via LinkedIn

Commentators babbling about Elon's "Amazing UJSD 950M infrastructure deal", don't seem to have read the actual deal.

Here's the summary:

SpaceX, having failed to strike gold, is now forced to rent out the shovels it bought at tremendous markup during the early stages of the gold rush to it's competitors, some of whom (Anthropic) actually struck gold.

This is an excellent deal for Google and a show of how badly SpaceX is doing overall:

Google is a SpaceX competitor and also an investor standing ready to gain double to triple digit billions from their IPO.

Like Google, SpaceX is pursuing vertical integration to ensure value is captured along the chain - Services, LLM, compute, but unlike Google, they don’t have TPU, meaning they have to buy all Nvidia for compute.

That’s a huge issue for SpaceX because Nvdia’s profit margins (75+%) are the primary (!) thing that makes AI expensive. GPU DCs are costly to build and most of the hardware depreciates over 3-5 years. To start making a profit (margins about 20%, not exactly great for this class of companies), your GPU utilization has to be high, 65-70%:

❓Why is this a great deal for Google?

We are several years into the bubble and the expectations are sky high. Whoever is at the AI CapEx poker table is all in and players have started tendering equity or issuing bonds to stay in the game^1.

There’s two scenarios that companies are worried about:

1. Demand rises massively and they can’t capture the wins because lead times are long.

2. Demand crashes and they have to write off massive infrastructure investments. TPU or not, the supply crunch has made investments in future compute very expensive.

This deal acts as a hedge for Google:

If demand skyrockets, prices for Nvidia compute will too and Google just secured access to a lot of top end compute at a rate that will be very reasonable under demand pressure.

If the bubble bursts, demand craters or stays flat, SpaceX will have to write off the Capex because google has the contractual rights to just cancel the deal.

Tech companies fear missing out on growth more than writing down investments, because the risk for the second is covered by investors

SpaceX has the same, but unlike Google, they have no credible claims on any gold to shovel with the compute.

❗The upside here goes to Google, majority of the risk to SpaceX. For SpaceX, selling raw compute to competitors is the lowest margin play:

Colossus was built to train Grok and serve other xAI plays on their on their compute. As a rushed fossil powered DC with a high failure rate on GPUs it’s not very competitive on the overall compute market.

The lopsided deal shows these plays have failed, we know from industry reporting that before the Anthropic deal, Collosus I only had about 11% of utilization^2, depreciating hundreds of millions, if not billions of dollars a month on top of training expenses in the hundreds of millions for Grok^3 which has failed to get any traction.

The PR effect of “SpaceX gets (up to) 900M from Google a month (cancellable on short notice)” is cherry on top juicing IPO narrative.

The rules are simple:

If you struck gold and renting shovels is faster then buying or building them, rent to extract as much gold as possible before your competitors (Anthropic)

If there's a chance you may strike gold, renting shovel options is a lower risk play, since shovels will become more expensive when gold is found (Google)

If you have a stake in a shovel vendor about to IPO, loudly proclaim you're buying shovel options, trusting the media to mistake options for commitment (Everyone in AI)

^1: [https://www.msn.com/en-us/money/top-stocks/alphabet-stock-drops-as-80b-ai-fundraising-plan-shakes-wall-street/ar-AA24EyBl]

^2: https://wccftech.com/xai-using-just-11-percent-gpus-while-meta-google-squeeze-out-much-more/

^3: Grok itself wasn't cheap. 400M for the final training run for 3.5, which nobody used but XAI on X (a pure loss leader since X ad revenue has cratered) because Claude had a better model within 2 weeks of release, and 500M for Grok 4

This is an excellent deal for Google and a show of how badly SpaceX is doing overall: Google is a SpaceX competitor and also an investor standing ready to gain double to triple digit billions from… | Georg Zoeller | 13 comments

Further Reading

• How a SpaceX IPO could deliver Google one of the most lucrative startup wins ever
• Total cost of ownership of a one-gigawatt AI data center

My GreenIO / Singapore API days "Can we get real now?" presentation slides, provided context and commentary free.

In the presentation I'm making the case that AI is a massively overhyped California goldrush, that the economic impact currently seen stems primarily from the reconfiguration of intellectual property and that the technology narratives serve as a massive smokescreen to obscure and prevent action against the value redistribution that goes alongside the centralisation of knowedge and loss of scarcity in the knowledge economy.

Plus plenty of tech skewering and insults.

via LinkedIn

Once you create downward wage pressure with coordinated layoffs you create a chain reaction, at least in an environment with no labor power (unions) to counterbalance:

After 3 years of sustained layoffs kicked off by Elon and joined by everyone else, TC across the industry is down between 30-50% (ignore the noise about a few AI lab outliers).

Now you got an opportunity to cycle your entire employee base, over time, to the new lower benchmark through successive fire and rehire, the second part usually at a cheaper location in Southeast Asia and Eastern Europe.

As most people in tech layoff groups have figured out by now that recruiters for temp contract firms will start flooding inboxes with job profiles matching active employees at Meta and other companies but lower comp, rank and no equity before these people are even informed of their fate.

It’s just capitalism at this point - if you’re paid 50% more than what desperate people in the streets locked into bay area mortgages are willing to work for, you’re gonna have cross on your back, a very big one if you’re sitting on millions of unvested equity the company gets to claw back and hand to shareholders.

⚠️ See also AI CHRO, a performance art project allowing every HR professional to plan Big Tech Style investor pleasing layoffs for their workforces)

So while this graph in the linked post is functionally not incorrect, it doesn’t support the “calm down” conclusion if you’re an industry worker in a high cost location or somehow expect your career trajectory to be only temporarily inconvenienced.

This pattern, via AI narrative has infected other industries by now. Klarna, the European fintech unicorn, told investors they would replace everyone with AI while relocating the jobs to Poland.

Banks in AU have been caught doing the same thing, telling public and government stories about AI efficiency to cover up cost cutting to juice investor payouts.

We can argue that this all is a terrible idea that hollowed out leading industry and companies by depriving them of institutional knowledge and skill and we would be right …. but that didn’t stop the exact same thing playing out at Boeing. Or Intel - outsourcing and value extraction via stock buyback thay have left these companies in shambles and reliant on protectionism and national security / defense pork.

Guess which industry is aggressively joining exactly the same feeding frenzy right now?

It’s also not clear where the floor is - the bros in charge of the industry will keep digging for it. Absent organized labor there’s no credible force that can arrest this trend as the market is dysfunctional.

Quality issues? Nice thought but one look at what Microsoft is shipping and continues to cut people should disabuse anyone from hope. Monopoly lol.

Sorry, there’s no uplifting punchline here except that the AI emperor has no clothes and that capitalism is doing what it is programmed to do absent regulatory guardrails.

I explained this before: Once you create downward wage pressure with coordinated layoffs you create a chain reaction, at least in an environment with no labor power (unions) to counterbalance: After… | Georg Zoeller

Further Reading

• The West Forgot How to Build. Now It’s Forgetting Code

via LinkedIn

AI is so amazing that you MUST tolerate your former SaaS vendors claiming ownership of your most crucial business data to train models eventually competing with your business.

Amazon shops is so amazing, you MUST tolerate Amazon getting full access to your most critical sales data, using it to launch 20k private brands (Amazon Basics) to disintermediate you and everyone else in the industry from your best margin items.

Facebook pages are so amazing to reach your customers,...

Microsoft OneDrive….

Claude Code…

Zoom….

It’s almost as if there is a pattern.

The GenAI hype is either a brilliant piece of social engineering, making countless business and governments forget the very raw lessons from the outsourcing boom of the last 45 years, chiefly that the country you transfer your knowledge to eventually holds all leverage over your economy and that your former outsourcers will put your out of business…

…Or people and companies are just so short sighted, they can’t see the most obvious outcomes despite staring at them for the last 2 decades.

Why on earth do you think that people with the technology to replace workflows and workers when given enough data, can’t replace companies when handed their training data on a platter.

What do you think a company’s business moat is?
❓Workers? Oh wait, you are laying them off.
❓Context? Oh wait, you’re handing it over to every cheap AI API, at least the part not lost in layoffs.
❓Trust? Oh wait, you’re gambling with it with fast and lose AI rollout
❓Distribution? Whose platform do you think you’re distributing on and who owns the moat?
❓Data? lol

Of course the issue is somewhere else: The market runs on short sighted.

The greatest risk is always the next earnings call and what we’re actually seeing is the final act of shareholders executing the equivalent of a 50% attack on the rest of the economy.

Companies have one choice at the moment:

Say you’re all in on AI and produce AI payouts like big tech, powered by layoffs and insane claims of future efficiency or we will drop your shares like a Chegg(dot)comm and will sue you for value destruction

See also yesterday's paper identifying the same failure mode: Raw capitalism not being able to optimize for cascading failure linked below.

Everyone in the market is locked into a classic incentive trap that cannot be broken unless you're optimising for a long term you can't optimise for unless you can defy your own shareholders, and even then, you can't says Zuck, who has full voting power over Meta.

