and its allies.

Russia has requested a closed-door meeting with the United Nations Security Council to discuss Syria’s collapse, and it’s been reported that they failed to come to Assad’s aid because they’re too tied up in Ukraine, and they weren’t able to move forces from North Africa rapidly enough to do much good; though there’s a chance they’ll still shift whatever chess pieces they can to the area in order to influence the composition of the new government, as it’s forming.

Iran has said they welcome whatever type of government the Syrian people decide to establish, though it’s likely they’ll try to nudge that formation in their favor, as Syria has long been an ally and client state of theirs, and they are no doubt keen to maintain that reality as much as possible, and bare-minimum to avoid the establishment of an enemy along their border.

And Israel has entered what’s supposed to be a demilitarized buffer zone in the Golan Heights because this zone is on the Syrian border; they’ve also captured a buffer zone within Syria itself. They’ve launched airstrikes on suspected chemical weapon sites in Syria, to prevent them from falling into extremist hands, they’ve said, and Israeli leaders said they want to keep any issues in their neighbor from impacting Israeli citizens. And Iraq’s government has announced that they’re doing the same along their shared border with Syria, so the whole region is bulwarking their potential weak points, just in case something goes wrong and violence spreads, rather than being tamped down by all this change.

Israel’s prime minister, and other higher ups in the government, have also claimed responsibility for Assad’s toppling, saying it was their efforts against Iran and its proxy forces, like Hezbollah, that set the stage for the rebels to do what they did—as otherwise these forces would have been too strong and too united for it to work.

Notably, the now-in-charge rebel group has been a longtime enemy of Iran and Hezbollah, so while there’s still a lot of uncertainty surrounding all of this, Israel’s government is no doubt generally happy with how things have progressed, so far, as this could mean Syria is no longer a reliable corridor for them, especially for the purposes of getting weapons to Hezbollah in southern Lebanon, along Israel’s northern border.

That said, this same group isn’t exactly a fan of Israel, and is backed by Turkey, which has been highly critical of Israel’s actions in Gaza and Lebanon.

So it’s an incredibly tumultuous moment in Syria, right now, and in this region, as a whole, because the conflict in Syria has been super impactful on everyone thereabouts, to varying degrees, and this ending to this long-lasting civil war could lead to some positive outcomes, like Syrian refugees who have been scattered across neighboring countries being able to return home without facing the threat of violence, and the release of political prisoners from infamous facilities, some of which have already been emptied by the rebels—but especially in the short-term there’s a lot of uncertainty, and it’ll likely be a while before that uncertainty solidifies into something more knowable and predictable, as at the moment, much of the country is still controlled by various militia groups backed by different international actors, including Kurdish-led forces backed by the US, and forces allied with Turkey in the north.

So this change of official governance may shuffle the deck, but rather than stabilizing things, it could result in a new conflict catalyzed by the power vacuum left by the Assad government and its allies, if rebel forces—many of which have been labeled terrorists by governments around the world, which is another wrinkle in all this—if they fail to rally behind one group or individual, and instead start fighting each other for the opportunity to become the country’s new dominant force.

Show Notes

https://www.nytimes.com/2024/12/08/world/middleeast/syria-hts-jolani.html

https://www.nytimes.com/2024/12/06/briefing/syria-civil-war-assad.html

https://www.wsj.com/world/middle-east/assads-rule-collapses-in-syria-raising-concerns-of-a-vacuum-95568f13

https://www.nytimes.com/2024/12/02/world/middleeast/syria-rebels-hts-who-what.html

https://www.washingtonpost.com/national-security/2024/12/07/syria-rebels-biden-intelligence-islamists/

https://apnews.com/article/turkey-syria-insurgents-explainer-kurds-ypg-refugees-f60dc859c7843569124282ea750f1477

https://apnews.com/article/israel-hamas-war-gaza-lebanon-news-7-december-2024-53419e23991cfc14a7857c82f49eb26f

https://apnews.com/article/syria-assad-sweida-daraa-homs-hts-qatar-816e538565d1ae47e016b5765b044d31

https://www.nytimes.com/2024/12/08/world/middleeast/syria-damascus-eyewitness-assad.html

https://www.nytimes.com/article/syria-civil-war-rebels.html

https://www.nytimes.com/live/2024/12/08/world/syria-war-damascus

https://en.wikipedia.org/wiki/Ba%27ath_Party

https://en.wikipedia.org/wiki/1963_Syrian_coup_d%27%C3%A9tat

https://en.wikipedia.org/wiki/Hafez_al-Assad

https://en.wikipedia.org/wiki/Syrian_revolution

https://www.cfr.org/article/syrias-civil-war

https://en.wikipedia.org/wiki/Syrian_civil_war

https://en.wikipedia.org/wiki/Bashar_al-Assad

https://en.wikipedia.org/wiki/Fenethylline

https://carnegieendowment.org/research/2024/07/border-traffic-how-syria-uses-captagon-to-gain-leverage-over-saudi-arabia?lang=en

https://en.wikipedia.org/wiki/Northwestern_Syria_offensive_(December_2019_%E2%80%93_March_2020)

https://en.wikipedia.org/wiki/2024_Syrian_opposition_offensives

https://www.bbc.com/news/articles/c8j99447gj1o

https://apnews.com/article/syria-assad-rebels-war-israel-a8ecceee72a66f4d7e6168d6a21b8dc9

https://www.nytimes.com/live/2024/12/09/world/syria-assad-rebels

https://www.nytimes.com/2024/12/09/world/middleeast/israel-assad-syria.html

https://apnews.com/article/iran-mideast-proxy-forces-syria-analysis-c853bf613a6d6af7f6aa99b2e60984f8

https://www.nytimes.com/2024/12/09/briefing/irans-very-bad-year.html

https://apnews.com/article/syria-hts-assad-aleppo-fighting-2be43ee530b7932b123a0f26b158ac22

https://apnews.com/article/syria-insurgents-aleppo-iran-russia-turkey-abff93e4f415ebfd827d49b1a90818e8

https://www.nytimes.com/2024/12/06/world/middleeast/syria-rebels-hama-homs.html

https://en.wikipedia.org/wiki/Syrian_civil_war

https://en.wikipedia.org/wiki/Arab_Spring

This week we talk about emissions, carbon credits, and climate reparations.

