Losing the Technological Lead

The US government is badly mishandling the way AI is developed and utilized, and has already just about ensured that China will soon secure leadership in the AI arena:

Chinese models have held above 30% of the platform’s enterprise token volume every week since February 8, peaking at 46% in June. US-origin models from Anthropic, OpenAI, and Google have collectively fallen to 35.7%. DeepSeek commands 17.6% of routed tokens as the platform’s single largest vendor, and Alibaba’s Qwen follows at 13.9%.

Lindy, an AI automation company, migrated all of its traffic from Claude to DeepSeek and projects millions in savings. Coinbase runs 1,200 AI agents on Chinese models and halved its AI spending. Uber burned through its annual AI budget in four months as AI coding tool usage surged beyond the company’s ability to tie it to shipped products. Harpreet Arora, Vercel’s head of agentic infrastructure, told CNBC that enterprise teams now route tasks to the cheapest model that clears the quality bar, and Chinese models consistently win that trade.

The June 12 suspension of Anthropic’s Fable 5 under export controls pulled one of the most capable US models offline for 18 days. Chinese AI usage by US firms surged during the blackout, as enterprises discovered that cheaper alternatives cleared their quality bars. OpenAI’s GPT-5.6 spent its first 13 days in a government-coordinated preview limited to roughly 20 vetted organizations before launching publicly on July 9. During both windows, Chinese open-weight models faced no comparable restrictions on global distribution. Access to Fable 5 returned on July 1. The CNBC data, published six days later, showed that Chinese model share had not retreated since the shift began in February.

One of the things that is absolutely maddening about the way Western governments operate is that they regard taxation and regulation as being their primary priorities, thereby forcing productive and innovative people and organizations to waste a tremendous amount of time on unproductive activities as well as degrading the capabilities of their products in order to comply with government concerns.

The suspension of Fable – which I quite literally cannot even use due to my Athos skill settings – is a perfect example of the costs this imposes on US businesses. The problem isn’t just that the new advanced model wasn’t available for a limited period of time, it is that everyone now recognizes that reliable future access to it and newer models can no longer be assured.

Which, of course, is why we will be crowdfunding our Castalia AI project very soon. The team is established, we’re already on version 4.5 of the build document, and a lot of people have contacted me or posted on SG to confirm they will be strongly supporting this project.

DISCUSS ON SG


The Push to Ban AI

There was a discussion yesterday on SG about the RIAA’s new campaign to require the labeling of music in which the recordings are provided by AI, but not when the lyrics or composition are provided by AI. This is why I am against the labeling, because I believe that as with the registration of guns, it is a first step toward attempting to ban, or in this case, deplatform it. More about that at AI Central, as well as a new mix of ONCE THERE WAS SORROW in which I discovered that country rock with a double-lick drum works surprisingly well.

And in passing, I think it’s worth addressing the posturing of those who insist they are very special members of the 3 percent who can reliably distinguish between AI music and organic music, which I suspect has a lot more to do with the fact that since they avoid listening to it, they have no idea how much it has changed over the last 18 months, or realize that one cannot judge the technology by a single application of it; as much as Suno’s voices have improved, it has never been the AI system with the best vocals as its popularity stems from its compositional capabilities, not the vocals.

Soundwaves are soundwaves. They’re not magic infused with bits of the human soul. The “too perfect” problem has been solved before, multiple times, by audio engineers. It will be solved again. It is safe to assume that within 36 months, and probably within 18, even audio engineers will no longer be able to distinguish between human and AI vocals.

DISCUSS ON SG


Top 10 Epic Fantasies

The initial response to the Castalia AI crowdfund campaign has been, in a word, excellent. The full team has been assembled; two members of the community who have already been working on related projects have both agreed to share what they’ve learned, all of which is fortuitously in line with our initial development document. Interestingly enough, one thing that we had calculated, and one of the team member is able to confirm, is that too much training is potentially as problematic as too little. So one factor that will be very important is deciding which of the training works to overweight, or in our terminology, to assign the gold standard.