And so this car is going right over the cliff, with all the workers not thrown out of the moving car before in the back.

Most companies falling for the AI Efficiency Trap seems to be oblivious that what they are doing to their employees is being done to them by their AI supplier, and increasingly any other company in their supply chain that can find any kind of excuse to extract business data.

As a species supposedly able to learn, we really seem hell bent on letting a meatspace construct with a singular “growth objective” run the rather nice civilization we have over the cliff.

AI is so amazing that you MUST tolerate your former SaaS vendors claiming ownership of your most crucial business data to train models eventually competing with your business Amazon shops is so… | Georg Zoeller

Further Reading

• The AI Layoff Trap
• Atlassian Enables Default Data Collection to Train AI
• Exclusive: Meta to start capturing employee mouse movements, keystrokes for AI training data

via Arxiv

The first paper I've found that explores the inherent incentive trap in the AI hype narrative, showing that without external intervention (read: regulation and taxation), AI is likely to cause a cascading failure of the economy system due to destruction of consumer power in the wake of efficiency driven layoffs.

I wish it would also explore the question on whether the economy hasn't already reconfigured away from a consumer economy to a top 1% economy and how that would affect the equation..

In any case, a good read and I highly recommend it

The AI Layoff Trap

The western video gaming industry has had a brutal few years, with record layoffs affecting almost every company and many beloved studios and brands disappearing. At the root lies a once-in-a-lifetime crisis and loss of vision, not a cyclical downturn, which renders a capital intensive industry reliant on investments uninvestable.[^5]

AI, while often cited as a root cause, plays an ancillary role as a competitor and source of uncertainty and disruption, secondary to the structural headwinds and flaws of the industry itself.

This piece is about a point in time, doesn't argue that games, as a medium as old as humankind, are somehow dying, but about the structure and incentive systems forming the modern western game industry within the economic framework of shareholder capitalism.

1. The Growth Is Gone.

In capitalism, growth is the ultimate goal. Investors put money into companies so they deliver growth per dollar, ideally above market return rate, thank you, because anything less is opportunity cost.

The total size of the gaming industry, estimated somewhere in the USD 200-300B range, powered by some 250.000 professionals is often used to appeal to its economic importance, but unfortunately that size is irrelevant when there is no growth.

Games are risky, long term investments - on the top end, AAA, increasingly requiring franchise scale to return their investors profits. And risky investments require appropriate return rates to make sense, which is where the industry problem starts: Above average growth of preceding years is gone and, more critically, all expansion narratives have failed to provide sustainable tailwind:

• Cloud Gaming turned out to be CapEx intensive and competing with AI for GPU, a non-starter at this point
• VR/XR and MetaVerse were first rebranded away from gaming to broader audiences and then shot and buried in Mark Zuckerberg's backyard.
• NFT and something-something-coin games turned out to be mostly money laundering and rug pulls, the graveyard of dead apes and investor dreams littered with gaming related efforts of "bring your Disney lightsaber to Fifa 2030"
• ESports has not panned out as a reliable growth engine.
• Games as a Service / Game platforms, like Fortnite and Roblox, long acting as the primary investor plays for tech-industry like returns are starting to show signs of peaking.
• No credible AI x Gaming narrative even exists, four years into the AI boom. More on that below.

But at least there were narratives ... today, in the words of John Tuld, now, "I hear nothing, the music has stopped".

There is no compelling answer to the question of "Why should I invest my money in games instead of other opportunities" and many answers to "Why shouldn't I", some of which are provided below.

2. Demographic Headwind

Both age and generational habits have turned from tailwind to headwind over the last few years, showing the expected signs of a maturing market, far from the double digit growth rates fuelled by internet growth and the rise of gaming into the mainstream.

Some of it is reflective of increasingly aging societies in high ARPU markets, some of it to generational habit forming:

After decades of "the future is gaming", gaming is now a default and future generations are increasingly diversified in their attention spend, many preferring to watch people play or engaging with highly addictive short form video over the time investments needed to actually play games.

For a while, the cope was "people watch youtube in the background while also playing games", but short form video does not allow split attention, and it's rapidly growing.

According to the UK's ofcom regulator, between 2023 and 2024, adults spent more than 25% more time online, about an hour of "online growth", the majority of which went to short form video platforms and social media. From 2024 to 2025, that slowed to 10 minutes growth. [^1] ... in either case, the primary beneficiaries were big tech and short form video platforms, not the general games industry.

3. Competition and Oversupply

Competition on the top level is for attention. The game industry is locked in a room with the most aggressive attention optimising platforms on the planet, while also being reliant on them for primary user acquisition, setting the industry up for continued value extraction and abuse.

Gaming used to be the best entertainment value for money for many years. This is no longer true: A video subscription is easily competitive with most gaming options on price.

High competition is great for consumers, but not for investors looking for extraction value, and gaming competition is sky high:

• On the root level, competition for attention involves the world's best funded and most ruthless companies who have spent decades a/b testing their platforms into digital crack cocaine.
• On an industry level, many publishers are competing with each other, with countless indy games adding additional options for gamers to stretch their gaming dollars
• Most devastating, the industry is competing with its own backlog, with top end titles now having a shelf-life of 10-12 years. Games like Metal Gear Solid: Ground Zeroes, GTA 5, Skyrim and RDR now stay in storefronts for decades, often reduced to $10 or less during sales events. Skyrim, Fallout and now the barely 10 years old Assassin's Creed Blackflag keep getting re-released and remastered, competing with newer products with an unfair nostalgia advantage and low innovation risk.

In 2026, the majority of games played are six years old and older, with an increasing number of players concentrating on fewer and fewer platform titles.

Aging, often decade old platform services like PUBG, Roblox, Fortnite[^6] consume the majority of weekly gaming time, the remainder of the industry and any new entrances being left to fight for scraps.

4. The Pacemakers are dead.

That last point, self-competition from backlog is rooted in another structural headwind: Technology advancement essentially stalled in the late 2010s, and the industry's primary pacemaker, Nvidia, has, as during the crypto heydays, moved on to dollar greener pastures.

Technical innovation was the predictable, reliable primary pacemaker that drove PC and console gaming forwards for the last three+ decades. Graphics improvements sold games, and, more importantly, they culled older "unplayably ugly" titles from the backlog and competition ... right until it stopped:

The most prevalent PC GPU in existence, with 4% of market share, is still the GeForce 3060, released 6 years ago. The 3090 GPU, the top end of the late 2010s, is still sufficient to max out almost any game. Games like RDR2 still look cutting edge, 7 years after release. [^2]

Nvidia used to drive the industry forward with GPU expansion - new graphics capabilities offering better games and fantasies. By RDR2 this stalled, you can’t sell on “breathtaking graphics” driven by technicals anymore, new experiences have to be gameplay based which is very very hard. 4k was already a bridge too far. 4k gaming, in 2026, still has less than 5% market penetration, the vast majority of gamers still plays at 1080p and below.

This effect extends into the console cycle: For almost 2 decades, consoles offered a way to get curated, cutting edge visuals and features at sub-pc prices. But with 7 year old GPUs still able to drive many games, console refresh cycles rely on more than brute force graphics, a game Nintendo has learned to play much earlier than Sony and Microsoft.

Now, players can choose AAA-gameplay games from 10 years ago on a steam sale that look, on their HD Screens, identical to newer offerings, offerings often comparing unfavourably due to aggressive in game monetisation, DLC and investor driven value extraction more common in newer titles. Even worse, older titles from the nether realms of the 2000s are starting to come back, remastered, or upscaled, to compete with phenomenally expensive to produce new titles for gamer's attention time.

Non-technical innovation, by contrast, is harder to predict, impossible to "cost" and "plan", making it unreliable. Extremely successful games like Minecraft, Pokémon Go often stand alone as highly successful outliers as the result of a unique convergence of factors rather than repeatable blueprints for the industry, making for a terrible investment pitch.

Sure, Nintendo may come and ride to publishers' rescue again, like with the Switch, innovating where others cannot, but that's hopium with a long runway to recovery at this point.

5. AI is sucking ALL the oxygen (💵) out of the room.

The loss of technological progress for games is more than the loss of tailwind.

AI narrative exploding and capturing investor imagination and wallets has drained previously available dollars from the industry into AI ventures, collapsing major deals as investors rebalanced their portfolios.

From Tencent to Netease to the Middle East, investments into traditional gaming have dried up, money redirected to other efforts, more often than not, AI. At a time when every company on the planet is racing to "rebrand" their products in context of AI, lest investors drop them to buy more Nvidia or Big AI shares, the game industry struggles to find a workable angle of how AI is going to grow business, not just tech expenses. There is none.

The industry is caught flat footed with neither credible growth narratives independent from AI nor credible AI growth narratives.

