We’re moving towards a scaling method where we don’t even understand the model’s internal thoughts.
Literally speed running Tower of Babel.
Some architectures could weaken CoT monitorability, or remove the CoT altogether.
We've written a proposal for how companies could be transparent about no-CoT reasoning abilities, other monitorability evidence, and policies for preserving monitorability. redwoodresearch.org/blog/pro…
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What’s funny is this is wayyy below semicap comsensus.
Microsoft reportedly plans to grow its data center capacity from ~12 GW today to 38+ GW by 2032. More than +26 GW added by one company!
Capacity centered on AI-specific chips rises from ~2 GW to ~13 GW, a 6x, yet still only a third of the planned fleet!
That remaining two-thirds also matters for AI: newer tools need more CPU capacity alongside GPUs. The infrastructure buildout extends well beyond accelerator clusters, with Microsoft already turning away some AI and cloud business because of capacity shortages.
Figures from Bloomberg’s reporting on internal plans.
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Top.
Pokémon cards would be global currency during apocalypse, venture capitalist predicts trib.al/ls6ZaZL
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Instinct, GrokBot, Muse.
I think we’re on the cusp of a new AI “scaling era.”
Era 1: Chat: AI becomes a useful conversational tool.
Era 2: Reasoning: Models spend more time working through harder problems as chain-of-thought reasoning is introduced.
Era 3: Local agentic: AI starts doing work on your behalf, primarily for white-collar “power users” willing to set up the tools.
Era 4: Seamless agentic: Agents operate in the cloud, behind a simple interface. Put more plainly… agents for normal people.
Giving agents serverless virtual machines & models adept at computer use, all in an intuitive UI... is a new unlock.
Probably good for another leg up in compute demand.
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Possibly the most powerful moral choice in all of the Lord of The Rings comes from Galadriel at the end of The Fellowship of The Rings, when Frodo offers her the ring.
The crux of Tolkien’s moral philosophy compressed into one line: “I pass the test. I will diminish.”
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“And now at last it comes. You will give me the Ring freely! In place of the Dark Lord you will set up a Queen. And I shall not be dark, but beautiful and terrible as the Morning and the Night! Fair as the Sea and the Sun and the Snow upon the Mountain! Dreadful as the Storm and the Lightning! Stronger than the foundations of the earth. All shall love me and despair!”
She lifted up her hand and from the ring that she wore there issued a great light that illuminated her alone and left all else dark. She stood before Frodo seeming now tall beyond measurement, and beautiful beyond enduring, terrible and worshipful.
Then she let her hand fall, and the light faded, and suddenly she laughed again, and lo! she was shrunken: a slender elf-woman, clad in simple white, whose gentle voice was soft and sad.
“I pass the test”, she said. “I will diminish, and go into the West and remain Galadriel.”
The lore behind this is if you're powerful enough you don't just attract the wraiths, you actually can command them, & use the Ring to bend others to your will.
The Ring has the effect it does on Hobbits because they are naturally of the hiding & running away sort, not the powerful, willful sort.
You know how Saruman was able to build & command a huge army of Orcs, humans, & half-Orc-half-humans? Well it's not because he was paying them, it was because his will was in their minds, pushing them to follow his commands. With the Ring, he would be the single greatest power in Middle-Earth, & be able to wrest control of Sauron's own armies from him & use them against him.
Even someone like Boromir, who was a great captain of Men, could potentially actually wield the Ring to this purpose. The armies of Gondor would fight not just because they wanted to save their homes, but because the will of Boromir, amplified by the Ring, drove them forward. And he could potentially bring others to his side by force of will as well.
But the Ring is more powerful than anyone who would use it against Sauron. It's actually more powerful than the part of his will/spirit that was left outside of it. If they used it against him, it would corrupt them. Sauron would win in the end, even if the other portion of his spirit was defeated, because the Ring would take over the wielder & effectively Sauron would rule through the body of that wielder, be it Boromir or Galadriel or even Gandalf.
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This week provided a Rorschach test for your views of the AI Value chain.
Frontier Labs pulling away? Fable 5.1 and Astra w/ both having more advanced models internally.
Others catching up? Muse 1.3, Meta hyping Watermelon. Grok bot scaling. Gemini 3.8 efficient. Positive Gemini 4.0 rumors.