We also discuss Baku, COP meetings, and petrostates.

Recommended Book: The Struggle for Taiwan by Sulmaan Wasif Khan

Transcript

In 2016, a group of 195 nations signed the Paris Agreement under the United Nations Framework Convention on Climate Change, usually just called the Paris Agreement, which was negotiated the previous year, and which, among other things, formalized the idea of attempting to keep the global average temperature from increasing by 1.5 C, which is about 2.7 F, above pre-industrial levels.

The really bad stuff, climate-wise, was expected to happen at around 2 degrees C above that pre-industrial level, so the 1.5 degrees cutoff made sense as sort of a breakwater meant to protect humanity and the natural world from the most devastating consequences of human-amplified climate change.

This has served decently well as a call-to-arms for renewable energy projects and other efforts meant to reduce greenhouse gas emissions, and many nations have actually made really solid strides in that direction since this agreement was formalized, dramatically truncating their emissions in a variety of ways, while also laying the groundwork for long-term reductions by installing a whole lot of solar and wind, reviving old and building new nuclear power facilities, reinforcing and expanding their grids, including adding all sorts of large-scale battery storage, and figuring out ways to reduce energy consumption, which has allowed for the shut-down of coal and oil plants.

Shorter-term solutions, like replacing more polluting and emitting sources of energy, like coal, with gas, have also put a big dent in overall global emissions, especially for entities like the US and Europe; this isn’t ideal as a permanent measure, because there are still a lot of emissions associated with gas, especially its transport, because of leakage, and gas itself, in the atmosphere, has really significant greenhouse properties, but in the short-term this has proven to be one of the most impactful solutions for some nations and large corporations, and it’s increasingly being seen as a transitionary measure, even by those who oppose the use of any fossil fuels long-term.

Things have been going decently well, then, even if progress is still far short of where it needs to be for most countries to meet their Paris Agreement commitments, and far slower than many people who are watching this space, and analyzing whether we’ll be able to avoid triggering those much-worse climate outcomes, would prefer.

One issue we’re running into, now, is that those original commitments were a little fuzzy, as the phrase “preindustrial period” could mean many different periods, even if it’s commonly assumed to be something like 1850 to 1900, in the lead-up to humanity’s full-on exploitation of fossil fuels and the emergence of what we might call the modern era—society empowered by things like coal and oil and gas, alongside the full deployment of electrical grids.

Throughout this period, though, from the mid-19th century to today, the climate has experienced huge swings year to year, and decade to decade. The evidence showing that we humans are throwing natural systems way off their equilibrium are very clear at this point, and it isn’t a question of whether we’re changing the climate—it’s more a question of how much, how quickly, and compared to what; what baseline are we actually using, because even during that commonly used 1850 to 1900 span of time, the climate fluctuated a fair bit, so it’s possible to pick and choose baseline numbers from a range of them depending on what sort of picture you want to paint.

Research from the World Meteorological Organization in 2022 found that, as of that year, we were probably already something like 1.15 degrees C above preindustrial levels, but that it was hard to tell because La Niña, a weather phenomenon that arises periodically, alongside its opposite, El Niño, had been cooling things down and dampening the earth-warming impacts of human civilization for about three years.

They estimated, taking La Niña’s impact into consideration, that the world would probably bypass that breakwater 1.5 degrees C milestone sometime in the next four years—though this bypassing might be temporary, as global temperatures would increase for a few years because of the emergence of El Niño.

Adding to the complexity of this calculation is that aforementioned variability in the climate, region to region, and globally. The WMO estimated that through 2027, the world is likely to fluctuate between 1.1 and 1.8 degrees C above preindustrial levels—and that at that higher range, El Niño might tip things into the especially dangerous 2 degree C territory the Paris Agreement was supposed to help us avoid.

By late-2024, it was becoming increasingly obvious that the world had stepped past the 1.5 degrees threshold into unfamiliar climactic terrain.

Three of the five leading research groups that keep tabs on this matter have said that in addition to 2024 being the warmest year on record, it will also be the first year we’ve ever surpassed that 1.5 degree level.

Notably, simply popping up above 1.5 degrees doesn’t suggest we’re now permanently living in that long worried about climate nightmarish world: there are significant, normal fluctuations in this kind of thing, alongside those associated with the El Niño/La Niña patterns; there are a lot of variables acting upon our climate, in other words, in addition to the human variables that are pushing those averages and fluctuating ranges up, over time.

The concern here, though, even if we drop back down below 1.5 degrees C for a while is that this temperature band opens up a whole new spectrum of weather-related consequences, ranging from substantial, persistent, crop-killing, barely survivable heat and drought in some parts of the world, to things like larger, more frequent, and more difficult to predict storm systems, like the ones we’ve already seen in abundance this and last year, but bigger and wilder and in more areas that don’t typically see such storms.

What I’d like to talk about today is what happened at a recent climate-policy focused meeting, COP29, and the international response to that meeting.

—

The United Nations Conference of the Parties of the UN Climate Change Conference, or COP meetings, are held every year in a different host country, and they’re meant to serve as a formal space where governments can present their goals and boast of their climate-related accomplishments. They also serve as a platform for negotiations related to things like emissions standards and goal-setting, like that aforementioned 1.5 degrees C temperature level we’ve been trying to avoid hitting.

The most recent of these meetings, COP29, was held in Baku, the capitol of Azerbaijan, in mid- to late-November of 2024. And that location was pretty controversial from the get-go because Azerbaijan is a petro-state: its authoritarian government basically funded and sustained by the sale of oil and gas, all of which flows through a state-owned, corruption-laden, local elite-profiting energy company.

This isn’t the first time a full-on petro-state has hosted a COP meeting, as COP28 was held in Dubai, in the UAE, which was also controversial.

But this one was seen as a step even further toward what might read as the appropriation or capture of the COP meetings for the benefit of fossil fuel entities, as the meeting was partly hosted by so-called official partners, which were fossil fuel business interests directly owned by the country’s president, while others weren’t directly owned, but were connected to his family’s other businesses, all of them thus linked to both authoritarian corruption, and the wealth associated with fossil fuel focused economics.