Nowhere is this dynamic more visible than at Microsoft: Just a few years after pitching investors on their massive XBOX vertical integration shopping spree, from Activision Blizzard to Bethesda, the gaming division has become a "stranded asset", slowly bled dry with talent blood sacrifices to finance the insane Copilot Bonanza. Remember kids, only CoPilot is investable entertainment in 2026.

Insert: AI Adoption in the Industry

AI adoption across the industry is anaemic in effect. When you're busy shipping a game, you have little time fighting constantly changing and often breaking tools, and if you actually get funding to start a new venture, you find quickly that it’s impossible to build native AI studios because the ground and definition of "AI native" are shifting too fast.

If you started a game two years ago, doing your best to stay up to date on AI, you'd realised very quickly that you shouldn't be making games with AI right now: Texture generation would have required massive investments from your team to operationalise, investments that would be wasted because Open Source would get there for free in a year or two. Animation models didn't exist yet, today they look like they may be viable in a year. Audio went from zero to 100, while the legal situation around audio is still as toxic as before.

None of this lends itself for making multi year game projects, and AAA, even with the most optimistic AI goggles, are multi year projects. Common sense says "Stay the f*ck away from frontier technology on long running projects" and game companies and their investors, long accustomed to the frontier, actually understand this ... as opposed to everyone else whipping AI adoption of lab products into their companies.

Sure, CEOs are extolling the slam dunk of technology, but double doubt is warranted given that we've neither seen evidence in form of rapidly accelerated games, nor are hearing particularly encouraging stories from the trenches.... on the contrary.

Meanwhile R&D risks and constantly shifting capabilities in the frontier are extreme: You can’t build realistic financial projections, you can't estimate costs when the value of a token changes three times a day and your IDE is bought up and dismantled the moment it becomes successful in the market.

And even when the cost savings that are there, theoretically, like voice over or asset generation, the results are often poison to an overwhelmingly negative to AI audience:

First principles here are not kind to the industry either: While companies like EA were quick to tout the savings from cheaper asset generation and coding, most investors are smart enough to understand that they won't see a penny of that money:

6. AI drives commoditisation, which is not good news

AI based mass production erodes talent and technology moats, allowing more players to release more games at lower cost, into a fixed sized attention market. More supply in a red ocean means less money for creators and publishers and their shareholders and more for the platform, even if you cut creatives with AI.

Industrialisation, this is not: While mass produced cars, TVs and furniture enabled higher standard of living for broader audiences as reduced prices were compensated for by expanding total addressable market, in gaming nobody expects such an effect.

It's also not a new effect, and we already know the winner: Platforms selling access to their users' attention.

With AI, commoditisation is going to move up the stack into the rest of gaming:

Crucially, any narrative of more games or cheaper games runs into simple physics - we maxed the available attention which is colonised by companies who have genetically engineered themselves to maximum addiction. Without new time (4 day work week), it’s a brutal red ocean game companies cannot hope to win in, given that the platforms own the attention algorithms.

Already, there are few price barriers to attention market entry: Unlimited entertainment is the cost of a Netflix or Spotify subscription, free-with-ads YouTube videos and free-to-play gaming on Roblox or Fortnite. In short: There's zero room for credible price action increasing TAM, sorry investors.

When TAM can not expand, as we know from many other markets, competition increases and in 2026, competition happens primarily through ad spend for online eyeballs, on the very platforms competing for attention.

The inevitable result is exploding supply side ad auction prices for gaming audience, the money spent on game production, should it be made cheaper by AI, instead going directly into the pockets of big tech to acquire users, at a time when these companies have really started tightening the extraction screws on their customers to finance their exorbitant AI bills.

There's little doubt that, one day, this new technology will give birth to new entertainment experiences and powerful new gameplay mechanics. But investors have too many better, low risk options than "one day", right now and, with copyright eroded, correctly assess that even if a company finds "the Minecraft formula" of AI, there's little stopping the competition from getting in on the game, especially at the speed of AI cloning.

Economics says that unless there's credible movement to a 4-day workweek, an event that, like the pandemic's work from home period, would significantly shift the demand side of the attention economy in favour of the industry, there's little positive upside from AI for the industry.

7. Macro-economic headwinds

And then there's the whole mess with AI driven inflation, chiefly on hardware prices.

Increasing hardware prices move up the cost of entry

Sam Altman, using pinky-promise money from Nvidia and Oracle, convinced Samsung and Micron to mothball their consumer RAM business [^3], focusing on high bandwidth memory (HBM) for his StarGate projects instead. The result has been that a stick of DDR5 RAM now approaches the cost of a GPU, traditionally the most expensive component in a gaming console or PC system, effectively doubling the "entry level pricing" for non mobile gaming.

And that's before factoring in an equivalent price increase for SSDs and HDDs, and the effects of the Strait of Hormuz disaster, which is expected to drive broad inflation and increased pressure on chip makers due to expected disruption of critical supply for helium and other commodities.

While there's certainly signs that the circular Nvidia economy is overheating, these supply chain headwinds are locked in for several years already, further degrading the industry's investment position, with console makers reportedly considering delays and price increases for future console SKUs.

Even operationally the AI boom has been nothing but bad news for game developers. Their cost, as GPU intensive businesses, are up significantly as competition for the devices is driving up prices, while support from Nvidia, both on the ground and in terms of features, has cratered. In fact, Nvidia has done their best to alienate gamers and game developers lately, their only contribution to the industry this year being DLSS5, or "why don't you spend 10k to give all your games the same AI slop look".

There's a not small part of me thinking that maybe, just maybe, AI hype has such a hard time with gamers because we've had our techbro-overpromising celebrities phase a long time ago with Peter Molineux, Richard Gariott and other early industry luminaries burning their reputation with vanity projects and desperate pitches.

8. Brutal, global headwinds

As if things were not bad enough already, global developments from de-globalisation to great power competition and regulatory concerns are gaining strength.

The cataclysmic failure of Embracer currently marks the low point of the gaming investment landscape, but whether it denotes the actual floor seems doubtful.

Investment uncertainty is putting fear into foreign capital

Much of the western gaming industry was financed by cheques from large foreign investors like Tencent, Netease and of course, as in the case of Embracer, Middle Eastern interests.

The "heist" of TikTok by the Trump administration has shown such investments to be extremely risky, especially when seen through the lens of "cultural influence ownership". Warning signals are already flaring that TikTok and the sale of Electronic Arts to Trump-aligned interests may have been the start, not the end of a trend.

Something something ads

Unity tried. Many others tried. Games spend time, and time can convert into money via ads. It's a nice story bro, but I was there, at Facebook, when we pushed into that industry and when we murdered Unity in the crib for having the audacity to ask for ad rev-share.

In AAA ads don't work. Will never work. Brand efforts like FortNite work, but are expensive and not a scalable industry blueprint.

On Facebook, we had a product called Instant Games that was supposed to deliver the games you love directly into your feed, neatly circumventing the ban on app stores Apple put in place in their platform TOS.

It worked, too well. People who played games in feed stopped scrolling and stopped clicking on other ads. Even when forced as video prerolls into games, playable ads were economic anathema because the platform has to pay the creator a cut rather than just charging the advertiser.

Ultimately, gaming ads are less efficient than other forms of advertisement and certainly not a slam dunk with players. They no doubt generate tons of revenue today, but all previously mentioned factors - especially competition from platform and other players showing fewer ads - don't support a strong industry growth narrative here.

The demise of global IP enforcement

Another "heist", the scraping of all intellectual property into AI models and the increasingly permanent looking suspension of intellectual property enforcement on a global scale does not favour an industry which only recently made billion dollar investment deals on the back of intellectual property.

Few industry observers doubt that the AI industry will walk away with their ill gotten gains, leaving IP companies significantly degraded. Disney's collapsed 1Bn dollar investment in OpenAI on the back of Sora additionally collapsed the "But at least IP has value when sold to AI companies" hopes as well.

It is unclear how things will play out in the long term, it is conceivable that all the money that disabled copyright could also put it back together, but nobody in their right mind would assume that would be a favourable situation to current IP holders. In any case, the malaise of intellectual property in the World of AI is degrading game industry assets, not enhancing them.

Regulatory headwinds

Globally, movements for introducing age checks (added friction), addressing the harms social platforms cause to minors and increasing online abuse are gaining momentum, supported by recent court cases against Meta and others.

Roblox, with its predominantly underage user base, is the most exposed platform here, sharing many of the properties of social media platforms and finding itself at the receiving end of investigative reporting detailing harm to minors, and an ever increasing number of lawsuits and regulatory efforts.

As digital sovereignty movements and child protection measures are gaining steam across the globe, contributing to increased delivery cost and investor uncertainty, the industry's last bastion for high ROI investors, online gambling and loot boxes is under multi front attack in many jurisdictions, adding to the woes.

Landlording platforms extract value

With the demise of physical publishing and the rise of digital distribution, the industries landlords changed from retail publishers like Ubisoft, Activision and EA to Platform landlords like Google, Apple, Valve. These landlords extract money, risk free in form of publishing fees and revenue share of up to 30%, in exchange for attention of their captive gamer audience, or both.

