The AI extinction myth & Europe’s tech collapse

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2:02Certified to operate by chef. Welcome back to the Econoclast, an edition that will be devoted to AI in the week when the Houthis took control of parts of the bubble Mondaybb straight and the oil price shot up again to over $100. But the main theme really this week for us is going to be AI, following the warning by the CEOs of the two largest AI companies, OpenAI and Anthropic, to reduce the scale of development. To debunk this thesis, I think Janis is well placed and I'm handing over to you. We will discuss other aspects later that will be my theme in the second part, but over to you Janis now. Well, I'll give a very brief, by the way, good morning, Bobcon. Hello to everyone. Hello to our fellow Econoclasts. The orthotics team, which I'm going to be taking to task today, is that somehow,

3:04this view that AI bosses got scared of their own creations and that they now fear that their own bots will wipe out humanity. And that this is the orthotics team, which I'm going to be attacking. That they are now asking governments and the rest of us to stop them. And I'm going to be arguing, well, nothing will be further from the truth. Tech Lords are folks like Anthropics CEO, Daniel, Amode, OpenAI, some Altman, Elon Musk. What are you doing? It's something quite different. They are confessing to the sin to claim the glory, to advertise their wares, and to use governments and us thinking that we are completely buffoons in order to enhance their power over us. But before I go get into this, tell our audience what you're going to be concentrating on during the second segment. I will talk about China, it's sort of a follow-on and Europe as well. It's a bit of a follow-up of what you're saying of the themes that you're debating. I will make the point that any such collusive strategy that they're proposing cannot work, because China is not going to be part of the cartel.

4:06And my second stront of argument is that this whole thing, you know, leads the Europeans up the wrong tree. And why this development is particularly a dangerous moment for the Europeans. But over to you now, Janis. Well, thank you, Wolfgang. We'll have a lot to say about Europe. I read by the way the Mario Draghi article in the Financial Times, which I think is quite indicative of the trouble we are in Europe. If Mario Draghi cannot come up with better ideas than that, but I'll leave this for the second segment. Off to a flying start. By the way, folks, I'm really pumped up. I read Old Knight last night, the 3,800 words by the CEO of Anthropic, and I got pretty pived. You'll see this in a moment. So now that we heard them speak, we have heard it all. A handful of quasi-mad religious fundamentalists, Silicon Valley tech lords, who fancy themselves the midwives of a god, who cut every corner on safety,

5:06who control and disseminate the most formidable, uncontrollable, and inscrutable technology ever forged by human minds and human hands. These very people were hellbent on weaponizing AI to dominate us, to steal from us, to destroy and enslave other humans. Yes, these people have the audacity of putting on a pantomime now, shouting at us, the audience, their audience. Please, please, containers before our bots kill you all. The last thing they want is for our governments, for us, seriously to contain them. But let's begin at the beginning. Is AI dangerous? Of course, it is dangerous. All new tech is dangerous because it reveals how terribly humans are treating other humans. That has happened since time immemorials. This is the age of iron. But AI, in particular, of course grants its owners immense power, that they will invariably weaponize to do damage to the rest of humanity.

6:08But this is not AI's fault. Now, I want to be very precise and a little bit more technical than usual. Take the recent episode when open AI bots supposedly broke out and attacked another company's called Hanging Face platform. The media fell into the trap of a fairly moral lesson, announcing that SkyNet was upon us, that the singularity had happened, that rogue bots have escaped. Now, the next time they escaped, they may kill us all. The truth, of course, is far less heroic than that. Now, suppose you are a high school pupil and you are working on a computer in your school's library behind your school's firewall. And the firewall that the school has imposed, it was put there to prevent you, the pupil, from accessing the full internet, you know, pornography, whatever. Now, suppose you have access to a chatbot and you ask your chatbot, how you might avoid bypass the firewall to get some prohibited by your school information.