As a result, there were allegations that this whole meeting was premised on providing a notorious source of greenhouse gas emissions, which has every reason to try to keep those emitting products available for as long as possible, a venue for greenwashing their efforts, while also giving them the power to moderate discussions related to global emissions targets and other climate change-oriented issues; a major conflict of interest, basically.

The Azerbaijani president, leading up to the meeting, countered that critiques of his country’s government and human rights record and prominence as a fossil fuel exporter were all part of a smear campaign, and that these unwarranted, preemptive criticisms wouldn’t stop those running COP29 from achieving their goal of helping the world “cope with the negative impacts of climate change.”

That statement, too, was criticized, as it implies fossil fuel are more interested in pushing the world to adapt to a climate change and its impacts, rather than attempting to halt the emissions that are causing said climate change; many such companies seem keen to keep pumping oil and burning coal and gas forever, in other words, and their efforts in this regard thus tend to orient around figuring out what the new, warmer, more chaotic world looks like, rather than entertaining the idea of changing their business model in any substantial way.

So leading up to this meeting, expectations were low, and by some estimates and according to some analysis, those low expectations were met.

Article 6 of the Paris Agreement was a big topic of discussion, for instance, as this article outlines how countries can cooperate with each other to reach their climate targets—and this collaboration is predicated on a carbon credit system.

So if County A reduces their emissions by more than the targets set by this group, they can sell the gap, the amount of carbon equivalents not emitted into the atmosphere, to Country B, which failed to reach its targets, but which can bring its emissions into accord by acquiring those credits, which according to such a system count as emissions reductions.

This same general concept applies to companies, like airlines and even fossil fuel producing energy companies, as well.

But while the agreement reached at COP29 does establish a UN-backed carbon credit trading body, which has been heralded as a key step on the way toward concluding Article 6 negotiations that could open up a bunch of new finance for smaller and poorer countries in particular—as they could sell their carbon credits to their wealthier, more emitting fellow COP members—despite that progress, the scaffolding that exists now is generally considered to be leaky and rife with abuse potential, as the UN body doesn’t really have the teeth to enforce anything or do much checking into claims made by governments and corporations. A lot of this system is basically on the honor system, and that means just like the stated goals presented by governments and corporations as to when they’re be net-zero and when they’ll reach the even further-off goal of zero emissions, these claims are often worth little or nothing because there’s no mechanism for punishing entities that fail to live up to their boasts and ambitions.

A company or government could say they plan to hit net-zero by 2035, then, but if they don’t do anything that would allow them to hit that goal in that lead-up to that year, they get to keep claiming to be part of the solution, without having to do any of the work to actually achieve anything. This grants them the veil of sustainability, and without any real consequence.

Also notable here is that this meeting’s progress on Article 6, establishing that UN body, was pushed through using a questionable procedural move that disallowed negotiation, despite this same proposal having been dismissed after negotiation at previous COP meetings.

So while it’s arguably good to see progress of any kind on these matters, that this component of Article 6 was voted down previously, but then forced through using what amounts to a technicality early on at COP29 is being side-eyed by a lot of COP watchers who worry about these meetings being coopted by forces that are keen to see this carbon system formalized not because it will help the world reduce emissions, but because it will create a new asset class worth hundreds of billions of dollars, which many of them hope to profit from.

It’s worth noting, too, that all of the carbon credit markets that have been tried, so far, have either collapsed or served as mechanisms for greenwashing emitting activities; less than 16% of carbon credits issued up till this point represent actual, provable emissions reductions, and most of them are basically just dressed-up money grabs. This new move, despite representing progress of a sort, isn’t being seen as substantial enough to change the current carbon credit paradigm, as those issues have not been addressed, yet.

All that said, the big news out of COP29 was a deal that requires wealthier nations make a big payout to poorer nations in the form of climate finance; so paying for renewable energy infrastructure, paying for flood walls, things like that, so that poorer countries can leap-frog the fossil fuel era, and so they can deal with and survive the consequences of climate change, which is something they bear a lot less responsibility for than wealthier, far more emitting countries.

Those on the receiving end, representing the nations that will receive payments via this plan, were aiming for a minimum of $500 billion, payable in full by 2035, and they were pushing for a lot more than that: something like $1.3 trillion.

The final sum was lower than the minimum target, though, weighing in at just $300 billion; which isn’t great in contrast to those hoped-for figures, though on the upside, it is three-times what was promised as part of a previously negotiated deal from 2009.

Representatives from poorer nations have expressed their discontentment with this agreement, saying that the sum is paltry compared to the challenges they face in trying to shift to renewables while also scrambling to defend against increasingly dangerous temperatures and weather patterns.

They’ve also criticized the meeting’s leadership for basically gaveling this version of the agreement through before it could be commented upon by those on the receiving end of these payouts.

Summing up the consequences of this meeting, then, a lot of money matters were discussed, which is important, and more money was promised to poorer nations by wealthy nations than at earlier meetings, which is also generally considered to be vital to this transition, and to overall fairness within this context—since again, these nations have contributed very little to the issue of climate change, compared to wealthier nations, and they bear a disproportionate amount of the negative consequences of climate change, as well.

There are serious concerns that some of these things were passed without the usual level of democratic consideration, and that some of the money talk, especially related to carbon credits, could represent basically a cash-grab by entities that aren’t super-interested in actually changing the status quo, but are very interested in making potentially tens or hundreds of billions of dollars from what amounts to a fabricated asset class that they can spin-up out of nothing.

There’s a chance that some of this, even the stuff that’s sparking the most concern at the moment, and which seems to be a cynical appropriation of this group and this whole process, could actually lead to more substantial agreements at future COP meetings.

COP30 will be based in Brazil, and Brazil’s current leadership at least has shown itself to be decently concerned with actual climate issues, as opposed to just the money associated with them. And previous meetings have tended to build upon the agreements of their precursors—so the establishment of a UN body for carbon credits could clear the way for an actually empowered, punishment-capable institution that holds companies and countries to their word on things, rather than simply serving as a symbolic institution that watches over a made-up asset class, which seems to be the case, currently. That asset class could become less prone to abuse and manipulation, and could help with this energy transition as it’s ostensibly meant to; but that’ll be determined in large part by what happens at the next couple meetings.