Apple and Google have an iron grip on the mobile audience, while Valve owns practically the entire PC market, unilaterally able to decide the value distribution between consumers and developers. Developers, in this equation, face monopolies for their respective markets and are left with no bargaining power. All attempts to break these platforms, including multiple assaults by the largest tech companies to break into Valve's territory have failed.

The end result of this economic imbalance is that a large share of potential investor profits is going to platforms and their investors (except Valve, which is private), reducing the economy appeal of game investments dramatically.

9. Dispelling Myths

"The downturn is just correction for pandemic over hiring"

Over hiring is often cited as a reason and simultaneous cope to indicate temporary correction but games are multi year products and only a small segment of employers (platforms like Roblox) engaged in it - there’s little evidence to support it.[^7]

The 25%+ reduction of workforce the industry has seen in the last few years is distributed across its entire surface: Many new, funded studios (such as Netease's
Worlds Untold) were mothballed despite operating on schedule and within cost.

Epic Games, operator of the $6B/y Fortnite behemoth, laid off 20% of their workforce 7 years after the start of the pandemic after seeing strong growth every preceding year, raising the question just how long CEOs get to claim the "pandemic over hiring card".

"It's because we lost ZIRP"

The demise of ZIRP, Zero Interest Rate Phenomenon powering the tech boom of the 2010s, is also often paraded around as the reason for the downturn and "if interests go back to normal, everything will be a-ok again".

ZIRP caused TINA - There Is No Alternative (to Stocks) and forced investors into more risky investments to meet their portfolio growth needs for the better part of the current century. Higher, risk free yields for alternative investments such as government bonds, driven by inflation, have removed this tailwind and partially turned it into a headwind.

The demise of ZIRP played a critical role in the initial pull back of capital from tech aligned industries, but it is not a credible explanation for the game industry's apocalyptic situation:

The overall tech industry, equally affected by the scenario, had the same challenges (and made the same claims). But the tech industry also shows, clearly, why this narrative was always a lazy cope, hiding the deeper problem:

Lack of credible growth narrative.

...the moment the tech industry was able to produce an investor credible narrative for investments, AI, it was able to amass more investment than ever in the history of mankind - ZIRP be damned.

"There is an indy boom"

Yes, there is an indy boom, because making games is easier than it ever has been. Steam is full of indy games, but the problem with this cope is that it confuses a supply side boom with investable business or demand.

As already discussed, attention time is the fixed limiter of the attention economy and it has, after the demise of at scale remote and hybrid work, reduced, not grown.

Indy economics on Steam are brutal, with the vast majority of games never making enough to support their creators, let alone their budget back. Finding a successful indy producing ROI has far worse odds than traditional VC, playing /r/wallstreetbets or some of the lower tiers of the state lottery. It's just not an investable proposition given the available alternatives to gamble your liquidity pool.

"The Mystical East is still growing"

The east, especially China, for the longest time was held up as a strong growth opportunity, but it's time to bury this narrative, at least for western companies.

Yes, Gaming is alive, well and growing in the east, but western companies, for a variety of reasons, are increasingly frozen out from access to those markets.

While exceptions exists, chiefly Valve operating a highly profitable gaming service in China, most other companies have not fared well. Chinese regulators have shut their markets to many of them and local audiences are heavily drawn to local games, including a rising AAA-segment of games now competing, credibly in the western market, such as Black Myth: Wukong.

"Mobile is still a growth engine"

The only thing that's really growing, long term, in mobile is the value extraction by the platforms holding attention hostage. The mobile industry has been, for a while already, ahead of the commoditisation curve. Creating mobile games is a solved problem, and like producing sneakers, a simple money for product proposition with countless outsourcers in Southeast Asia and China available to make any vision come true for limited money.

Facebook killed and regurgitated mobile gaming into primarily fake app install ads [^4], because app install became the primary way of user acquisition: The video sells the game, not the game itself and an entire industry jumped up making attention optimised videos to sell to game developers.

Result: CAC is extracting all profit from the industry and VCs abandoned it because the extraction makes their financial goals impossible. Failure to enforce truth in advertising regulation meant competition happens more and more on fakes and grifts which favours the grifter.

The business challenge has long moved from "making a good game" to "user acquisition and retention", with CAC dominating the entire business model, and primarily boiling down to deciding where and how to spend ad budget. Your game can be as good as anything, it won't ever make it if you don't spend a massive part of your budget, upfront, to get people to try it. In other words, a highly risky investment unless you're one of the few big, usually Chinese players, possessing the analytics capabilities to predict product success ahead of spending.

"AI models like Google Genie will one shot games"

Anyone who understands the games business understands this is nonsense primarily perpetuated by influencers with little understanding of gaming. Transformers will certainly seep into many areas of game development (and rendering), but video/world synthesising models are a technological dead end and should be discarded as a consideration.

TL;DR

With all this in mind, the next 1-2 years look exceedingly dark, because there is not a single credible light (of growth) for the industry

Without growth, the industry is uninvestable

And remember: Growth Narrative is a much lower bar than actual, investment risk appropriate growth, but it's the bar the AI industry, for whatever reason, managed to cross with its harebrained AGI and Space Datacentre pitches. Games? Crickets.

Plenty of individual reasons exist to be positive about specific games and ventures, GTA VI among them. Existing, well-monetising platform games may even see a short term reprieve as fewer and fewer challengers are getting funded. But as far as the broader industry goes, the headwinds seem overwhelming to the dinghy fleet stuck in an eternal storm on a blood red ocean against the behemoths that are the attention platforms, uncertain where to chart a course forward.

For people who can afford it, this kind of storm may exactly be the scenario an exceptional team with clear vision and compelling narrative can leverage to break out and succeed.

The existing foundation of the industry, especially in AAA, is no longer load bearing and its economics do not support VC level investments (which never really made sense but at least were compatible from a risk level). Even classic PE slash and burns, as now progresses with Electronic Arts, don't look particularly appealing. Cost cutting, AI driven or not, alone is not restoring competitiveness.

Where do we go from here?

The only way forward, to position the game industry as investable, is to produce at least a credible narrative of why investors should risk their money there rather than binging it on Nvidia fumes in the AI market. The temptation may exist to perform an AI pivot, slobber some Sam-Altman-Style grandiose promises over a prototype and try to sell it off to investors, but that seems a bit late into the cycle already.

For individual studios, the situation is not quite hopeless, especially for smaller outfit with high talent concentration positioned well to take advantage of technical innovation while using the increased iteration speed afforded by AI for creative innovation and desiring. As long as a clear, compelling narrative can be made, money can be raised on a better-than-average risk profile, granting at least a shot at success.

For the broader industry though, at least author, unfortunately, cannot summon up a credible, industry-wide case for investment at this point in time, which would be required to overcome the current downturn.

"Why should I invest, broadly, in Games", apart from the usual appeals to faith ("Games is big", "There has always been games"), does not have an answer, as far as I can see.

The AAA model looks dead, buried and not coming back, at least not without an unknown external impulse or disruption. The future of the industry to me, looks like managed decline, not unlike the Music Industry's slow disintegration and eventual absorption into the Napster Platform model.

Rays of light ... and trends to watch for

There are a few trends worth noting that could produce future tailwind and should be of interest to investors with a longer time horizon. I don't see them amounting to a rescue of a doomed business model, but they represent some hope nevertheless.

Social Media Bans and Age Gating

Age based social media bans or restrictions are gaining steam across the globe. China, of course, has been very active in this area for a decade, but by now the realization that something needs to be done about addictive technology and social media is taking the brunt of it. By now, we're seeing scoped social media bans proposed, in progress of being enacted or enacted in major economies such as Australia, Turkey, Norway, UK, Germany, Singapore and many more.

Should these bans pass and stay in effect, they could provide a significant tailwind for games, especially game platforms ... but outcomes would heavily depend on avoiding getting caught in the regulatory dragnet, which, as we see in China, absolutely has the opportunity to also regulate and constrain gaming time once the technology is put in place.

In any case, knowing that Meta and friends are spending hundreds of millions lobbying to shape regulation here, the industry should consider similar action, especially on regional/national level, because what's bad for big tech here, is good for the industry. Targeted lobbying measures, such advancing legislation and understanding targeting addictive brainrot short form video should also be high on the action list. Here again however, we run into the issue that Big Tech is just playing in a different weight class, their lobbying and government influence dwarfing the games industry in almost any country (Japan and China excluded), especially with AI investment craze in the back.

The mythical four day work week

There's a not immaterial chance advanced economies will have to respond to the looming economic crisis in jobs, AI fueled or not. When automation hit Europe's steel industry in the 1980s, one of the key tools in the economic steering arsenal to prevent unrest was to limit available work hours per worker in order to prevent wholesale job losses and mass unemployment. See 35h work week conflicts in Germany for historic context.

During the pandemic we got a small preview of the kind of stimulus more available time can inject into digital industries, especially gaming, with work from home eradicating commute hours and creating more opportunities to engage with digital entertainment. These effects have been mostly clawed back by now with RTO mandates, of course.