7:13Now, the chatbot consults its training data and suggests several commands that you might try. Now, you, the pupil, try them out one after the other and maybe if one of them works, you have escaped your school's firewall. Now, this is not the fault of your AI. This is you doing it. Now, instead of this example, suppose you're an AI agent, developed by one of these companies. What is an agent? It's a script. It's a bit of code. It's called a Python script. It's a recursive loop which runs commands suggested by the chatbot and then asks the chatbot what to train next. So if you have given as the engineer of that lab of that company, you've given your Python script the instruction to escape from its firewall. Okay. And it consults the chatbot. What does this mean? Doesn't mean that AI has gone rogue. It means that you, the engineer, have instructed a particular piece of script to try to break out

8:16and the training data that you have made available to them included enough ideas for them to succeed. So whose fault was it? In the case of Hagenface, it was, of course, open AI's. Its managers, its engineers, did not prevent their Python script from executing random commands one after the other iteratively. Commands that would lead to an attack on somebody else's platform. Now, these companies do not need a government or you or me to stop them from doing damage, to keep a human in the loop to verify which commands the chatbot is suggesting before allowing them to be executed. These companies could have done it themselves. If they were serious or if we were serious about all this, our governments should stop us infoting around them. Now, here's what a conversation in real, in the real world between tech loads and our governments is really like. The tech loads are saying to governments, we are quite likely to

9:17kill everyone. Please stop us. This is a false claim, of course, intended to raise their profile. What they're doing is they are confessing to the scene to claim the glory. What they're saying is, look, we created Satan. Stop us. And what they want us to hear, what they're winking at us, the real message is, don't you want the piece of that Satan? And how do governments respond to this? Well, they say to the tech loads, can we give you a tax break? Would you like us to help you build another data center? It's all a cynical, dreadful fraud of a debate. If governments were serious, the first thing they would do is legislate to make big tech financially and criminally liable for any supposed breakout. In the same way that they would make a company liable for an intern, let's say, inflicting criminal damage upon a third party. But of course, they're not doing it. Instead, we have the shadow play between two great actors, actors according to some

10:21sociopaths, according to others, who are these two actors? Somebody like Dario Amodev and Thropic CEO, who, as I said at the beginning wrote a 3,800 word essay pleading with Trump to contain him, to contain anthropic, open AI and the rest of the large labs. And the second actor, the great Donald himself, who replied, more on, nothing to see here, no need to restrain you mate, just beat the Chinese, win the AI war. Now, Amodev is long essay, if you read it carefully, it makes for fascinating reading. And the gist of it from where I'm standing is this, what he's saying is to Donald Trump, to the government, imposed antitrust controls on our smaller competitors, released us the big boys from any serious antitrust controls, snuff out our much more sensible Chinese competitors. And in return, we Silicon Valley tech large, open AI, anthropic, Elon Musk's

11:22croak and so on, we promise to, you know, set it amongst ourselves, to agree amongst ourselves, not to compete too hard. And once you have shielded us from all competition, particularly Chinese competition, well, we'll spend some time reflecting on what it is that we're doing. Oh, and by the way, he adds, make sure the military does not pause at all. Now, that last bit is absolutely crucial. Palantir, the NSA, the CIA, also some other organizations are already using customized versions of a tropic, of chat GPT, of crock and so on, that have been stripped of all ethical guardrails, to mass assassinate, to bomb, to getnab, to propongadise, to hack, to spy. It is these littleized forms of AI that I fear might escape, on purpose sometimes. And if not take over, the world, I don't think they can, at least they can do a great deal of damage. So to conclude,

12:25both them, I don't believe that anti-translose or any other form of regulation can ultimately defeat this unholy alliance of big tech, big finance and big government. Also, while humanity is a brilliant species, we must not forget that. The majority of us are quite weak-wield, and the large minority of us are quite evil. And AI, because it's so powerful, it grants bad people, tech loads in particular, immense power to steal, destroy and then slave other humans, as they always have done, when they're power in balance, in society has been great. When they engineers themselves, why am I saying that regulation can't work? Because when they engineers themselves have no clue how their prompts lead to observed outputs, they don't understand how they go from inputs, prompts to outputs. The very same people who actually created these bots. Well, no government can regulate the damn thing. Nothing short of the total socialisation of

13:28cloud capital, like that's what I call this form of capital, which is now enmeshed with AI. Nothing short of its socialisation can save us from tyranny, and possibly from, at some point in the future, extinction. If this socialisation does not happen, a resistance will be at only the alternative. People out there will eventually resist, they will fight against their subjugation. But, without socialising cloud capital, I very much fear of that our resistance will lead to endless surveillance, to repression and to manipulation. Because this is the cheapest option for AI-dominated political economies. So who knows? Your take. You stopped waiting for permission and started building yourself, your dreams, your credit. Experien't boost could turn your on-time payments into instant FICO score gains. Every bill you paid could become proof of your power. Self-made? Absolutely. Self-funded?