However this policymaking plays out, we’ve stepped into a world in which 1.5 C is no longer a far off concern, but a lived reality, at least periodically, and that could nudge things more in the direction of practical outcomes, rather than aspirations and fuzzy goals from this and similar bodies; though the consequences of this and the last few COP meetings have arguably led to luke-warm progress in that direction, at best.

Show Notes

https://www.wsj.com/articles/u-n-negotiators-take-key-step-to-global-carbon-deal-1e23433e

https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism

https://en.wikipedia.org/wiki/Petroleum_industry_in_Azerbaijan

https://en.wikipedia.org/wiki/United_Nations_Climate_Change_Conference

https://www.semafor.com/article/11/24/2024/the-cop29-deal-is-even-more-disappointing-than-it-looks

https://apnews.com/article/united-nations-climate-talks-baku-azerbaijan-finance-8ab629945660ee97d58cdbef10136f35

https://www.theguardian.com/environment/2024/nov/24/cop29s-new-carbon-market-rules-offer-hope-after-scandal-and-deadlock

https://www.businessgreen.com/blog-post/4382153/cop29-baku-breakthrough-disappoints-trigger-fresh-wave-climate-finance

https://news.mit.edu/2023/explained-climate-benchmark-rising-temperatures-0827

https://www.theguardian.com/environment/2024/nov/18/climate-crisis-world-temperature-target

https://grist.org/economics/how-the-world-gave-up-on-1-5-degrees-overshoot/

https://www.washingtonpost.com/climate-environment/2024/11/27/global-warming-fight-paris-agreement-future/

https://en.wikipedia.org/wiki/Paris_Agreement

This week we talk about Mastodon, Threads, and twttr.

We also discuss social platform clones, user exoduses, and communication fractures.

Recommended Book: Invisible Rulers by Renée DiResta

Transcript

In 2006, a prototype of a software project called twttr, t-w-t-t-r, was developed by Jack Dorsey and Florian Weber, that name used because the full twitter.com domain, the word with all its vowels, was already owned and in use, and because the vowel-less version of the word only had five letters, which aligned with SMS short codes for the US, which were basically shorthand versions of telephone numbers that were used in lieu of such numbers by mobile network operators at the time.

Going without vowels was also super trendy in Silicon Valley back then, due to the flourishing of online success stories like Flickr.

Twitter, in that early incarnation, was meant to be a one-to-many SMS service, which means sending text messages from one phone to multiple phones, rather than one to one, which was the default.

This early prototype was used internally at Odeo, which was an early-2000s web-based media directory, founded by some of the same people who eventually founded Twitter as a company, and random fun fact, Kevin Systrom who eventually cofounded Instagram, was an intern at Odeo one summer, back in 2005, before the company was sold in 2007.

Twitter was spun out as its own company the same year Odeo was sold, and by 2009 it had become the hot new thing in the burgeoning world of the web—folks were sending tens of thousands of tweets, messages that were shared one-to-many, though online, on the web, instead of via SMS, by the end of 2007, and that was up to 50 million a day by early 2010.

The whole concept of Twitter, then, from its name, which was initially predicated on SMS short codes, to its famous 140-character limit, was based on earlier technology, that of text messages, and that sort of limitation—which has in the years since been messed with a bit, the company slowly adding more capabilities, including the sharing of images and videos and other media types—but those limitations have in part helped define this platform from its peers, as while Facebook expanded and expanded and expanded to gobble up all of its general-purpose social networking competitors, Instagram dominated the photo-posting space, and YouTube has locked down the long-form video world for more than a decade, twitter held its own as a less-sprawling, less successful by most metrics, but arguably more influential network because it was a place that was optimized for concision and up-to-the-minute conversation, as opposed to every other possible thing it could be.

This meant that while it didn’t have the same billion-plus user base, and it didn’t have the ever-growing ad-revenue that Meta’s platforms could claim, it was almost always the more culturally relevant network, its users sharing more up-to-date information, its communities generating more memes, which were then spread to other networks days or weeks later, and it became a hotbed of debate and exclusive information from journalists, politicians, and business owners.

A lot changed when Tesla and SpaceX owner Elon Musk bought the network in October of 2022, changing the name to X in mid-2023, and pivoting the company dramatically in basically every way: removing a lot of those earlier limitations, cutting the number of employees by something like 80%, and losing a lot of advertisers because of his many ideological statements and political stances—including his backing of former president and now president-elect Donald Trump in the 2024 election.

What I’d like to talk about today are the twitter clones that have popped up in recent years, and one in particular that, despite its still-small size and arguable underdog status, is being heralded as the possible successor of Twitter—in that original, influential and scrappy sense—and what makes this network, Bluesky, different from other would-be successors in this space.

—

The leadership at X, including owner Musk, recently promoted a new feature on the app that refocuses attention away from buttons like likes and shares in favor of views—a metric of engagement that some analysts have claimed is meant to conceal the fact that the network is seeing a lot less actual, human engagement, and because it feeds people posts it wants them to see, this change allows them to artificially inflate the seeming activity on these posts for advertising purposes: they can say, hey look how much attention these posts are getting, please buy some ads, and that allows them to charge a higher price than if they were using those more conventional engagement metrics, which are apparently collapsing.

As a company, X has been hemorrhaging money since Musk took over, its ad revenue, which makes up the majority of its income, dropping by nearly half from 2022 to 2023, and it lost another 24% from the first half of 2023 to the first half of 2024.

One estimate released in November of 2024 suggests that X may have missed out on nearly $6 billion in lost ad revenue since Musk took over in 2022, mostly because of all the decisions he’s made—including basically going to war with many of the company’s top advertisers, publicly criticizing and threatening them for not paying more and buying more ads—but also his many foot-in-mouth statements and, at times, support of extremist causes and characters.