Wherever one stands on the AI equation, should governments get to a pressure point where they have to distribute some of the benefits of advanced automation, currently seemingly going 100% to shareholders, to the broader population, reduced overall work-hours at equal compensation would also be a prime candidate for consideration.

In any case, industry and investors would see an instant value injection (in form of attention time) into the digital ecosystem, some of which benefiting the game industry.

System Change

The key observation to take away from this piece is that the western game industry's primary problems are all rooted in it's inability to be competitive within techno-feudalistic shareholder capitalism. As people keep remarking: Games are growing ok in China, but the specific tailwind in that market is heavily tied to a the fact that China is not running on the American version of Shareholder Capitalism OS, with heavy protectionism, regulatory controls (game publishing licenses which, in part, control both domestic and foreign supply into the market) - a tended garden growing within defined boundaries.

With a myriad of disruptive forces pushing on the US as the primary anchor of an almost global economic system, it would be foolish to discard the chance that the fundamentals currently crippling the industry will change in a way that creates new opportunities. It's just impossible to predict when, how and whether what comes after is better or worse.

About the Author

Georg Zoeller is an industry veteran and troublemaker with more than 25 years of experience across games and technology.

He contributed to many beloved PC and console games at companies like BioWare, Electronic Arts and Ubisoft and lead game industry aligned teams at Facebook/Meta working on products such as Game Streaming, Canvas, GameRoom, Instant Games, Gaming Video and Games Platforms solutions for many years. He's provided AI strategy and technology disruption consulting to AAA studios, publishers and some indy companies over the last few years.

References

[^1]: https://www.ofcom.org.uk/siteassets/resources/documents/research-and-data/online-research/online-nation/2025/online-nations-report-2025.pdf?v=409837

[^2]: https://store.steampowered.com/hwsurvey/Steam-Hardware-Software-Survey-Welcome-to-Steam

[^3]: https://adlrocha.substack.com/p/adlrocha-why-ai-is-making-your-ram

[^4]: Why Fake Ads Dominate Mobile Gaming, Reddit

[^5]: The Tremendous Yet Troubled State of Gaming in 2024, Matthew Ball

[^6]: Roblox is Already the Biggest Game In The World. Why Can’t It Make a Profit, Matthew Ball

[^7]: Cheap money and bad bets: How the games industry turned pandemic success into disaster, GamesIndustry.biz

Further Reading

• The State of Video Gaming in 2026 by Matthew Ball / Epyllion — MatthewBall.co
• The Tremendous Yet Troubled State of Gaming in 2024 — MatthewBall.co
• Roblox is Already the Biggest Game In The World. Why Can’t It Make a Profit (And How Can It)? — MatthewBall.co
• Cheap money and bad bets: How the games industry turned pandemic success into disaster
• The inside story of Saber, Embracer and a scuttled Saudi deal that changed everything
• Norway and Türkiye follow Australia with teen social media bans

via LinkedIn

Look, I’m not saying there is one reason why everyone hates Sam Altman, and I’m sure not saying it’s because he’s delivering disruptive AI.

Rather there’s an awful lot of disruption of wallets going around when a pyramid of schemes collapses on itself and a lot of parties have a lot of reasons.

So I think in the question whether Sam Altman is “this” or “that” is not fruitful.

Sure, one could read the New Yorker article and come to a conclusion or two [2].

The question is … what would it take to stop humanity from retweeting and resharing tech brophets to protect our governments from undue influence. Link in comments, it’s mirroring my points about Apple too which is nice. To summarize:

• Sora Dead


• Disney Investment Dead


• Commerce Dead


• StarGate TX dead


• StarGate Middleeast under the drone of Damocles


• ChatGPT Study Mode Dead


• GPT Store zombified


• Oracle investment dead - Nvidia investment massively downsized


• Microsoft relationship in divorce proceedings.

Let’s be honest, this is expected in the frontier, which is riddled with dead ends and risk. Investors sure knew that, we hope, because if you decided to hand your money there, you did it with an understanding of the risk of funding frontier ventures.

But where’s the thing: When you hear these stories from the frontier - “Walmart partners with OpenAI to rewrite commerce”, be sure to also catch the epitaph, six month later: “Walmart kills OpenAI commerce venture after conversion dropped 60%”.

Maybe, after a few of them, you get the sense pushing OpenAI technology into your business makes you part of the frontier, with all the risks and rewards ... and let us know when you find rewards that are not “managed to convince investors to not exchange our shares for Nvidia ones for another month”.

Because from our vantage point, it sure looks like shareholders performed a value extraction attack on the market that required companies to pretend they could beat the imaginary promises from Big AI companies in terms of future earnings by renting said AI and paying for it in blood sacrifices of jobs and employees.

Look, I’m not saying there is one reason why everyone hates Sam Altman, and I’m sure not saying it’s because he’s delivering disruptive AI. Rather there’s an awful lot of disruption of wallets… | Georg Zoeller | 27 comments

I needed a way to test-drive the new mechanical keyboard I acquired and after some conversation with Claude Code...

Here is Keyboard GP, a retro typing race game with different difficulty levels, top down and raycasting cockpit view, race-your-own-shadow and custom track creation, along with the usual high score and profile integration into This Is Fine OS.

If you have a This Is Fine OS registration key, you can compete and submit your highscores.

I also saw this delightful repository of nostalgia windows 3.1 background patterns and added support for them to the OS desktop settings. They don't always play nice with the fonts yet, but, still, desktop backgrounds from a more civilized, less enshittified time.

via LinkedIn

Commerce Dead. Sora Dead. GPT Platform Zombified. CopPilot (powered by ChatGPT) failed. Nvidia investment poof, OAI bets are dropping like flies.

We’ve talked about OpenAI’s business model being a pyramid shaped “make more promises to get more investor money” here many times, but we’re now past the inflection point - promises are unwinding faster than they are being made.

It’s not like video can’t work, plenty of Chinese companies are making money, it’s just that it can’t work for OpenAI at OpenAI economics while Chinese companies are making the money with better, more efficient models, not having to play shell games with free compute.

The company is now surging spending to pivot to enterprise, because they don’t have the endurance left to survive in their chosen field - consumer AI adoption - which entirely predictably is turning out to be a long slog because an sycophantic consumer model optimized to drive engagement is not a good fit for enterprise.

Microsoft’s 3% conversion of paid CoPilot (out of some 425million) seats shows that enterprise business isn’t exactly humming either. Claude Code is essentially the only product in the market with strong enough product market fit and economics to look like the future.

Meanwhile the major investors behind OpenAI - Blue Owl, Oracle, Microsoft and friends all have lost considerable value in the market in the last quarters.

It certainly looks like the main screw that’s holding the US AI narrative together, which was always lose, is about to fall out. Somehow I doubt the promised horny GPT chatbots will save the consumer business too, they are more likely regulatory bait across the globe.

And that’s a problem because the “valuation” of the company is solely predicated on its brand and massive consumer user base, of which only 4-5% are paying for the service.

That’s a huge broblem because these economics lock you into ad based financing at a time Google and Meta altering the deal and the entire ad economy is re-configuring.

The initial proposals from OpenAI on ad pricing are laughable when adding it ON SITE cuts conversions to 1/3rd. Insult to injury here because Amazon used the courts to make clear no OFF SITE commerce was going to happen either.

There’s a Hololens / Occulus sized joke in the Valley that when your consumer play is finished, you sell shareholders on enterprise to buy time. That's surely looking like it’s happening here. Looks like the only thing Sam Altman is “dropping” lately is feathers. What will the poor influencers do when their Brophets are abandoning them, chill crypto again? 🤡

And that’s actually an underrated signal: Sam’s hype generation x fundraising as a tech Brophet was always OpenAI’s best asset and it is failing, he’s been on defense for weeks now.

Next stop: More taxpayer / military pork and an IPO pushed by Forbes articles to retail bagholders “Could be with 10T in 10 years” and Cathy Woods consumer carpet bombing - “Cathy woods loads up on THIS secret tip”.

Disney Exits OpenAI Deal After AI Giant Shutters Sora | Georg Zoeller | 29 comments

Further Reading

• Why OpenAI's Chat Commerce play was always investor bait.
• Why Walmart and OpenAI Are Shaking Up Their Agentic Shopping Deal
• Amazon wins court order to block Perplexity’s AI shopping agent
• What does the disappearance of a $100bn deal mean for the AI economy?
• OpenAI investors face risks as losses mount - Dr. Jeffrey Funk on LinkedIn

via Calpaterson

A worthwhile to read essay diving deeper into prompt injection, using easy to understand examples exposing the seer breadth of the attack surface and hopefully convincing the reader that there's no "fix" for this problem.

The problem isn't actually untrusted users, the problem is untrusted material - of any kind.

“Disregard that!” attacks

via Ssrn

An excellent paper to add to the pile of papers proving that generative AI is primarily lossy compression, in this case via a clever use of finetuning.