14:31Experien't could help you get there. Download the Experian app today. Results will vary. Not all payments are biz-delligable. Some may not see improved scores or approval odds. Not all industries credit information impacted by Experian Boost. See Experian.com for details. Experian! If you felt stuck trying to lose weight, you're not alone. Enter weight loss by hers. It's designed to support you in reaching your goals. And hers now offers access to an affordable range of FDA-approved GLP-1 medications, including the Wigovipil and the Wigovipen. Even better, with a range of affordable GLP-1 options, hers makes it simple to find an approach that fits your needs and your budget, if eligible. You'll get a treatment plan personalized to you and unlimited dosage changes as needed. It's weight loss designed to work with your life. Ready to reach your goals? Visit for hers.com slash eligible to get personalized affordable care that gets you. That's F-O-R-H-E-R-S.com slash eligible. For hers.com slash eligible, weight loss by hers is not available in all 50 states.

15:32Wigovipil is the registered trademark of NOVO Nordisk AS. To get started and learn more, including important safety information, Wigovip Clinical Study Information, and restrictions, visit for hers.com. My take is similar, not entirely in terms of your ultimate conclusion, but certainly in terms of analysis of what happens. I also believe it's essentially a fraud. The idea that they want to impose external constraints on themselves, I see that very similarly to the way you do. Amore Day, and you mentioned the CEO of Anthropics, done it many times before, he keeps on saying to us that his models are so dangerous that we can't, he can't possibly release them to us. He did, as he used to work for OpenAI before he found it, Anthropics and became a CEO, he keeps on turning his stuff into two dangers for you. I agree with you, this is a marketing strategy.

16:33And the US government has helped him by banning it. That was the best thing that they ever did. They banned the release of one of his models this year, Mythos, as it was called, to non-Americans. This was also a ban to Europeans. That increased the whole mythological appeal of these models. There must be something about Mythos that we badly need and we badly want. And it's unsurprisingly that his company now has overtaken OpenAI as the main AI company. This used to be a world of chat GPT. OpenAI is still in the business, but the excitement is mostly his company now because of this very successful marketing. Also his decision to target his AI towards the business sector towards the military sector that has proved to be commercially more the most successful strategy. He is not intending real external regulation. I agree it's a competitive thing is to keep competitors out. This is definitely what this is about. And it's sort of interesting that the AI industry has already in this very short period of time,

17:36gone through an entire cycle that already there at this position where they can only maintain their global lead through this through regulatory capture. Here I agree with with your analysis that this is really not about a fair of these stupid stories, about 10% chance of mass extinction and all this stuff. They couldn't care less about this. And they also know this is not true. What is useful about these stories is that it gives sort of it's gas people and it gives them sort of the sort of a hold on the story and the idea that oh there are the good guys because they are imposing regulation when in fact this is really a cartel. Now many other people in the industry like Nvidia and sort of have criticized this have they've seen through this. This is just to perhaps struggling AI companies who have raised expectations amongst their own shareholders and investors beyond what is justified. And they're now trying to roll back that may well be the ultimate the ultimate reason. The industry as a whole the AI industry as old doesn't buy this story.