He’s attempted to bring some of those advertisers back, with mixed success, as the ones that have returned after boycotts have usually invested far less than in the past, and most of the ad-buyers that have filled the gaps are paying a lot less per ad unit than before, and are generally of a lower quality: a lot of cheaply products from low-grade Chinese factories, scams of various sorts, and/or products sold by companies that are politically conservative culture-warriors, aimed at the network’s increasingly right-leaning and far-right audience; a bit like what we’ve seen on Fox News over the past decade or so, following waves of sexual assault and other scandals on that network, which led to similar advertiser exoduses.

It’s also been estimated that the network lost a substantial portion of its total user-base following Musk’s takeover, including something like a third of all users in the UK and around a fifth in the United States, all just in 2024, up till the month of September.

That loss of revenue and users was enough to cause Fidelity, which owns a multi-million-dollar stake in X, to write down the value of its investment by more than 75%; in July of 2024, it estimated the company, which was purchased for about $44 billion by Musk was only worth about $9.4 billion; a substantial loss for them and their investment, but also for all other shareholders.

All of which leads up to what happened in the wake of the US’s most recent presidential election, during which Musk shelled out more than $100 million to support Trump’s campaign, while also pulling out all the stops to promote the former president on X—something that many users weren’t too keen on, as the owners of other social networks have been criticized and threatened in the past for showing any hint of political bias in their business decisions or personal life, and this was incredibly overt.

This heavy-handed biasing of the network toward Trump, and that very public support of the candidate by X’s owner, sparked a new exodus from the platform, some people simply quitting social media entirely, at least for a while, but others looking for something of the same, and thus checking out the twitter-clones that have popped up over the past handful of years; the majority of which only actually gained real momentum in the wake of Musk’s takeover and rebranding of the network a few years ago.

One of those twitter-alternatives, Mastodon, attracted a lot of early attention because of what it offered that twitter, and other mainstream social networks, did not: an open source platform based on the ActivityPub protocol, which means it can connected to other ActivityPub-capable social networks.

So in theory at least, you can have a profile on a Mastodon instance—which a self-hosted Mastodon network, a social platform island of sorts that is connected to other such islands, the totality of the social network made up of a huge number of such instances, all interconnected in various ways, and each offering different rules and focuses—you can have that profile on that island function on other networks beyond Mastodon, as well.

And that’s interesting because it means your work, your posts and conversations, are all more portable, allowing you to move to different networks if you choose, without losing your history and connections and credibility, because it’s all compatible with other networks.

So it’s almost like having a Facebook profile that you can also use on Twitter and Instagram and YouTube, if all those networks played well together and shared information and post types between each other; that’s the promise of a protocol like ActivityPub and a network like Mastodon.

Mastodon was made public in 2016 as a nonprofit, has basically the same feature-set as pre-Musk twitter, and while it had already gained a steady stream of users from previous upsets at networks like Twitter, Facebook, and Tumblr, among other more mainstream networks, it attained a huge number of new users in 2022 on the news that Musk would be taking over Twitter, hitting around 2.5 million monthly active users by the end of that year.

That number has since dropped to just under a million as of September 2024, suggesting that the initial wave of enthusiasm has crested; though the platform continues to see a lot of support within some online communities, and its interactivity with other networks, including Meta’s Threads, which has also added ActivityPub functionality, means that its numbers will always be a little weird, as folks can read Mastodon content and interact with Mastodon users from other, connected networks.

Speaking of which, Threads is a twitter-clone that was released by Facebook and Instagram parent-company Meta in July of 2023, and it attained more than 100 million users in just five days, which set a new record for the rate of user-attainment.

It took a little while for the network to be released beyond the US, especially in the EU, due to regulatory concerns, and an earlier version of the app was more of a Snapchat-clone, but that one did badly enough with users that the company pulled it from app stores and reused the brand for this new app a few years after that failed experiment.

Threads was able to achieve that high adoption rate in part because it promoted the app heavily on Instagram and Facebook, and in part because of Musk’s takeover of, and changes to Twitter. Folks looking for a Twitter-alternative, but who didn’t want to deal with the comparable complexity of something like Mastodon flooded into this new network, and Meta’s decision to push politics and other serious discussions to the algorithmic back-burner made it a friendly space for brands and influencers who didn’t want to be associated with the chaotic forces that were swirling around the newly rebranded X.

So Threads is similar to Twitter, but it supports ActivityPub, like Mastodon, and has similar community guidelines to other Meta products—which means there’s a lot less nudity, and fewer references to illegal things, like drugs.

It was recently announced that Threads has surpassed 275 million monthly active users, which puts it within spitting distance of independent assessments of X’s monthly active user figure, which Musk recently said was around 600 million, but Sensor Tower says is closer to 318 million, as of October of 2024.

There’s been some hubbub about the possibility that Threads might be seeing losses in activity on the network, though, including a drop in how much time users spend on it. This is potentially the result of that decision to keep controversial stuff more or less hidden, and to heavy handedly, compared to other networks, at least, curate the feeds of users, who have very limited power over what they see in their feeds.

The company announced they would be adjusting the algorithm significantly in the near-future, in order to allow more breaking news and other such posts to rise to the forefront, and it’s thought that this might be a response to the recent success of another twitter-clone called Bluesky.

Bluesky was founded in 2021, and it was originally, back in 2019, an initiative by Twitter to see if decentralizing the network might be possible—making Twitter just one network in a fediverse of networks, basically. As a result, it’s perched atop an open communication protocol it developed called the AT Protocol, which is distinct from, but similar in utility to ActivityPub, in that it allows social platforms to link up and interact with each other, despite being different networks.

Bluesky is superficially similar to pre-Musk twitter, but one of its killer apps, one of the things that distinguishes it from most other options in this space right now, alongside the AT Protocol, is the ability to choose your own algorithm, so that rather than having Meta decide what you see in your feed, and rather than just seeing a chronological list of posts from people you follow, you can also choose to follow curated lists of people, to tweak the word and content filters you use, the way posts are arranged, and an abundance of other options; it’s pretty versatile, and you can easily flip between different filters to peruse different sorts of content filtered in different ways.

The network launched on an invite-only basis in 2023, and was fully opened to the public in February of 2024, at which point it had already attracted more than 3 million users.