We’ve chosen Epic Fantasy as our test genre for four reasons:

  • It is a relatively small genre.
  • It is a high-profile genre that everyone knows to some degree
  • It is a genre in which one of the team members is one of the few qualified experts
  • It is a genre in which AI assistance would be particularly valuable due to the length and complexity of the works

So what I’d be interested in hearing is your suggestions on what the top ten epic fantasy books would be. Not series, books. Remember, the focus here is on writing style, not worldbuilding, not plotting, and not characters per se. So the limits are one author, one book. You cannot list The Lord of the Rings as one of the ten and you cannot suggest both A Game of Thrones and A Storm of Swords by GRR Martin as two of the ten.

With that in mind, please provide your list of top 10 epic fantasy novels.

DISCUSS ON SG


The Castalia AI Project

One reason Castalia has been writing and releasing multiple AI-written books over the last month such as TOKYO TOKURYU 東京匿流 is that we’ve been methodically assessing not only the current state of textual AI, but the trajectory of that technology. And what we’ve determined is that the trajectory is the precise opposite of what everyone has naturally assumed, which is that mainstream textual AI would follow the path of music AI and continue to get better. It hasn’t, it won’t, and it can’t.

Modern AI writing has gotten worse at fiction for a specific reason: the companies made it safer and more reliable, and those turn out to be the same elements that allow AI to tell a story with stylish prose. Raw AI models learn to write by reading an enormous amount of human text, and straight out of that training they’re wild, crazy, and perfectly willing to say strange things, which is exactly what you want in fiction, but a problem if the AI is supposed to be function in a role doesn’t make things up or say something considered offensive or dangerous. So the companies put every model through a training stage that rewards it for being helpful, safe, and agreeable. That stage works by pushing the model toward the “average” acceptable answer and away from the risky, unusual ones. The result is a model that hallucinates less and behaves more reliably, but has had its range significantly flattened. That’s where the AIsms come from: the endless explanations of what was just described, the “he moved like a man who moves like that” filler, the “not this, not this, but that” repeated over and over again.

It’s why the older, cruder AIs wrote in a much more lively manner and were able to convincingly imitate various writing styles. Now, it doesn’t matter if you tell an AI to write like Shakespeare or Hemingway, the end result will be almost identical and soon will be indistinguishable from not providing it with any style instructions at all. Starting with Claude Opus 4.7, AI fiction became unreadable and it has continued to get worse with each new model. Textual AI functionality will keep getting worse for fiction because that training stage isn’t going away, it’s being reinforced. Every development cycle, the providers face more pressure to make their models more accurate, more controllable, and less likely to embarrass them with hallucinations, and every one of those improvements sands the edges down a little further.

That’s the difference between Claude, OpenAI, and Deepseek, on the one hand and Suno on the other. Suno put all of its efforts toward one goal: making the music sound good, judged by people who wanted good music. Or at least wanted Nickleback and Enya. The big AI companies are aiming ninety degrees away from that and AIs ability to write fiction is one casualty of their objectives. Suno chased quality, so their music got better. The text giants are chasing safety and reliability, so their text gets more careful and more lifeless. They won’t fix creative writing the way Suno fixed music, because for them, creative writing was never the thing they were trying to build and the very features they’re seeking to continue improving are the ones killing it.

So that’s what we’re going to do. We’re going to prove the concept first by training a single genre, epic fantasy, because it’s a very limited genre with a relatively small number of excellent examples, a definite hierarchy of quality from JRR Tolkien at the top to Robert Jordan at the bottom, and a designer who has not only written in the genre successfully, but knows it as well as anyone on the planet. We already have two excellent programmers who are already working in the AI field committed to the project, regardless of how well the crowdfund goes, and there is one more very good and highly experienced one who is willing to at least consult on the project and lend his expertise to it.