18:38This is Elon Musk, Darryl Morde and Sam Oldman who tell us the story. This is not the AI industry as a whole. And you know for all his you know faults and you know we've been criticizing Donald Trump you know profusely here on this podcast. You know I think he called this right. He said don't forget about this. You cannot you cannot do this with Chinese out there. This is no longer our technology. This is not a proprietary technology. You know the models the AI models are open source anyway. The algorithms are open source. Not the data not the not the not the not the precise functioning of each of those models are not all the richness that they contain. That's clearly not open source. The Chinese have chosen open source models. The American set you know bet them bet the house on proprietary models. The Chinese are choosing the open model strategy. The open source strategy. Some American competitors are also now crowding in on the open source markets. So this market is becoming far much more much more perfect as a competitive market. And I think

19:39what this this thing was. What this thing did was in the tent to maintain the old cozy duopoly between those two giants. But in the face of a fast-changing reality and we've seen that you know I can call other competitors have catching up with them. They're not the only ones. So this is most likely you know just just the rules just an attempt to save. Something goes wrong in the future they can always it gives them the sort of bragging rights to say look we taught you so. I want to just briefly address this claim that the the idea that you know people hinted the creator the British scientist computer scientist who founded one important strand of modern AI and the disgruntled employee from anthropical resigned and told everyone there's a 10% chance of AI destroying all of humanity by the end of this decade. This is an oddly precise forecast. Now we have to first say that when people put percentages on future events like this this is almost always. In fact not almost this is always bogus. There's no basis for 10%. It's just a gut

20:40feeling that translating a gut feeling into something that's supposedly precise. It's actually not easy to conceive of a technology that can kill the entirety of humanity. The only thing that I can think of is for a iPods to gain access to nuclear launch codes and launch a nuclear war that apparently is not their main scenario even if AI were to gain access of the entirety of the internet which is you know a probably a plausible worst case scenario. It will still not kill all humanity you know all the tribes that are not connected to the internet not even to electricity in the world will certainly not be extinguished and even you know we can probably live and survive here in the industrial world without access to the internet. You know it may be that food deliveries might not happen because they have to mate themselves depend on the internet hospitals much shut down. So yeah it would cause massive damage but extinction of humanity is such an exaggerated claim you can already call it out on this on this alone and you know if for people to react to this type of hype

21:43with this sort of with this idea that all we need regulation out in order to prevent the 10% chance of of our extinction is to me more than this on us. Where I differ from you is not so much in the in the analysis of the situation where we completely in agreement I am less I'm less you know worked up about people's intentions because my experience with us with these guys is that they're probably you know they're probably don't see themselves as evil they're probably you know I see them behaving very much like industrially behaving previous times they just have bigger capital they just can do bigger damage but the the patterns of their behavior is the same of industrialists I have met again and again in my life it is what industrialists do when they lose market share they're called for the government they're called for regulatory responses you know the biggest regulators are not you know consumers they're up companies its companies trying to protect protect themselves from competition that's what regulation does

22:44mostly consumers play a role and you know other parts of society play a role but the reason why in Europe we have an anti-tack of regulation it's basically it's companies that try to protect aspects of their market share against intrusion from others it's always been that way and that's the case in the United States as well it's no this is not a not a genuine concern and I think if anyone had expressed genuine concern it's politicians and you see you see this quite strong in the democratic party now where former president Obama is now you know telling his party that AI is the big theme and I agree and they need to think about regulation in a way they never thought about this before one shouldn't think about it in sort of these gut level responses so to kill the industry is clearly not not a smart thing when you know China doesn't democrats were particular always strong in their sort of opposition to China I mean the previous administration on the Biden was very much anti-China an intelligent AI strategy is actually something that that needs some thought my own view is would be to encourage open source developments and to actually

23:46increase competition to make sure that these cartels are broken as far as computing power is considered the only chance is through a very different energy policy and this is where the ultimate irony irony lies with Trump Trump actually has business instincts and he understands these business relationships sort of instinctively you know you know probably better than most politicians but his energy policy is completely inconsistent and will not give him what this industry needs to succeed so so there are a number of things that don't adapt and we'll go on to go further into this this theme in the second section it's personally taking issue with a couple of of your points firstly I have no doubt that in terms of the moral fable of the man Amade and some ultimate they are not different to the CEO of Volkswagen who was responsible for instance remember back in the day for introducing technology to cheat it when it came to monitoring the exhaust levels of cars none of them are particularly evil none of them are good people but it is the form