Shortly after that launch, Jack Dorsey—the co-founder of Twitter and Bluesky—left Bluesky’s board, saying that the company was making all the mistakes Twitter made and that he was stepping aside to focus on another decentralized social network he founded, Nostr, instead.

Bluesky continued to gain users though, relatively slowly most of the time, though whenever Musk did something controversial they would typically see a larger influx, as was the case for all twitter-clones.

In October of 2024, several changes to Twitter, including one that basically rendered its block feature useless, and another that said the company could use all posted content for AI training purposes, led to a surge in Bluesky adoption, bringing in more than 1.2 million users in just two days.

That paled in comparison to what happened in November, following the election, though, when Bluesky started to grow by about a million users a day, catapulting its user base to more than 20 people million as of November 20—a surge that rocketed the app to the top of the app charts. And for context, the company only has about 20 employees, as of late-November, so that’s a huge employee-to-user ratio.

Bluesky is not without controversy, as the company’s leadership has already been criticized for taking investment money from Blockchain Capitol, which could change its incentives, and though it’s approaching 25 million users as of the day I’m recording this, up from a small fraction of that just a month ago, that’s less than 10% of what Threads and X have, and that growth is almost certain to slow sometime soon, once the post-election flight from X has subsided; so it’s possible this surge could be similar to what Mastodon saw not too long ago—a big surge in users, followed by a ebb in activity as people stop using the network for various reasons.

The company has also been experiencing growing pains, in terms of tech, because of that sudden, much larger scale, but also in terms of culture.

All those newbies joining the network all at once are changing the platform’s makeup, accidentally trampling Bluesky’s traditions and folkways, while also changing the conversational mores and topics and trends from how they were, pre-user-flood.

Bluesky is currently the one the beat in terms of growth rate, in other words, and it seems to have achieved significant cultural resonance following the election, especially for people on the left of the political spectrum who no longer feel welcome or comfortable on X.

But both Mastodon and Threads have represented the same in recent years, too, though their growth largely the consequence of X’s failure, not necessarily the result of their own accolades and advantages.

It’s possible what we’re seeing here, then, is not a struggle to become the next Twitter, but rather the emergence of a fractured text-based social media ecosystem, each platform offering something the others don’t, or favoring some groups and their needs over those of others, and that, in turn, leading to a more fractured communication ecosystem, and maybe reinforced filter bubbles, as well.

Show Notes

https://www.fastcompany.com/91230935/the-website-tracks-how-fast-bluesky-is-growing-in-near-real-time

https://techcrunch.com/2024/10/18/bluesky-surges-into-the-top-5-as-x-changes-blocks-permits-ai-training-on-its-data/

https://en.wikipedia.org/wiki/Threads_(social_network)

https://news.sky.com/story/the-x-exodus-could-bluesky-spike-spark-end-of-elon-musks-social-media-platform-13254722

https://www.newsweek.com/elon-musk-hides-x-engagement-figures-user-exodus-1990065

https://www.cnbc.com/2024/10/31/metas-threads-app-now-has-275-million-users-zuckerberg-says.html

https://www.odwyerpr.com/story/public/21747/2024-08-27/ad-revenue-freefall-continues-at-x.html

https://www.warc.com/content/paywall/article/warc-curated-datapoints/counting-the-cost-xs-59bn-in-lost-ad-revenue-since-its-2022-takeover/en-gb/157583

https://www.euronews.com/my-europe/2024/11/21/are-users-leaving-elon-musks-x-en-masse-and-where-are-they-heading

https://www.euronews.com/next/2024/10/01/x-has-lost-75-of-its-value-since-elon-musk-took-over

https://www.cnn.com/2024/11/06/business/elon-musk-election-bet/index.html

https://anderegg.ca/2024/11/15/maybe-bluesky-has-won

https://www.nytimes.com/2024/11/17/technology/bluesky-growing-pains.html

https://thenextweb.com/twitter/2011/07/15/5-years-ago-today-twitter-launched-to-the-public/

https://www.businessinsider.com/how-twitter-was-founded-2011-4?op=1

https://www.nytimes.com/2010/10/31/technology/31ev.html

https://en.wikipedia.org/wiki/Twitter

https://en.wikipedia.org/wiki/X_Corp.

This week we talk about neural networks, AGI, and scaling laws.

We also discuss training data, user acquisition, and energy consumption.

Recommended Book: Through the Grapevine by Taylor N. Carlson

Transcript

Depending on whose numbers you use, and which industries and types of investment those numbers include, the global AI industry—that is, the industry focused on producing and selling artificial intelligence-based tools—is valued at something like a fifth to a quarter of a trillion dollars, as of halfway through 2024, and is expected to grow to several times that over the next handful of years, that estimate ranging from two or three times, to upward of ten or twenty-times the current value—again, depending on what numbers you track and how you extrapolate outward from those numbers.

That existing valuation, and that projected (or in some cases, hoped-for growth) is predicated in part on the explosive success of this industry, already.

It went from around $10 billion in global annual revenue in 2018 to nearly $100 billion in global revenue in 2024, and the big players in this space—among them OpenAI, which kicked off the most recent AI-related race, the one focusing on large-language models, or LLMs, when it released its ChatGPT tool at the tail-end of 2022—have been attracting customers at a remarkable rate, OpenAI hitting a million users in just five days, and pulling in more than 100 million monthly users by early 2023; a rate of customer acquisition that broke all sorts of records.

This industry’s compound annual growth rate is approaching 40%, and is expected to maintain a rate of something like 37% through 2030, which basically means it has a highly desirable rate of return on investment, especially compared to other potential investment targets.

And the market itself, separate from the income derived from that market, is expected to grow astonishingly fast due to the wide variety of applications that’re being found for AI tools; that market expanded by something like 50% year over year for the past five years, and is anticipated to continue growing by about 25% for at least the next several years, as more entities incorporate these tools into their setups, and as more, and more powerful tools are developed.

All of which paints a pretty flowery picture for AI-based tools, which justifies, in the minds of some analysts, at least, the high valuations many AI companies are receiving: just like many other types of tech companies, like social networks, crypto startups, and until recently at least, metaverse-oriented entities, AI companies are valued primarily based on their future potential outcomes, not what they’re doing today.