The whole AGI / Intelligence humbug has, from the start, been about hiding that in the end Google (and everyone else) is just doing Google Books again, a project squashed in court before, just with a “transformative” retrieval UX glaze of paint and terminator narrative…. and getting away with it.

Our findings offer compelling evidence that model weights store copies of copyrighted works and that the security failures […] undermine a key premise of recent fair use rulings, where courts have conditioned favorable outcomes on the adequacy of measures preventing reproduction of protected expression.

Most of the “economic impact” aka efficiency gain currently ascribed to AI in fact come from the legal engineering - the centralization of knowledge, formerly decentralized and democratized over many actors in the economy onto single platforms and the implicit, by abstention, permission to ignore existing law out of fear of missing out of the future.

Add to it the destruction of limiting regulation by the same narrative - sustainability, non discrimination, reliability requirements and you got yourself “efficiency growth” most governments see as desirable because it moves economic measurements, but in fact just reallocates value from workers, creatives and everyone who has to suffer through degraded, unfounded societal functions [^1] to tech shareholders.

Removal of friction and centralization can increase efficiency - any government could centralize everyones works and make the available via an API too, but we’d probably call that communism unless they charged for it,…

The Technical angle

The semantic retrieval capabilities of the transformer are genuinely novel and exciting, however they are balanced out by massive, at present unfixable architecture flaws - chiefly prompt injection and hallucinations - that preclude the use of the technology without degrading reliability … aka the majority of use cases for GenAI only work if we accept degradation of quality, often in areas where quality is life defining: Healthcare, Job seeking, Crime, Justice, Finance.

There are massive costs to the AI boom as a result:

For example, an intellectual property hub like Singapore, having spent decades building up IP industry and rule of law as a major competitive advantage in the SEA region, is now pushing heads first into GenAI across all businesses , creating a massive chasm that will, eventually, have to be bridged - either at the cost of the rule of law or technology stance.

The tough choice for people and business owner alike is that they either have to bet on the death of IP - passing any IP though a transformer at present effectively strips it - or on the failure of the AI narrative.
More than a trillion dollar are betting on the former for now and most, especially those located in more law abiding locations outside Silicon Valley, can’t or won’t choose, leaving them stranded and unable to act.

[^1]: The value extraction from AI is degrading everyday life

Just a moment...

via LinkedIn

Chat commerce was always a cludge, even before OpenAI used it as a fundraising narrative last year.

The history of chat commerce

It became big when Facebook and friends launched live streaming which created a massive live commerce segment - in some Asian countries approaching transaction volume amounting to single digit of GDP.

Night market stalls now streamed their product When live commerce appeared, platforms had no commerce tooling at all, so messaging the creator was the only way of getting a transaction done.

It was “unstructured” Clever and hungry Growth VP types - at constant war with other VPs of other surfaces for headcount, the metric gating promotion to higher VP ranks - instantly realized this was a career defining opportunity - using the old “the data shows the demand” they got approval to kick off international efforts to “capture” this transaction volume.

But if you worked in Big Tech at any point, you understand products that fall between VPs - like Messaging vs Commerce vs Payments vs Live/Feed are hell precisely because of politics, VP competition, bell curve ratings and priorities. You avoid them like hell because if your number one priority is someone else’s number 3, them de-prioritizing your product kills your chance to deliver and with it puts you at risk of not meeting goals, which, for some jobs like engineers, can wash you out of the company.

For example, adding a buy button to Live Streaming would be a superior solution, but the result could be loss of feed time (people who buy stop shopping), so you’d hurt your own “time in feed” goals team while helping the chat team get to meet their messages sent metric and the payment team, capturing the Total Payment Volume (TPV) with their goals.

That means they’ll get headcount and promotions and GPU, likely from your budget. This gets worse when the top level areas are “between” top level VPs - like Payments and Messaging.

Anyway, chat commerce kind of died for Big Tech as an area of interest because of execution and instead was captured by TikTok and smaller apps.

Nevermind this though, the one lesson it should have taught the VPs, some of whom are now in charge of OpenAI commerce efforts, that shopping was the result of entertainment, an activity (watching live streams to hunt for deals, social interactions with sellers, etc).

You don't beat hyper-optimized systems with new technology

App based shopping is a maximally optimized experience, especially for companies like Walmart or Shein. A decade plus of solid genetic engineering, one a/b test at a time.

This means the notion that somehow you could massively move the bar on core metrics by dropping in an LLM and entirely new paradigm was completely preposterous from the start and OpenAI’s defeat in both of its initiatives was totally predictable for anyone involved except hapless investors.

It must have, at time of proposal, been apparent to OpenAI leadership, but I'm sure they enjoyed the free investor narrative and the opportunity to collect some premium observability data on Walmart's Checkout operation.

Note: The author lead partnerships Engineering for Commerce and Payments and, at times Live Video, in APAC for a certain big tech.

Chat commerce was always a cludge. It became big when Facebook and friends launched live streaming which created a massive live commerce segment - in some Asian countries approaching transaction… | Georg Zoeller

Further Reading

• Why Walmart and OpenAI Are Shaking Up Their Agentic Shopping Deal
• The gravity of OpenAI's failing bets has crossed an inflection point

I stumbled on a pretty neat app called Channel Surfer which fits youtube into a classic cable TV channel format.

It's an interesting experiment that, for whatever reason, nostalgia or scarcity, really changes you you perceive the content, which suddenly becomes ephemeral.

This inspired me to add a similar, RetroTV app to This Is Fine OS, filled with various youtube videos accumulated over my work in Tech and Gaming.

As a neat side effect, if you register a jellyfin API token in the OS system settings, it will convert your jellyfin library into a bunch of TV channels too.

I also added the original ChannelSurfer to the This Is Fine OS App Store, if you want to try that.

via Youtu

TOP AI EXPERTS: AI is Coming, And We Are NOT Ready. AI is evolving faster than society can keep up. What started as chatbots is turning into autonomous AI agents capable of running tasks, businesses, and entir…

TOP AI EXPERTS: AI is Coming, And We Are NOT Ready (Emergency Episode)

via LinkedIn

Pre-emptively because people are yet again going into existential robot crisis over Alibaba’s self improving AI deciding to go unauthorized crypto mining in their terribly named “Let It Flow: Agentic Crafting on Rock and Roll, Building the ROME Model within an Open Agentic Learning Ecosystem” paper.

No, it’s not SkyNet.

Self improvement “research” is brute force discovery, basically shooting tokens into the model to generate ideas for optimization, testing them, and swiping right on the ideas that improve the target metric. LLMs models are compressed knowledge, inference is the act of retrieving the most likely context related to the input prompt, which makes for good idea generation “WITHIN THE CONFINES OF EXISTING TRAINING DATA KNOWLEDGE”.

You can use that for pretty efficient search space optimisation, more efficient at least than brute force/A* similar approaches, which itself can be used to generate “ideas” for exploring unknown space too, especially when a capable human sets up the initial premise and sandbox to explore.

Have a look at karpathy’s autoresearch script (ignoring his insane ramblings about AGI in the process) for a very simple implementation of this.

Unfortunately, as we all know, sandboxing AI models is not easy, and it cannot be achieved with prompt tokens. Jailbreaking, prompt injection or research going sideways have the same root cause, which has zero to do with intelligence or some kind of demon or shoggoth in the machine, and everything to do with pattern drift, (auto) prompt injection and context degradation.

A single hallucination, self injection, bad pattern in the training data can, given sufficient compute depth and tools access (why did this model have internet access?) lead to a branch of exploration that ends up being “I need this file to fulfill my goal, I can’t reach it, let me find how you solve lack of access”, which, given models with access of every single reddit conversation about bypassing corporate firewalls for gaming, every single CVE, and every Neal Stephenson novel in it, absolutely ends up in the model trying to “break out of it’s sandbox”.

We know, because this happens all the time when you work with Claude code at home.

The risk in this scenario, as much as AI bros would like you to see the model as the root cause and “scary, powerful entity”, is purely human negligence, criminally in fact:

Compared it biosafety, because it’s the same problem set: If you’re conducting gain of function experiments with diseases in a “sandbox”, playing with polymorphic code or with radioactive material capable of critical reaction, you are regulated.

Because, no “intelligence” needed, all these scenarios have “runaway” potential if the experiment sandbox is imperfect due to negligence.

The one, existential risk from AI isn't the tech, it’s AI bros who have escaped regulatory oversight we successfully use in other sectors to prevent careless people from destroying the world.

Pre-emptively because people are yet again going into existential robot crisis over Alibaba's self improving AI deciding to go unauthorized crypto mining in their terribly named "Let It Flow: Agentic… | Georg Zoeller

Further Reading

• Let It Flow: Agentic Crafting on Rock and Roll, Building the ROME Model within an Open Agentic Learning Ecosystem
• Mommy, there's a Shoggoth in my GPT!
• Mommy, there’s a Demon in my LLM
• GitHub - karpathy/autoresearch: AI agents running research on single-GPU nanochat training automatically
• Book Review: Careless People: A Cautionary Tale of Power, Greed and Lost Idealism. Sarah Wynn-Williams (2025).

via LinkedIn

And with one stroke of the pen, the commercial web developer profession, the SEO experts, the DR agencies were gone, replaced with an automated offering guaranteed, by the great machine, revenue optimal for the it’s owners.