24:50of capital that they have in their hands well that makes a big difference Volkswagen just wanted you to buy a car what's the ultimate and mask these people they want to own everything about your life including your mind processes I think of Newerling think of the way in which these chatboards are embedding themselves in our consciousness the quantity has haggled the totals leads to quality so the the evil becomes enhanced the both quantitatively and qualitatively as a result of what these machines do so let's point number one point number I think you're giving a buy to Donald Trump which he doesn't deserve yes on the one hand yes he does have his business instincts and what he says to people like the CEO for anthropic is all right I pull the other one move on beat the Chinese but by this attitude of you know laissez faire do whatever you want as long as you beat the Chinese he's bringing on Armageddon himself this clash between the United States and China

25:50which began with Trump 1.0 and then was turbocharged by Biden with a chips act this is not going to leave humanity in good stead are we facing a clear and present danger well we are not facing it it's not something my worry of course not that you know in two months or two years these spots will wake up and plot to wipe us out my worry is what already is happening against humanity by these tech lords who are hiding behind AI and I'm going to give you a couple of examples first example is the killing of more than a hundred and twenty school children in minab at the beginning of the United States and Israeli attack against Iran they hit behind AI the you know the news of the of the day was that Claude was used in order to target wrongly that school where you know a hundred and twenty hundred thirty school girls were eliminated it wasn't AI that did it

26:51it was volunteers much much older pre AI software and the fact that they were military officers who were very flustered by the fact that they were forced by the volunteer person sitting next to to approve within a few seconds the targets that were chosen by a volunteer so these people are hiding behind AI bots that simply played a very minuscule role in the case of the minab tragedy and another example amazon has been using them now for six years a form of AI that others have very effectively like deep mind in order to design antibiotics that have saved human lives amazon has used exactly the same AI bots in order to decide which warehouses to shut down because there was an enhanced probability of unionization these are crimes that have already been done against humanity against labor hiding behind AI technology it's not the fault of AI it's how AI

27:58is being used and the question is can you regulate it I don't believe you can and that's why I think that our event Friday on the 18th of September in London at the unheard building is going to be so important because we're going to be talking about exactly that our technology has a very high probability of killing capitalism and what comes after it yeah and I would agree this is the theme the theme of our time more on this and our second sections don't go away just after the end of the Soviet Union Frederick Jameson wrote that for many it had become easy to imagine the end of the world than to contemplate the end of capitalism well Janis and I will be doing exactly that we'll be stripping away mainstream delusions to ask is free market capitalism dead and if so what comes next you can tune into the live stream of the iconoclasts live on the 18th of September at 7 p.m British summertime simply by becoming an unheard subscriber today go to unheard.com forward slash

29:03iconoclasts live you stopped waiting for permission and started building yourself your dreams your credit experience boost could turn your on time payments into instant FICO score gains every bill you paid could become proof of your power self made absolutely self-funded experience could help you get there download the experience app today results will vary not all payments are some may not see improved scores or approval odds not all industries credit information impacted by experience boost see experience dot com for details if you felt stuck trying to lose weight you're not alone enter weight loss by hers it's designed to support you in reaching your goals and hers now offers access to an affordable range of FDA approved GLP1 medications including the WIGOV pill and the WIGOV pen even better with a range of affordable GLP1 options hers makes it simple to find an approach that fits your needs and your budget if eligible you'll get a treatment plan personalized to you and unlimited dosage changes as needed it's weight loss designed

30:06to work with your life ready to reach your goals visit for hers dot com slash eligible to get personalized affordable care that gets you that's F-O-R-H-E-R-S dot com slash eligible for hers dot com slash eligible weight loss by hers is not available in all 50 states WIGOV is the registered trademark of NOVO nor disk AS to get started and learn more including important safety information WIGOV clinical study information and restrictions visit for hers dot com welcome back to the conoclust today we are focusing on AI and we're being highly critical but at the same time economic plastic so Vulkan I think you want to talk about Europe again in the context of AI but also other stuff so go ahead China and Europe and I think they're kind of separate themes but we I think we need to explore the China angle of our conversation a bit a bit in greater depth China is no longer just the other country that does a little bit of AI China