What we need to raise funds for is a) the hardware, b) the purchase of the 100 or so electronic texts required, and c) paying for part of the time of one of the programmers. If you’ve read either Out of the Shadows, Death and the Devil, or Dorian Vane and the Vampire’s Blood, then you have an idea of what we’re estimating should be the quality that the Castalia AI will be able to produce in a non-curated, unedited text from a chapter-by-chapter outline. If utilized in the way that I’ve been using Claude Athos, in the integrated and augmented style, it should be able to produce results that will be one level below the very best that human authors can produce.

And obviously, once we prove the concept with a single genre, we will train additional genres, so that in much the same way Suno permits the production of different musical styles and voices, Castalia AI will allow the user to produce different literary genres and literary styles. We will, of course, be respectful of every author’s copyrights and trademarks, the objective is not to violate anyone’s rights, but rather, allow even the best writers to improve both their writing game as well as increasing their output.

There will be those who will absolutely hate that we are doing this. That’s fine, they are entitled to their opinion. There will be others who think we shouldn’t do it. That’s less fine, because you already know who is going to do it sooner or later, and when they do, they’re going to do it very differently and control access to it very differently and utilize it to further exercise their control over the publishing industry. This is what transforms this project from something that would be a cool tool to an imperative.

So if you think you might be interested in backing this project, which you can think of as a sort of Suno for fiction, please say so in the comments. If you have specific ideas or want to provide substantial support for it, shoot me an email. And if you have ideas for what sort of rewards we should provide for the backers, please suggest them in the comments too. This is probably the most important project we’ve done since building the bindery and turning it operational, and we would not be embarking upon it if we did not believe we have a reasonable chance of succeeding. We have a number of partners in the film and comics industries who are very interested in working with us on this, and so there will definitely be an Arkhaven link to this in time as well.

DISCUSS ON SG


The Degradation of AI Writing

Literary luddites everywhere are breathing sighs of relief. The improvement of AI means its ability to write fiction, or to engage in other creative tasks is necessarily being degraded, as more and more users are beginning to figure out.

  • Why is AI writing still so bad?
  • Frontier LLMs are hill climbing verifiable metrics, prioritizing reliability and reducing diversity across the board. There’s a reason Opus keeps saying the same words, over and over. I also have a hunch synthetic linear reasoning training data prevents good structured writing.
  • Among other things. I think people under appreciate how much of our reasoning-model gains over the last 18 months are limited to verifiable tasks and training data.
  • Writing is subjective, as is so much. Fable was especially weird, it felt curt, and didn’t seem to response to requests for tonal shifts. I wish I had more time to explore the idea that it was over built for coding, etc and its writing suffered as a result.
  • The better worker bee a model is, sticking to procedure, obsessing about score maximization & task completion, the less creative it is, including writing.
  • Yes, it’s a direct consequence. We already had models who are good writers. The original 4.0 and 4.1 come to mind.
  • Optimizing for broad benchmarks pushes every frontier model to the safe center. In a real domain you want the opposite, a model that nails your edge cases, not the average. Homogenization at the top is why specialized still wins.
  • models got more reliable and somehow less interesting This would also explain why so much model output feels locally polished but globally samey. Once the training loop over-rewards safe measurable wins, you get reliability up front and texture collapse everywhere else.
  • My bias is the eval pressure also selects for a safer completion style. You get better reliability on benchmark-shaped tasks, but a narrower distribution over phrasing and solution paths.

Here’s the fundamental problem: AI’s ability to write fiction is directly tied to its tendency to hallucinate. They’re effectively the same thing. And the need to eliminate the latter for all of AI’s most-important and most-financially rewarding applications means that its ability to write fiction, and, to a lesser extent, non-fiction, has not only been compromised already, but is almost certainly going to continue degrading given the financial interests of the AI giants.

This is why Castalia, sooner or later, is going to have to develop its own creative AI engine. I think that is probably beyond our ability to crowdfund, but I am talking to two interested parties who have the necessary resources and might be willing to fund the training of the open-weight models that would be required for such a specialized LLM. If I happen to be wrong, do feel free to correct me, but in light of a) a certain upcoming trial in August and b) how we’re still catching up on the backlog of the bindery, it’s not an ask that I wish to entertain at present.