So while many such companies are already showing impressive numbers, their numbers five and ten years from now could be even higher, perhaps ridiculously so, if some predictions about their utility and use come to fruition, and that’s a big part of why their valuations are so astronomical compared to their current performance metrics.

The idea, then, is that basically every company on the planet, not to mention governments and militaries and other agencies and organizations will be able to amp-up their offerings, and deploy entirely new ones, saving all kinds of money while producing more of whatever it is they produce, by using these AI tools. And that could mean this becomes the industry to replace all other industries, or bare-minimum upon which all other industries become reliant; a bit like power companies, or increasingly, those that build and operate data centers.

There’s a burgeoning counter-narrative to this narrative, though, that suggests we might soon run into a wall with all of this, and that, consequently, some of these expectations, and thus, these future-facing valuations, might not be as solid as many players in this space hope or expect.

And that’s what I’d like to talk about today: AI scaling walls—what they are, and what they might mean for this industry, and all those other industries and entities that it touches.

—

In the world of artificial intelligence, artificial general intelligence, or AGI, is considered by many to be the ultimate end-goal of all the investment and application in and of these systems that we’re doing today.

The specifics of what AGI means varies based on who you talk to, but the idea is that an artificial general intelligence would be “generally” smart and capable in the same, or in a similar way, to human beings: not just great at doing math and not just great at folding proteins, or folding clothes, but pretty solid at most things, and trainable to be decent, or better than decent at potentially everything.

If you could develop such a model, that would allow you, in theory, to push humans out of the loop for just about every job: an AI bot could work the cash register at the grocery store, could drive all the taxis, and could do all of our astronomy research, to name just a few of the great many jobs these systems could take on, subbing in for human beings who would almost always be more expensive, but who—this AI being a generalist and pretty good at everything—wouldn’t necessarily do any better than these snazzy new AI systems.

So AGI is a big deal because of what it would represent in terms of us suddenly having a potentially equivalent intelligence, an equivalent non-human intelligence, to deal with and theorize over, but it would also be a big deal because it could more or less put everyone out of work, which would no doubt be immensely disruptive, but it would also be really, really great for the pocketbooks of all the companies that are currently burdened with all those paychecks they have to sign each month.

The general theory of neural network-based AI systems, which basically means software that is based in some way on the neural networks that biological entities, like mice and fruit flies and humans have in our brains and throughout our bodies, is that these networks should continue to scale as the number of factors that go into making them scale: and usually those factors include the size of the model—which in the case of most of these systems means the number of parameters it includes—the size of the dataset it trains on—which is the amount of data, written, visual, audio, and otherwise, that it’s fed as it’s being trained—and the amount of time and resources invested in its training—which is a variable sort of thing, as there are faster and slower methods for training, and there are more efficient ways to train that use less energy—but in general, more time and more resources will equal a more girthy, capable AI system.

So scale those things up and you’ll tend to get a bigger, up-scaled AI on the other side, which will tend to be more capable in a variety of ways; this is similar, in a way, to biological neural networks gaining more neurons, more connections between those neurons, and more life experience training those neurons and connections to help us understand the world, and be more capable of operating within it.

That’s been the theory for a long while, but the results from recent training sessions seem to be pouring cold water on that assumption, at least a bit, and at least in some circles.

One existing scaling concern in this space is that we, as a civilization, will simply run out of novel data to train these things on within a couple of years.

The pace at which modern models are being trained is extraordinary, and this is a big part of why the larger players, here, don’t even seriously talk about compensating the people and entities that created the writings and TV shows and music they scrape from the web and other archives of such things to train their systems: they are using basically all of it, and even the smallest payout would represent a significant portion of their total resources and future revenues; this might not be fair or even legal, then, but that’s a necessary sacrifice to build these models, according to the logic of this industry at the moment.

The concern that is emerging, here, is that because they’ve already basically scooped up all of the stuff we’ve ever made as a species, we’re on the verge of running out of new stuff, and that means future models won’t have more music and writing and whatnot to use—it’ll have to rely on more of the same, or, and this could be even worse, it’ll have to rely on the increasing volume of AI-generated content for future iterations, which could result in what’s sometimes called a “Habsburg AI,” referring to the consequences of inbreeding over the course of generations: and future models using AI-generated content as their source materials may produce distorted end-products that are less and less useful (and even intelligible) to humans, which in turn will make them less useful overall, despite technically being more powerful.

Another concern is related to the issue of physical infrastructure.

In short, global data centers, which run the internet, but also AI systems, are already using something like 1.5-2% of all the energy produced, globally, and AI, which use an estimated 33% more power to generate a paragraph of writing or an image, than task-specific software would consume to do the same, is expected to double that figure by 2025, due in part to the energetic costs of training new models, and in part to the cost of delivering results, like those produced by the ChatGPTs of the world, and those increasingly generated in lieu of traditional search results, like by Google’s AI offerings that’re often plastered at the top of their search results pages, these days.

There’s a chance that AI could also be used to reduce overall energy consumption in a variety of ways, and to increase the efficiency of energy grids and energy production facilities, by figuring out the optimal locations for solar panels and coming up with new materials that will increase the efficiency of energy transmission. But those are currently speculative benefits, and the current impact of AI on the energy grid is depletionary, not additive.

There’s a chance, then that we’ll simply run out of energy, especially on a local basis, where the training hubs are built, to train the newest and greatest and biggest models in the coming years. But we could also run out of other necessary resources, like the ginormous data centers required to do said training, and even the specific chips that are optimized for this purpose that are in increasingly short supply because of how vital this task has become for so many tech companies, globally.

The newest concern in this space, related to future growth, though, is related to what are called scaling laws, which refer to a variety of theories—some tested, some not yet fully tested—about how much growth you can expect if you use the same general AI system structure, and just keep pumping it up with more resources, training data, and training time.

The current batch of most powerful and, for many use-cases, most useful AI systems are the result of scaling basically the same AI system structure so that it becomes more powerful and capable over time. There’s delay between new generations because tweaks are made, all that training and feeding has to be done, but also because there are adjustments required afterward to optimize the system for different purposes and for stability.