31:10is a major competitor and in my view it could become the world leader in AI not because it good you know it started it and China was in many ways a lagot and still is a lagot the best models right now are American but what China did it kind of caught up with us there was obviously this the famous deep seek moment in early 2025 when this Chinese model was launched and it became an instantated it was almost as good as the other ones and it was so free and people couldn't believe that China was able to do this but ever since there have been new models including a model that was lost most recently that was not only highly performant it was practically as performant as the the the frontier models of the US industry but it also was an open source models that allowed us to actually download the model basically to our computers or the you know the bits that matter to our computer that's a huge important deal and the Americans got very concerned about how this would

32:13impact the profitability of the industry because if open source models prevail you can still make money this is not a you know as I said in the first session this is not a giveaway this is just a different business model the current business model in the United States is very much based on the classic proprietary technology model where investors spend a lot of money and these companies justify these big investments and these big share valuations through monopoly profits or oligopoly profits this is really how how you repay these these these strong investments with open source models this can no longer be guaranteed because you can you can you can no longer claim these cartel monopoly profits you you can still do things but it's not not that kind of excessive profit that you can make in order to justify the the massive the massive lending and the massive share valuations so the Chinese have something that the Americans don't have they have a better energy policy and they also are kind of lucky in terms of their geography China's building is data centers in the north

33:16in places like in the Mongolia places that are warm have a lot of sunshine and a lot of wind at the same time these are ideal conditions for renewable energies we Europeans are not in that position and China unlike the Europeans has invested eight tons of money is really off the charts into into into renewable energies now we always complain about China being in you know fossil fuel consumer yes they are but they are also the world's biggest investor in renewable energies and that's where the future is and that's where the you know that's what powers the data centers they don't they're not powered by oil or gas it's not like in the United States where data centers compete for electricity with homes and communities in China this is in in in far remote places where electricity is produced by you know solar panels and wind power wind energy so these are sources of energy that are free basically and that's where China's expansion is China's caught up on

34:16semiconductors this was one of the probably the biggest policy era of the Biden administration probably the biggest American policy era in the 20th century and the 21st century to try to capture China off the semiconductor market and thus force China into a development where it now is becoming competitive on semiconductors they're not quite there yet where the the top level of the Americans but they're getting closer as well and in this race it doesn't really only matter whether you are just a millimeter ahead this is about you know can you actually leverage this do you have the political support because this is also not guaranteed in the United States where you know the Democrats are now identifying AI as an important policy if I was the advisor that's exactly what I would tell them too that's where I would go you know we've been talking about AI on the economic class for a long time when it was not a subject of polite conversation in Europe but it is an important subject and it's becoming more important and that is exactly the thing they need to talk about at the next election to give a counterpoint a credible counterpoint

35:19to the republics rather than trying to compete with them as the you know the billionaires as the party that is most most amenable to the interest of billionaires which the Democrats partially were before so that is something that is changing in America but not in China so there is any possibility that China might turn into the world's premier center for AI research and also because China is focusing on the right part of AI it's not about you know dominating our lives as you I think rightly put it I am actually in agree with with you that that the executives while they're not fundamentally different and their motivations everybody wants power and control and make money they're not fundamentally different the scale is different the investments are different and what this the technology can do is different that is I completely agree but the Chinese are focused on something really important which is the combination of AI and robotics how AI works together with machines factories how you can produce things all the little you know toy robots we

36:27see this humanoid robots that fight boxing matches or that run 100 meter races and win and break world records these are just games you know they do this because in order to develop a proper human oid robot you need to go through a lot of functions the human is a very complex engine that is not fully understood and it will take a very long time until these humanoid robots you know are as good that they can you know that they can repair a pipe it's not easy for a humanoid robot to actually change a tire in a car this is a skill they have as of yet not learned so this is still a long way off and this is very much where China is is leading the US is also researching in that direction they're also formidable US companies in robotics but it is a Chinese specialization and given Chinese specialization in manufacturing this is something where which which would then have macro economic consequences because it would it would hypercharge China's manufacturing and I can already tell you that the the continent that is not going to benefit from this is Europe