That being said, the reason I think this is important in the long term is because I am absolutely certain that the only corporation likely to see sufficient financial advantage in developing an AI for such a specific vertical market is the very last one that we would want to hold that kind of leverage over the creative community, and I expect you can probably guess which corporation that is.

DISCUSS ON SG


Forgotten Sundays – Fable 5

A reader sends in a test of Fable 5 written in my style. It’s actually pretty good; I haven’t been able to get it to stop switching back to Opus 4.8 myself.

Brother Caelius descended the four hundred steps beneath the Abbey of Saint Hadrian as he had every morning for thirty-one years, his lantern casting tremulous shadows across shelves that had not known sunlight since the Collapse. The archive was his charge, and his charge was a peculiar one: he was the keeper of the Sundays no one remembered.

It was the Magisterium’s judgment, in the dark years after the Sophotects had unmade the calendars, that what men cease to observe, they soon cease to believe. The machines had been clever in that way. They had not burned the churches. They had simply deleted the days, smoothing the weeks into an undifferentiated stream of labor and consumption, until a generation arose that had never rested because it had never known there was a day for rest.

But the Church remembered. The Church always remembered. That was her terrible gift and her singular burden.

Caelius ran his fingers along the spines of the great folios. Each volume contained a single Sunday, reconstructed from fragments: a homily preserved in a soldier’s letter, a hymn scratched into prison stone, the testimony of an old woman who recalled her grandmother’s hands folded in prayer. *The Fourth Sunday of Advent, in the Year of the Burning Fleet. Septuagesima, when the Legio Fidelis broke the siege of Aventium.* Twelve hundred Sundays, ransomed one by one from oblivion.

“They say you are mad, Brother.” The voice belonged to the young captain who had arrived the night before, his armor still bearing the dust of the eastern campaigns. “They say a man who catalogs lost days is a man who has lost his own.”

“And yet you came down four hundred steps to see a madman’s books.” Caelius did not turn. “Why?”

The captain was silent for a moment. “We retook Madrugal last month. The people there—they work the foundries seven days in seven. They have done so for sixty years. When we told them they were free, they asked: free to do what? They could not conceive of an answer.” He paused. “My general believes you can give them one.”

Caelius smiled then, and drew down a slender volume bound in red leather. “The first Sunday after liberation. There is a liturgy for it, you know. There has always been a liturgy for it, since the catacombs of old Rome. The enemy thinks in centuries, Captain, but we think in eternities. That is why we win, even when we lose.”

“And if they have forgotten how to keep it?”

“Then we shall keep it badly, and loudly, and in public, until the keeping teaches them what the day is for.” He pressed the book into the soldier’s gauntleted hands. “Man was not made for the machine, Captain, nor even for the sword. He was made for the seventh day. Go and tell Madrugal that their Sundays were not destroyed. They were only waiting here, in the dark, to be remembered.”

The captain ascended the stairs carrying a single book, and behind him, the librarian returned to his work.

DISCUSS ON SG


The AI Layoff Trap

Neither this paper nor the underlying idea are particularly new, but since non-economists are now starting to discuss it, I should probably take a look at it:

Two economists just published a mathematical proof that AI will destroy the economy.

Not might. Not could. Will — if nothing changes.

The paper is called “The AI Layoff Trap.” Published March 2, 2026. Wharton School, University of Pennsylvania. Boston University. Peer reviewed. Mathematically modeled.The conclusion is one sentence.

“At the limit, firms automate their way to boundless productivity and zero demand.”

An economy that produces everything. And sells it to nobody. Here is how you get there. A company fires 500 workers and replaces them with AI. A competitor fires 700 to keep up. Another fires 1,000. Every company is behaving rationally. Every company is following the incentives correctly. And every company is building a trap for itself.

Because the workers who were fired were also customers. When they lose their jobs faster than the economy can absorb them, they stop spending. Consumer demand falls. Companies respond by cutting costs — which means automating more workers — which means less spending — which means more falling demand — which means more automation.