But a slew of industry experts have been raising the alarm about a possible bubble in this space, not because it’s impossible to build more powerful AI, but because the majority of resources that have been pumped into the AI industry in recent years are basically just inflating a giant balloon predicated on scaling the same things over and over again, every company doing this scaling hoping to reach AGI or something close to AGI before their competitors, in order to justify those investments and their sprawling valuations.

In other words, it’s a race to a destination that they might not be able to reach, in the near-future, or ever, using the current batch of technologies and commonly exploited approaches, but they can’t afford to dabble in too many alternatives, at least not thoroughly, because there’s a chance if they take their eyes off the race they’re running, right now, one of their many also-super-well-funded opponents will get there first, and they’ll be able to make history, while also claiming the lion’s share of the profits, which could be as substantial as the entire economy, if you think of those aforementioned benefits of being able to replace a huge chunk of the world’s total employee base with equally capable bots.

The most common version of this argument, that the current generation of AI systems are hitting a point of diminishing returns—still growing and becoming more powerful as they scale, but not as much as anticipated, less growth and power per unit of resource, training time, size of dataset, and so on, compared to previous generations—and that diminishment means, according to this argument, we’ll continue to see a lot of impressive improvements, but should not longer expect the doubling of capability every 5 to 14 months that we’ve seen these past few years.

We’ve picked the low-hanging fruit, in other words, and everything from this point forward will be more expensive, less certain, and thus, less appealing to investors—while also potentially being less profitable, and thus, the money that’s been plowed into these businesses, thus far, might not payout, and we could see some large-scale collapses due to the disappearance of those resources that are currently funding this wave of AI-scaling, as a consequence.

If true, this would be very bad in a lot of ways, in part because these are resources that could have been invested in other things, and in part because a lot of hardware and know-how and governmental heft have been biased toward these systems for years now; so the black hole left behind, should all of that disappear or prove to be less than many people assumed, would be substantial, and could lead to larger-scale economic issues; that gaping void, that gravity well made worse because of those aforementioned sky-high valuations, which are predicated mostly on what these companies are expected to do in the future, not what they’re doing, today—so that would represent a lot of waste, and a lot of unrealized, but maybe never feasible in the first place, potential.

This space is maybe propped up by hype and outlandish expectations, in other words, and the most recent results from OpenAI and their upcoming model seem to lend this argument at least some credibility: the publicly divulged numbers only show a relatively moderate improvement over their previous core model, GPT4, and it’s been suggested, including by folks who previously ran OpenAI, that more optimizing after the fact, post-training, will be necessary to get the improvements the market and customers are expecting—which comes with its own unknowns and additional costs, alongside a lack of seemingly reliable, predictable scaling laws.

For their part, the folks currently at the top of the major AI companies have either ignored this line of theorizing, or said there are no walls, nothing to see here, folks, everything is going fine. 

Which could be true, but they’re also heavily motivated not to panic the market, so there’s no way to really know at this point how legit their counter-claims might be; there could be new developments we’re not currently, publicly aware of, but it could also be that they’re already working those post-training augmentations into their model of scaling, and just not mentioning that for financial reasons.

AI remains a truly remarkable component of the tech world, right now, in part because of what these systems have already shown themselves capable of, but also because of those potential, mostly theorized, at this point, benefits they could enable, across the economy, across the energy grid, and so on.

The near-future outcomes, though, will be interesting to watch, as it could be we’ll see a lot of fluffed-up models that roughly align with anticipated scaling-laws, but which didn’t get there by the expected, training-focused paths, which would continue to draw questions from investors who had specific ideas about how much it would cost to get what sorts of outcomes, which in turn would curse this segment of the economy and technological development with more precarious footing than it currently enjoys.

We might also see a renewed focus on how these systems are made available to users: a rethinking of the interfaces used, and the use-cases they’re optimized for, which could make the existing (and near-future) models ever more useful, despite not becoming as powerful as anticipated, and despite probably not getting meaningfully closer to AGI, in the process.

Show Notes

https://arxiv.org/abs/2311.16863

https://www.weforum.org/stories/2024/07/generative-ai-energy-emissions/

https://epochai.org/blog/will-we-run-out-of-ml-data-evidence-from-projecting-dataset

https://www.semafor.com/article/11/13/2024/tiktoks-new-trademark-filings-suggest-its-doubling-down-on-its-us-business

https://arxiv.org/abs/2001.08361

https://archive.ph/d24pA

https://www.fastcompany.com/91228329/a-funny-thing-happened-on-the-way-to-agi-model-supersizing-has-hit-a-wall

https://futurism.com/the-byte/openai-research-best-models-wrong-answers

https://en.wikipedia.org/wiki/Neural_network_(machine_learning)

https://en.wikipedia.org/wiki/Neural_scaling_law

https://futurism.com/the-byte/openai-research-best-models-wrong-answers

https://futurism.com/the-byte/ai-expert-crash-imminent

https://www.theverge.com/2024/10/25/24279600/google-next-gemini-ai-model-openai-december

https://ourworldindata.org/artificial-intelligence?insight=ai-hardware-production-especially-cpus-and-gpus-is-concentrated-in-a-few-key-countries

https://blogs.idc.com/2024/08/21/idcs-worldwide-ai-and-generative-ai-spending-industry-outlook/

https://explodingtopics.com/blog/chatgpt-users

https://explodingtopics.com/blog/ai-statistics

https://www.aiprm.com/ai-statistics/

https://www.forbes.com/advisor/business/ai-statistics/

https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai

https://www.researchgate.net/profile/Gissel-Velarde-2/publication/358028059_Artificial_Intelligence_Trends_and_Future_Scenarios_Relations_Between_Statistics_and_Opinions/links/61ec01748d338833e3895f80/Artificial-Intelligence-Trends-and-Future-Scenarios-Relations-Between-Statistics-and-Opinions.pdf

https://www.statista.com/outlook/tmo/artificial-intelligence/worldwide

https://en.wikipedia.org/wiki/Artificial_intelligence#Applications