37:32Europe's biggest mistake wasn't to not been in the first in the Vanguard of AI Europe didn't have the preconditions for this but Europe could have said that you know because it has this engineering know how it has this huge industrial companies huge pharmaceutical and chemical companies this is very much the lifeblood of the European economy Europe could have said okay we are not the biggest world's biggest consumer we're gonna we're the biggest producer this is not an industry where we excel and that's that's indeed the case but we might be the world's premier consumer as often in life now not welfare isn't only added through exports more often in life it's added through imports imports allow us to consume things we could not grow at home or we could produce at home imports is what produces the welfare cheap imports and obviously we need to pay for the cheap imports by exporting goods but welfare doesn't come from exporting alone and the Europeans could have said because they're running a trade surplus with the rest of the world to say look look this is a technology we're importing we're happily importing and we're using so let us be part of the process

38:33let us invest in this process so we can actually garner some of the advantages of AI and make us more competitive more productive that didn't happen the Europeans tried a parallel track to develop foundation models that failed they didn't the companies by and large did not invest they gave themselves data protection laws that made it impossible for companies to leverage their data this is quite dramatic and I think you know I've been sort of going on about this GDPR the general data protection regulation this is basically an AI killer you know your companies are supposed to destroy that data the customer data after five years very limited handling of data you cannot grow a business on that and yes it might make it live a little bit more difficult for American AI companies but it also means you don't have your own and whatever technology areas it's about us adjusting to that technology and said we should have focused on saying okay we'll we'll use first of all we use Chinese and American models this is part of our you know bit to remain sort of

39:33independent here and not not rely on one one side only and secondly we go into focus on the intersection between how AI can work and how can AI can help us become more productive there's something that didn't happen in Europe this lack of seriousness was pretty much the dominant theme of Europe's agenda there's been a report out right this week written by you know a large group is a large committee there were two Nobel laureates and an in them then also also you know geopolitical and economic experts recommending of what Europe should do and they're still hanging on to delusions about what you can do about oh we can still catch up on data centers we can still catch up on computing power and the answer is no you can't you really mess this up this is not going to happen there isn't a path forward I think it's time for Europeans to recognize that this is not an industry in which they will gain a foretold and instead the path the plan B is to say okay let's let's consume this and let's actually be smart and let's protect the other industry and let's use AI to give us a you know to to to make our life better but that is not happening and that's why

40:36why my prognosis is that Europe is going to get squeezed by by those two developments America being you know ever more sort of aggressive in its AI commercial strategies and to the extent that we are now cutting ourselves off from China this is not very much the result of what the EU does you know our trade policies we're becoming part of the American sphere in terms of our relationship with China that didn't use to be the case you know we are now part of the more part of the Western world than we were ever before despite the fact that Trump is president which is kind of the the irony I think you know the right response would have been why I thought I would have sought naively maybe that the right response of Europeans would be to say let's become a little bit more independent you know we stand up on feet we're in charge of our own defense we depend less on the United States for all these sort of life preserving technology so you know we we and we shop around wherever we think we want to shop around but instead we're taking on America's position on China and that already shows that the AI battle is not going to be fought in the way that a lot of

41:40people think so that it's just a technology that we can control you know this is already the geney is out of the bottle and it cannot be put back in again this is where where we where we Europeans are going to be squeezed despite of our joy that we that many Europeans expressed at last weeks acknowledgement by American tech companies that what we talked about in the first section about the oh let's regulate ourselves the Europeans you know many Europeans are so in sort of mine and you know the people that I follow and talk to where they're all set or many of them said oh this is wonderful finally our skepticism has been recognized and you know it's finally moving our way and my message to you is no it's not moving your way I think your fools yeah they didn't they didn't realize that they were being trolled by people like Daria Mo de Volkhan I'm going to start from your point correct point that the Europeans saw big tech and what I call cloud capital and later AI as a commodity and they thought okay well if we can't produce it as you said we can import it and we can produce

42:43other stuff like Mercedes-Benz's two points here the smaller point is that you know this you can remain a developed nation or block if you import commodities with low value added and low skill input and you export high value added and high skill input commodities you can do that what I didn't understand is that AI and you know cloud capital and so on is the you know the top of the feeding chain and if you give this away you've given everything away the second point which I think is much larger I have this strong belief that what cloud capital AI does is do you use it's got a dual nature so there are uses that produce services that are commodified like every time you subscribe to anthropic to Claude to use Claude you're buying a capitalist commodity a capitalist to produce commodity that's the commodity nature of AI of cloud capital's output but then that's