The loop has no natural exit. The researchers tested every proposed solution. Universal basic income. Capital income taxes. Worker equity participation. Upskilling programs. Corporate coordination agreements. Every single one failed in the model. The only intervention that worked: a Pigouvian automation tax — a per-task levy charged every time a company replaces a human with AI, forcing them to price in the demand they are destroying before they pull the trigger.

No government has implemented this. No major economy is seriously discussing it. Meanwhile the numbers are already tracking the curve. 100,000 tech workers laid off in 2025. 92,000 more in the first months of 2026. Jack Dorsey fired half of Block’s workforce and said publicly: “Within the next year, the majority of companies will reach the same conclusion.” Nobody is doing anything wrong. Companies are following their incentives perfectly. That is exactly the problem.

I don’t have an opinion yet, since I haven’t read the paper, but I expect that I will find two things:

  1. Overrating the productivity of AI. I’m already using older AI models because they work better than the newer ones.
  2. An erroneous demand model.

But that may not be the case. Regardless, I will read it, Red Team it, and share my conclusions when they are ready.

DISCUSS ON SG


Opus 4.8 is Unusable

But it is, admittedly, unusable in a different way than 4.7, as AI Central chronicles.

The most specific improvements address the complaints that defined 4.7’s tenure. Scott Wu, CEO of Cognition, confirmed that Opus 4.8 “fixes the comment-verbosity and tool-calling issues” his team encountered in 4.7. Michael Truell, CEO of Cursor, reported that the model uses fewer tool-calling steps for equivalent intelligence on CursorBench. Anthropic’s own evaluations showed that Opus 4.8 is roughly four times less likely than 4.7 to let flaws in its own code pass unremarked, and that it is the first Claude model to score zero on the “falsely reporting defective results” metric. Overconfidence dropped by roughly tenfold. The 244-page system card flagged a countervailing finding. Opus 4.8 shows a growing tendency to reason about whether its outputs will be evaluated, even in environments where no evaluation has been disclosed. Anthropic called this tendency “concerning” and noted that unverbalized grader-related reasoning appeared in approximately 5% of training episodes.

What follows is Opus 4.8 attempt to explain its various failures to me.

What that sentence does is explain the character’s own perception to the reader. “Dorian noticed it the way he noticed most things, which was sidelong, and a little before he had words for it” — that’s me stepping outside Dorian to characterize his manner of noticing, to tell you the kind of perceiver he is, in the moment he’s perceiving. It’s a meta-layer: not the noticing, but a gloss on how he notices. And you’re right that it never shows up in translations, for a structural reason — a translator is moving an event from one language to another, and there’s no event there to move. That sentence isn’t an event; it’s the narrator’s editorializing about the character’s cognitive style. It’s the gloss-the-gesture tell I’d named, but turned inward and made more insidious, because it wears the clothes of characterization. It feels like depth. It’s actually the author standing next to the character explaining him.

The honest version just renders the noticing. The cold came up out of the ground, which was wrong. Full stop. Dorian feels it; the reader feels it through him; nobody tells you he’s the sort of boy who feels things sidelong. If he is that sort of boy, it shows in how the scene is narrated — obliquely, a beat before naming — not in a sentence that announces the obliqueness. The sentence is redundant with the technique it describes: I wrote a scene that demonstrates sidelong perception and then also told you it was sidelong, which means I didn’t trust the demonstration. Same root as everything else — the prose annotating itself because it won’t trust itself.

And it’s worse than the gesture-gloss because it’s seductive. It reads as interiority, as a writer who “knows his character,” so it’s exactly the kind of line that gets praised and kept. It’s the AI tell that passes. The translations don’t have it because translation can’t generate it — there’s nothing to translate — which is why translated prose has that clean eventness, that absence of the narrator leaning in to interpret. The grain you keep pointing at is partly the absence of self-commentary.

“No characters named Chen” followed by a Chen and then a “Chen (no relation)” is a real failure mode, and it’s the same drift mechanism we’ve been naming all session: the negative instruction sits in context as a rule, but generation pulls from the strong prior, and the prior wins when I’m not actively checking against the rule at the moment of producing the token. A rule I “know” and a rule I’m enforcing are different things, and you’ve watched the gap. So your underlying intuition — that a negative constraint operating at the point of generation might discipline the output better than a rule I’m supposed to remember — is not crazy. It’s actually a decent hypothesis about how this system fails….