Re: Google patents auto generating a personalized website for your website, on their turf.

It was the same gambit Meta had done just weeks before, informing companies that advertising directly with them, letting their algorithms handle it, would guaranteed optimal ROAS while ending the entirety of direct response advertisement and web agencies.

The owners of the great math deciding the distribution of eyeballs had finally decided to cut out all the middlemen, to stop pretending, and who would bet against them?

It was perfect. Revenue optimal for companies critical to “win the race”, allowing them to keep up their side of the Nvidia recirculating revenue bargain that had allowed the US economy to do the impossible, to defy the laws of math and finance.

Sure, there were hallucinations. Sure, people complained that disintermediation with unreliable AI was dangerous, unethical. Sure, Pizza with Glue [^1] was not a runaway hit, barely as popular as the Hawaiian variety.

But it was good for Google and what was good for Google was good for mankind.

After all, OpenAI had started it, had created a product eating page impressions alive.

But Google was going to finish it.

Who would believe anyone but the owners of the math could deliver best results on their platforms where they controlled every lever, every eyeball?

Who would resist when nobody resisted when they had come for taxi drivers, travel agents, artists, authors, and finally engineers?

Let them eat slop

You can have your slop and eat it too”

It was the final days of the old web, and it was inevitable the moment they had successfully ended anti trust regulation by equating tech control with national security and established the Big 7 economy, a new economy offering growth, token growth only bounded by energy and compute spend.

An irresistible bargain for growth starved bureaucrats managing inevitable decline at the hands of demographics and a splintering global economy. Having bet everything on the “AI” card, having sacrificed the consumption economy to the compute economy, they had no path to resist anyway.

The year was 2026.

It was the dawn of the third age of web-kind, and final days of the ad economy, the year the great embeddings came for it all.

See my prediction

[^1]: https://www.bbc.com/news/articles/cd11gzejgz4o

And with one stroke of the pen, the commercial web developer profession, the SEO experts, the DR agencies were gone, replaced with an automated offering guaranteed, by the great machine, revenue… | Georg Zoeller

via Arxiv

Super simple premise: If you repeat your prompt, non-reasoning LLMs performance can improve dramatically.

It's useful to know, but also worthwhile to keep in mind that model developers may choose to integrate the behavior on their back-end to take full advantage of benchmaxxing those benchmarks. The half-life of such prompt engineering tricks is usually fairly limited as a result and their benefit tends to expire or turn negative after a while.

Due to caching, the additional input tokens tend to be extremely cheap.

Prompt Repetition Improves Non-Reasoning LLMs

This is fine OS - Now with Win32 Support

The this is fine OS Stack running this blog now supports win32 executables, courtesy of a full retrotick integration via a new app.

Just upload the .exe, double click and run.

I also added support for running .gb (gameboy) and .gbc (gameboy color) cartridges via a WASM compiled version of ironboy, a high accurace Gameboy emulator written in rust, properly integrated with the virtual file system and app controls.

This, of course, is in addition to the already existing capability of running dos games from .zip and .jsdos packages.

via LinkedIn

I’m getting tremendous value out of AI, as are many others, however the magnitude of the layoff is a dead giveaway it’s not AI.

Just like DBS announcing a 50% reduction of its contracting workforce [^1] last year (!), it indicates economic reasons, as at the maturity of AI, the absolutely sorry state of securing it in corporate environment and to enterprise standards, it is a complete pipedream that AI systems are capable of replacing 50% of jobs at this order of magnitude / company size.

What this is: AI responsibility washing of a company which is failing to meet growth goals (shocking, I know when you look at the macro environment for businesses not included in the recirculated Nvidia money economy) and, instead of fessing up and replacing the leadership team, is making an emergency blood sacrifice of employees to pay off shareholders to not dump them for some European defense stocks.

👉 Layoffs to grow shareholder payout are the poor performing CEOs AI “strategy”,

That’s not to say AI has no market impact outside investors huffing NVDA residue and the destruction of certain business models like Stock images and democracy - smaller startups absolutely have gained a tremendous amount of leverage and velocity from code generation, but it’s that smaller scale and the more concentrated nature of responsibility and decision making that affects it.

When you increase the automation favor in a complex, connected system like a modern enterprise, you are bounded by Amdahl’s law. [^2]

At the scale of Block, human decision making, validation of results, non automatable compliance and bureaucracy are the limiting factor of the achievable efficiency gain and 50%, at the current fragile and rapidly changing natures of GenAI solutions, is not credible, especially not in regulated financial services (even in the “Peace board donation for pardon” US economy)

What’s credible is “Oh F*, the market is very bad” and “Damn, if we want to adopt this technology in earnest, it’s gonna be a painful corporate change management process because it doesn’t neatly map onto organizational structures and we don’t want to spend several quarters and untold money on change management”

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Growing companies do not engage is massive workforce reduction. As Brian Boland comments aptly in the comments, it's the pump economy:

Company: "We are hiring so many people!" Market: "GROWTH!!!! -> BUY!!!!"

Company: "We are letting people go because of new, better technology!"

[^1]: https://economictimes.indiatimes.com/jobs/hr-policies-trends/dbs-to-shrink-workforce-by-4000-in-3-years-due-to-ai-adoption-ceo-gupta/articleshow/118526976.cms
[^2]: https://en.wikipedia.org/wiki/Amdahl%27s_law

I’m getting tremendous value out of AI, as are many others, however the magnitude of the layoff is a dead giveaway it’s not AI. Just like DBS laying off 50% of its contracting workforce last year… | Georg Zoeller

via Arxiv

An excellent lay of the land of the massive attack surface that are AI agents, a study of which should immediately disabuse any professional from ideas that agents will be running critical functions in the economy - such as procurement - anytime soon.

Agents of Chaos

via LinkedIn

Feeling aggrieved because "Chinese AI" labs are performing "distillation attacks" against poor Anthropic and OpenAI?

Sweet sweet summer child, this is how everyone’s AI sausage is made.

That’s why Google, OpenAI and Anthropic banned XAI. That’s why Anthropic banned OpenAI. That’s why llama models self identified as ChatGPT. That’s why Reddit sued Anthropic over TOS violations.

That's why Claude Sonnet identiifes as DeepSeek when asked in Chinese, Anthropic wasn't going to pay any actual Chinese people to distill their knowlege into the mode.

That’s what AI models are: Distilled knowledge. Training is distillation of training data, raw bits of entropy condensed into models. Lossy compression storage [1].

Knowledge taken from the internet, scraped, violating countless terms of service pages, copyright and IP laws, compressed through training into model weights.

In this case it’s especially spicy because Anthropic gets paid for the API access. They profit from it; they report the API business growth to their investors but oh no the evil Chinese.

The reasons this was put out is very simply:

As long as knowledge is free for all, as long as copyright remains broken, these companies have no moat. Distillation cannot be stopped, because it’s a byproduct of normal inference, because the stored knowledge is the only value in the model, is the capability. Nvidia wrote a paper on it [2].

So they are now drumming up the Red Scare PR to ask the government to pull up the ladder, make the same practices they used to amass all the knowledge from every author and creator, illegal for the competition.

The next step then will be to use the same money that was used to disable copyright enforcement by instilling FOMO into governments to put it back together in a way that protects the AI Labs: All knowledge in the wild is fair game, but once it’s compressed into a transformer it’ll be copyrighted.

This ensures that these companies can sell what they took from the internet back to the internet, pay per token, while their scraping and data fracking destroys the original sources.

This is AI. The whole “race” is bullshit narrative because there is no race. There is no destination.

There’s just a massive reallocation of value from the commons to private interests, a privatization of knowledge that needs to maintain the ability to charge tons of money to make the investors who finance the coup whole again.

With Chinese companies keeping the knowledge in open source, Anthropic had no long term sustainable business. Which is why they are running these press releases to sell to the public the need to wipe out open source models under a Red Scare narrative.

Another spicy one: Most of Ycombinator startups run on chinese AI because that’s the only way to escape the landlords and therefore the only way to get funded [3].

Remember these guys were all “It shouldn’t be copyright protected because human children learn too from looking at data”.

Anthropic specifically with its "we don't know if there isn't a demon or consciousness in our models" shtick, narratives designed to distract and keep the coat of magic on the technology, is a deeply deceptive company executing a brutal IP heist from the commons to their private investors.