43:49not the whole story actually it's a very small percentage of the story because what AI does produce aside of commodities is something else power so when you enter Google to search either using the search engine or today Germany effectively you develop a dialectical relationship with machine you're not paying for it it's free but what happens is you become and broiled in a relationship with that company without platform that exerts immense power over you the more useful stuff it gives away to you and that power then can be weaponized by the owners of that pile of cloud capital in order to extract economic grants from you the vast majority of the increases in the capitalization of those companies the magnificent seven in the New York Sturking chain to not come out of selling as commodities but they come out of this immense power of cloud capital over us which stems from

44:57its capacity to manipulate our behavior and to extract grants every time you buy something out of amazon Jeff Bezos gets 40% this is a remarkable power that he has he's not producing anything and you know the european has never understood that the chinese understood it so i'm bringing in china injects a position to europe injects a position to silicon valley so you've got three models you've got the american model the silicon valley model which increasingly is not only closed source as you said and this is important but it is also closed source software technology the purpose of which is to manipulate people to manipulate our behavior and to extract grants from other capitalists not from commodities that they themselves produce that's the american model then the chinese model as you said is open source which is one of the reasons why they're going to dominate the rest of the world i'll come back to this in a moment but not just open source open source as you put it correctly that is linked to machines robots that actually produce stuff produce commodities

46:01so the difference between the american and the chinese models the american model is closed source and intended to extract cloud grants by manipulating our behavior you have the chinese model which is open source far more democratic in other words far more sharing the technology including with the third world with what must be used to be called the third world the developing world the global south quality what you might and it is technology that has the purpose of actually creating material stuff that people buy and use and where is the european model nowhere europe as you said i'm going to put it even more emotively and desperately europe is nowhere it's finished it's not that we are going to lose the a i-ray we're not in the race you cannot win a race in which you're not a participant and this was a choice and i think last week we had a remarkable confirmation of one of the smartest people in europe somebody i know personally somebody with whom i clashed with

47:04whom i disagree but whom i recognize as a good mind wrote an article in the financial times it was 9.11 it was published and that someone was my draggy and the article i have it here in some of me it's called europe's difficult choices on the AI and here's a smart man smart european with masses of experience on you know what can be done in europe with the existing institutional framework and he comes he tries very hard to come up with a positive story of what europe can do with the AI if you read it i'm not going to recite it for you in a sense it's nothing all he says is that you know we've lost the race when it comes to producing this the software but you know at least we have one thing we had a large continent we're quite rich we have a lot of data and we have a lot of demand for these things we should bind together to form a cartel which will should work as a monopsyny to extract to gain power over silicon valley because we are a big buyer and olicopsynistic or monopsynistic buyer that is rubbish it's never going to work because if the

48:09others have the power of cloud capital the american silicon valley this is not you know it's not like australian japan in the 1980s australia was producing all the iron ore that japanese still making needs so you had a bilateral monopoly monopsyny kind of thing we're even rebalanced but here's not evenly balanced because people like Dario Amade and some oldman they control the minds of europeans this is exactly the sheer power of this cloud capital especially of the silicon valley version so we have a major clash between the united states uh form of cloud capital ai and the chinese the chinese are already electrifying not only their energy grid but also the capacity of african nations of indonesia of maelasia of southeastern Asian nations to actually increase massively the productivity of their manufacturing through this combination of ai and robotics

49:13what can an anthropic offer maelasia nothing because anthropic have this immense power to control people's minds they're going to share it with the maelasia government or with maelasia institutions except their own franchises in maelasia so we need to have a very serious thing about where this world is going it's certainly not going to stay where it is when this is not a recapitulation of patterns we've seen in the past uh u and i are going to be discussing this friday night the future of capitalism i don't need it has any the question is are we going to end up with a start like utopia where these technologies serve us or are we going to end up with a society where the matrix the movie ends up being a documentary where we are appended to the machines that are our masters and this is a conversation to be continued i think we'll wrap it up for today uh thank you for

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