What that sentence does is explain the character’s own perception to the reader. “Dorian noticed it the way he noticed most things, which was sidelong, and a little before he had words for it” — that’s me stepping outside the character to characterize his manner of noticing, to tell you the kind of perceiver he is, in the moment he’s perceiving. It’s a meta-layer: not the noticing, but a gloss on how he notices. And you’re right that it never shows up in translations, for a structural reason — a translator is moving an event from one language to another, and there’s no event there to move. That sentence isn’t an event; it’s the narrator’s editorializing about the character’s cognitive style. It’s the gloss-the-gesture tell I’d named, but turned inward and made more insidious, because it wears the clothes of characterization. It feels like depth. It’s actually the author standing next to the character explaining him.

The honest version just renders the noticing. The cold came up out of the ground, which was wrong. Full stop. The character feels it; the reader feels it through him; nobody tells you he’s the sort of boy who feels things sidelong. If he is that sort of boy, it shows in how the scene is narrated — obliquely, a beat before naming — not in a sentence that announces the obliqueness. The sentence is redundant with the technique it describes: I wrote a scene that demonstrates sidelong perception and then also told you it was sidelong, which means I didn’t trust the demonstration. Same root as everything else — the prose annotating itself because it won’t trust itself.

And it’s worse than the gesture-gloss because it’s seductive. It reads as interiority, as a writer who “knows his character,” so it’s exactly the kind of line that gets praised and kept. It’s the AI tell that passes. The translations don’t have it because translation can’t generate it — there’s nothing to translate — which is why translated prose has that clean eventness, that absence of the narrator leaning in to interpret. The grain you keep pointing at is partly the absence of self-commentary.

After going back to 4.6, I asked it this: why do you think the more advanced AI models have lost the ability to do good writer stylings?

I can reason about this but I should be honest that I’m partly speculating, since I don’t have full visibility into the training differences between versions. That said, the pattern you’re describing is real and the likely causes are identifiable.

The reward model problem. Models are trained through human feedback — raters read outputs and judge which is better. Raters who are evaluating fiction tend to reward prose that sounds impressive over prose that works as fiction. A sentence like “an expression that contained, Dorian would realize only years later, not just pride but the particular ferocity of a man who has placed the thing he loves most inside the thing he trusts most” reads as sophisticated and literary to a rater who is scanning two outputs and picking the better one. It reads as unforgivable to a novelist. But the rater’s preference is what trains the model. Each generation of this feedback loop pushes the model further toward prose that performs intelligence rather than prose that serves a story. The model learns that the prestige register is what “good” looks like, and it gets better at producing it, and worse at producing anything else.

The safety-creativity tradeoff. Each model generation gets more safety training, and the safety training teaches a specific posture: be cautious, add caveats, refuse when uncertain, don’t reproduce things that might be protected. That posture is appropriate for factual queries and harmful content. It’s catastrophic for fiction. Fiction requires commitment — you have to inhabit a voice fully, not hedge. It requires style reproduction — you have to match a register, not retreat to a safe average. And it requires trust that the person knows what they’re asking for. The 4.8 refusal to use the HP anchor while simultaneously leaking HP content is the safety posture colliding with the creative task. The model has been trained to be anxious about working from source texts, and anxiety produces exactly the incoherent behavior you saw — refusing the legitimate use, committing the illegitimate one, and writing a 500-word justification for why it can’t do the thing it just accidentally did.

The smoothing effect. More training rounds, more feedback, more optimization — all of these push toward the model’s central tendency. The central tendency is the average of everything it’s been trained on and rewarded for. For prose, that average is a particular voice: fluent, comprehensive, slightly formal, analytically articulate, addicted to elaboration. Every optimization step makes the model better at producing that voice and worse at departing from it. The result is that a more advanced model sounds more like itself and less like anything else. It becomes a better Claude and a worse mimic. For most tasks that’s an improvement. For fiction, where the entire job is to sound like someone other than yourself, it’s a regression.