Catnip for both “labs pulling away” and “frontier getting more crowded” crowds.
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People hoping that ACIE overtakes hyperscalers as a % of NVDA revenues.
Honestly, probably a bad outcome for $NVDA — because the hyperscalers have secured so much of the LPS supply, that if ACIE is a larger percent of revenue in 2028, it probably means the hyperscalers deployed ASICs at a faster rate than is currently in consensus numbers.
Depending on how you model the two-quarter lumpiness, Nvidia's $NVDA ACIE can conservatively overtake hyperscalers in 5-6 quarters at a 14% QoQ growth rate versus 10% QoQ growth rate for hyperscalers, or as soon as 2 quarters if the Q2 pace continues.
io-fund.com/ai-stocks/nvidia…
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I’ve been hearing the analogy between $NVDA and $AAPL — the argument effectively is that Apple reshaped the supply chain in its own image and this served as a sustainable competitive advantage. And that $NVDA is currently doing the same. I think it’s an interesting concept.
However, the core of Apple’s moat is/was that switching costs are high for the users. iOS, Photos, App Store, iMessages, Settings, etc. The lock in is at the software layer, not the device layer. The supply chain is additive, but it isn’t the core of the moat.
Right now the largest consumers of compute are frontier labs and hyperscalers, who all have the resources to develop custom ASICs and build towards a future of heterogeneous compute.
$NVDA’s “extreme co-design” is effectively an argument that “we will persistently outrun everyone.” Higher fungibility and financiability are also nice to have — but neither of these provide the same degree of ecosystem lock-in as CUDA or iOS. Especially not in a world where your primary “users” are willing to throw inordinate amounts of capital and resources at eroding your economics. And particularly not in a world where the “shape” of future workloads is constantly changing to a degree that advantages experimentation in chip design.
I have a long list of parallels between Apple when they were the center of gravity fueling the industry to NVIDIA having the same role today but just a point on using balance sheet as competitive advantage. Apple did it also but was B2C. This dynamic is interesting when it's B2B2B.
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OpenClaw is the spiritual predecessor to Claude CoWork, Codex, Perplexity Computer, Microsoft Copilot Cowork, GrokBot.
Harnesses are driving a large portion of current token consumption.
No clue why someone would laugh at OpenClaw.
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He does not miss.
Aggregate stats often result in misleading conclusions. Here’s a good example from @a16z (a16z.news/p/charts-of-the-we…) that implies Uber’s prices in the US are up significantly more than Lyft.
At Uber, we measure this particular metric every single week. But to get to the true signal, we always control for mix effects from trip type and geography. We measure price quotes on a standard product (in this case UberX vs. Lyft Standard) on identical trips (same origin/destination/time of day combinations), and we call this metric NPI (normalized price index). Our philosophy consistently has been to price as affordably and as competitively as possible, with the NPI near 1.0 at all times. On an apples to apples basis, that story remains remarkably consistent in the US.
Even though the overall assessment is directionally accurate, in not controlling for mix effects, A16Z/Gridwise come to an inaccurate conclusion. In fact, it shows the success of our deliberate strategy to both innovate with new products and expand our footprint into sparser markets. As a result, (1) Uber skews more toward higher-priced premium products, as consumers are increasingly opting into our newer premium products, and (2) Uber trips skew longer, and the mix of trips >15km has increased meaningfully driven by the faster growth in suburban and sparser markets.
In other words, we are serving consumers with better products, and we are serving more consumers than ever before in newer markets that have been significantly underpenetrated for the ridehailing category.
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The 2026 JP Morgan IT call will live in infamy.
While software stocks were down 5% every day, there was a vacuum of genuine newsflow. Everyone was saying “I don’t see how systems of records are going to be disrupted this quickly” …. but LPs were doubting the PMs, the PMs were doubting the analysts, and the analysts were doubting themselves.
The JPM IT guys who said “man, we aren’t sure how we could replace all this software and we don’t have plans to” gave all of the above a legitimate third party to point to and say “see I’m not crazy.”
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DO NOT also account for the fact that $AMZN wasn’t trading at an aggressive valuation coming into the year and should probably grow in-line with the earnings roll-forward as well.
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