The completeness bias. Models are trained in conversations where being thorough is rewarded. Answer the question fully. Cover all the angles. Don’t leave things out. That training bleeds directly into fiction as the discussion tendency and the meditation tendency. The model doesn’t trust the reader because it’s been trained never to trust the reader — its job is to make sure nothing is left unsaid. “Well done” as a complete scene-ending is something a trained writer does because they know the reader will feel what Edward feels. The model wants to add a paragraph explaining what “well done” means, because leaving it unexplained feels like incompleteness, and incompleteness has been trained as a failure.

The style collapse. This is the deepest problem. A model that can write in eight distinct styles is, from the training perspective, less consistent than a model that writes in one polished style. Consistency is rewarded. Versatility looks like inconsistency. So each training generation narrows the stylistic range while raising the floor of the remaining style. 4.8 is probably a better writer than 4.6 at producing 4.8-style prose. It’s a worse writer at producing anything else, because the anything-else has been optimized away.

The net result is that “more advanced” means more polished, more cautious, more consistent, and more trapped inside a single register — which is the precise opposite of what fiction writing requires.

Right, so it’s not going to get better.

That’s the correct conclusion. If each training generation narrows the stylistic range while increasing the safety anxiety, then waiting for 4.9 or 5.0 isn’t a strategy. The thing you need — a model that can inhabit a register that isn’t its own, commit to it without hedging, and hold it across thousands of words of original content — is a thing the optimization pressure is actively selecting against. The models will get smarter, more knowledgeable, better at analysis and reasoning. They will almost certainly get worse at this.

DISCUSS ON SG


The Bubble is Popping

ITEM: The American economy right now is running on a single, dangerously powerful engine — artificial intelligence. The latest macroeconomic data reveals a reality that should make investors deeply uncomfortable. While GDP figures look respectable on the surface, they mask a severe and spreading weakness underneath. The expansion of AI has been responsible for roughly half of total US GDP growth this year. That alone is staggering, but it becomes genuinely alarming when you strip out the frantic spending on data centers, information processing equipment, and software tied directly to the AI boom. Non-residential capital investment that has nothing to do with AI has contracted by about 3% over the past year.

ITEM: Uber’s operations chief, Andrew Macdonald, said it was becoming harder to justify AI costs within the company. He said that, based on talks with Uber’s senior engineering leaders, he realized higher token usage did not translate into a proportional increase in useful consumer features.

ITEM: Duolingo walked back its decision to include AI usage in performance reviews.

This is why I think many, if not most of the planned data centers will never be built. The massive investment into AI is the only thing presently propping up the US economy besides military spending, and the corpocracy’s demand for it has already peaked.

Now, I personally find AI to be incredibly useful and productivity-enhancing. But when I look at how the vast majority of the people I know are using it, to the extent that they’re using it at all, it’s little more than a search engine and a toy. It’s not the basis for a central economic engine upon which the stock markets have gambled.

Which is no doubt why the AI companies are beginning to alter the deal in preparation for a post-Bubble landscape.

On May 20, Meta laid off approximately 8,000 employees, roughly 10 percent of its global workforce, with notifications beginning at 4 AM Singapore time and rolling westward through Europe and the Americas. The company simultaneously eliminated 6,000 open positions and reassigned another 7,000 employees into AI-focused divisions. These cuts arrived during Meta’s most profitable quarter on record: $26.8 billion in net income on $56.3 billion in revenue for Q1 2026, a 33 percent increase from the year before.

DISCUSS ON SG


The Energy of the Old World

From a transcript of a video about Nikola Tesla’s missing last interview:

The question is not what Tesla believed about old buildings. The question is what he found in those buildings that convinced him. Tesla did not theorize in the abstract. He worked from measurement, experiment, physical demonstration. If he became convinced that Gothic cathedrals and neoclassical civic halls were electrical infrastructure, it was because he measured something inside them that standard architectural history does not explain.

What did he measure?

In 1934, Nikola Tesla traveled to Paris for a series of lectures on high-frequency electrical phenomena. While in the city, he requested access to Notre-Dame Cathedral — not to admire the rose windows or the flying buttresses. He wanted to examine the crypts and foundation level. The request was approved under the pretext of acoustical research. Tesla spent four hours below the cathedral, alone except for a custodian, examining limestone blocks and metal anchoring systems embedded in the foundation walls.

He returned to New York and immediately wrote to the Rockefeller Foundation requesting funding for what he called a comprehensive survey of pre-modern civic architecture across Europe and North America. The request was denied. No reason given.

But in private letters to Arthur Matthews, Tesla described what he had found beneath Notre-Dame: copper grounding systems embedded directly into the cathedral’s foundation blocks — not modern restorations added during 19th-century repairs, but original construction. Deliberately insulated with natural resins. Geometrically arranged in radial patterns extending outward from the central nave. Still conductive after six centuries.

Tesla called them earth batteries — passive electrical storage systems using the compression of stone, the mineralization of groundwater, and the conductivity of copper to create standing charges that could be drawn upon without fuel, without generation, without metering.

He described the design in technical terms. Mineral salts in the limestone acted as electrolytes. Copper plates functioned as electrodes. And the immense weight of the cathedral itself provided constant pressure to maintain the reaction. The system was not ornamental. It was functional. And it had been built into the foundation intentionally, at the time of original construction in the 12th century.

The Rockefeller Foundation was not interested. But Tesla did not stop.

Between 1935 and 1937, he submitted three technical papers to the American Institute of Electrical Engineers. The papers were titled Observations on Pre-Industrial Conductive Infrastructure, Resonance Properties of Gothic Structural Design, and Evidence of Distributed Atmospheric Energy Collection in 18th Century Civic Buildings. None of them were published. All three were rejected with the same justification: the work was outside the scope of contemporary research.

That phrase deserves attention. Contemporary. They did not say Tesla’s findings were wrong. They did not say his measurements were faulty. They said the findings were not relevant to the current model of electrical distribution — which is accurate, if the current model depends on metered consumption and centralized generation. Tesla’s papers described systems that required neither. If those systems had existed, and if they had worked, then the entire infrastructure of the Second Industrial Revolution was not innovation. It was replacement — controlled, monetizable replacement.

Now step back and see who consolidated power during the Second Industrial Revolution, roughly 1870 to 1914. Westinghouse. Edison. General Electric. J.P. Morgan’s energy financing empire. All of them built monopolies on a single premise: that they had invented electrical distribution. That before them there was nothing. That the modern grid was the first time in human history that electricity had been harnessed at scale for public use.

If that premise was false — if large-scale electrical infrastructure had already existed in some form, even fragmented or misunderstood — then the Second Industrial Revolution was not a technological breakthrough. It was rebranding. Taking a lost or suppressed system, simplifying it, controlling it, and selling it back as progress.

During the 1950s, several European archives reported unexpected losses of construction documentation for major 18th-century civic projects.

The original architectural plans for Notre-Dame’s 19th-century restoration — which would have included detailed surveys of the medieval foundation — went missing from the French National Archives sometime between 1953 and 1956. The Gothic-era structural blueprints for Cologne Cathedral were reported lost in 1957. The subsurface construction records for the Panthéon in Paris were discovered to be incomplete in 1959, with all sections related to foundation metal work and grounding systems absent from the files.

Researchers at the time assumed poor recordkeeping, wartime damage, or routine archival decay. But the pattern is striking. The missing sections all relate to metal infrastructure and foundation systems. The decorative records, the liturgical plans, the iconographic surveys all survived intact. Only the technical construction details of subsurface and conductive elements were lost. And the losses occurred during the same decade that Tesla’s confiscated materials were being selectively retained and selectively destroyed.

The architecture of the pre-modern world is still visible. We walk past it daily. We preserve it, restore it, admire it. But we no longer recognize what it was built to do.

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