No sweet summer child, this is how everyone’s AI sausage is made. That’s why Google, OpenAI and Anthropic banned XAI. That’s why Anthropic banned OpenAI. That’s why llama models self identified as… | Georg Zoeller | 31 comments

Further Reading

• Claude sonnet 4.6 says it’s DeepSeek when system prompt is empty
• The whining will only get louder from here on out
• Small Language Models are the Future of Agentic AI
• Soft Contamination Means Benchmarks Test Shallow Generalization
• Reddit Sues Anthropic, Accusing It of Illegally Using Data From Its Site
• Anthropic Revokes OpenAI’s Access to Claude

Goes right to what I wrote yesterday: Big Tech is tired of giving you the illusion that online ads is more than just giving them money for reach, that you can outsmart their algorithms and beat them at their own game.

As many small businesses have already discovered, and as every single business exposed to digital demand making is about to find out, there are no partners anymore, there’s just future growth and everyone will be brutally extracted.

Because for 4 years now, these companies have pumped ungodly money into AI, much of it not returning ROI directly.

Instead, AI has been accelerating everyone’s ability to create digital goods, including advertisement, commoditizing products and creating a supply side glut.

And when more product competes for the same eyeballs, the eyeballs, or rather the service selling access to them becomes more valuable and expensive.

As businesses see their reach drop and ROAS crater, they find out just how reliant their own business has become on the digital channels, forced to spend more and more to keep growth goals.

At the same time, Meta, Google, Amazon and Apple are starting to brutally cut out the middlemen with AI. With full control over the algorithms that deliver, AI ads will be successful and required because the platforms decide it will be with changes to their delivery algorithms … and they are selling the solutions fiectly to consumer.

The Direct Response marketing partners, grown and supported with vast resources by Meta and Google in the last decade are now just buffer to squeeze into Meta’s direct platform offerings.

It’s classic market abuse, but governments have failed to understand the implications for way too long and are now finding out that Big Tech can single-handedly drive inflation by way of ad spend, the silent tax factored into very single product.

They are finding out that Big Tech is a net job destroyer, not creator as Social Media Managers, SEO experts, Growth marketers, jobs often paraded as an example of technology creating new jobs, only existing at the grace of Big Tech and that AI has changed the equation.

Eyeball monopolies mean, just like product and sales monopolies, that there is no choice (for digital demand making) and where there is no choice, quality ceases to matter.

It doesn’t matter how good your ad is, just like it doesn’t matter how good your product is, when nobody sees it and Platforms control all the eyeballs.

Millions of dollars in ad spend for your product is wasted if ads don’t deliver and it’s not SEO that is in charge, it’s Google’s and Meta’s financial team.

Without effective regulation, with governments trying to find every excuse to not tempt tariffs and worse from the US, now run by the tech broligarchy, regulators DOGE’d and the rule of law moribund, bleeding out to pardons for campaign and peace board donations and golden iPhones for non enforcement.

It’s game over, “leave it to the market” has arrived at Cyberpunk Megacorps.

Further Reading

• We’re altering the deal, again. Pray we don’t; lol, no just give up.

While there’s always value in exploration, frontier economics heavily favor second movers, so don’t let yourself be whipped into AI FOMO.

GenAI is an exciting new frontier and has consumed basically all of societies attention and money.

This comes with a sense of importance, being part of the future, enlightened above the rest and responsible to also ship them into the frontier lest they may be left behind.

This is a myopic view. Zoomed out, we can see of the knowledge will be ephemeral as knowing assembly language or windows for workgroup networking or prompting stable diffusion 1.5 from 4 years ago is today.

Half life of knowledge on the frontier is shorter than ever in the history of mankind, and of the many branching paths taken, only a handful lead to durable long term patterns and learning.

The knowledge gained for sweating the “prompt engineering” craze of 2022, the RAG an Chatbot obsession of 2023, the “cram AI auto complete” into every product surface and “AI IDE” wave of 2024 has mostly expired, with only narrow pieces still holding value today.

Because it’s not a race, as the techbros would like you to believe, but a marathon without end.

There’s value in tinkering but from an energy conservation perspective, the critical strategic choice in marathon, second mover is the right position to take for all but the most ambitious competitors.

Nowhere is this dynamic more apparent than in frontier lab AI training. Of the hundreds of billions of capital burnt to train ephemeral “top tier” models to dominate benchmaxxed charts for 2 weeks, fragments of fragments of value remain … an orgy of infrastructure spend being burnt in glorious GPU fire into NVDA fumes huffed by the entire US economy to keep the GDP afloat.

Meanwhile, on a fraction of that spend, Qwen, DeepSeek, GLM and friends moved on the path cleared by Llamas with superior, orders of magnitude cost efficiency, spending on science, not GPU.

Where is your Sora God now, laughs AI Morgan Freeman on Seedream2, reminding US companies and customers that they still have to pay back investors, that the act of pushing the pedal to the metal has depleted years of capital that could have been spent more wisely on high speed rail, clean energy, poverty reduction, education, healthcare and opportunities in society.

And then there’s the nature of the technology, it’s uncanny ability to automate and commoditize any task of value as long as it has discernible patterns.

By all means, learn, understand, explore, but don’t whip everyone into the frontier s where Darwinism favors the second moving along the paths derisked by others.

Should AI automates all the jobs, and the consumption economy doesn’t collapse, frontier jobs are the first, not the last to go, because they are feeding the very data pipelines training their own replacement as 2022 prompt engineers found out when Dalle-2 and Nanobana killed their magic “best quality, 10 FINGERS ONLY, NOT UGLY!” incantations.

Further Reading

• U.S. Startups Adopt Chinese ’996′ Work Schedule in AI Race

via LinkedIn

Most founders are playing the wrong game and don't understand why. The value of OpenClaw isn't the tech, it was the ability to create a hype wave. It's the same with OpenAI, Cluely, Windsurf, Cursor, Etc. Long term these products have zero defensibility, their value is the customer acquisition for the exit entity.

Why is attention so important? Because distribution is owned by big tech and if you pay their user acquisition costs, there's no money left for investors. So the only startups that are viable in this scenario are startups that have found a way to create distribution without paying.

This of course incentivises crass, societal norms busting behaviour. The Cluely guy was very open about burning his academic career in a blaze of "I cheated at all big tech interviews" for the effect that got him millions of dollars from a16z.

Sam Alman's tweet on Studio Ghibli creating a 300M user opportunity for ChatGPT is worth billions in GTM money. See also [1] where I explore this topic a bit more.

Attention precedes any other quality a product may have as usefulness/quality can only be assessed after the fact/purchase, which can only happen if a product enters your attention.

In the age of AI, where technology is increasingly commoditised, the primary business problem, the first business problems investors have to solve is escaping the attention landlords that are bleeding the startup ecosystem dry.

You pay 30% App Store fees, you pay 5% for compute and SaaS (soon up to 15% with AI), you pay up to 40% in customer acquisition costs to Meta/Google/Apple/Amazon - for ads, featuring, influencer marketing, etc.

If this sounds all wrong, well congratulations, you've discovered that tech companies have successfully replicated what F&B has for decades ... landlords extracting ever increasing value from entrepreneurs, slowly smothering innovation and risk taking while lecturing Europe about how is killing innovation.

Just like Singapore or Tokyo have a handful of companies operating all malls and commanding the majority of foot-traffic, the attention economy has a handful of tech companies controlling where the eyeballs fall and which products even get a chance in the market.

In the past, companies could pretend that they could outwit the platforms with the dark arts of SEO, viral marketing and more, but that's increasingly revealing itself as an illusion, a holdover from a time when companies had to fear regulatory intervention or anti trust that no longer exists in a world where a donation to a peace board, the invention of a peace price or a golden iPhone present can get you exempted from tariffs or regulatory scrutiny.

The landlords now own the US government and both VCs and Big Tech don't expect that to change.

VC Money, therefore, no longer chases technical innovation, but attention generation. I'd suggest looking at alternative funding like SPRIND - Bundesagentur für Sprunginnovationen instead if you want to create real value.

Most founders are playing the wrong game and don't understand why. The value of OpenClaw isn't the tech, it was the ability to create a hype wave. It's the same with OpenAI, Cluely, Windsurf, Cursor,… | Georg Zoeller

Further Reading

• Attention Summoners and Worm-Riders in the creative desert that is the attention economy.
• Opinion: The predatory landlords of the platform economy

via Nature

A quality study by researchers from the Oxford Internet Institute and the Nuffield Department of Primary Care Health Sciences at the University of Oxford, and published in the scientific journal Nature Medicine throwing some cold water on the often benchmaxxed claims of AI diagnosis performance.

Generative AI systems are lossy data storage and retrieval systems, and they can be excellent at finding a needle in the haystack or retrieving matching diagnoses from our ever growing, a planet scale data stash.

At the same time, medical is a field full of out-of-diagnosis patterns, with humans being far more diverse in their genetic makeup, microbiome, etc. than most people realize. I tend to frame this as "look how different everyone around you looks on the outside and understand that the same is true on the inside.

Out of pattern distribution confounds diagnosis. The difference is a well trained physician dissecting the information from all sources, including AI, to make a decision and separate hallucination from probable diagnosis.

It's the dilemma of transformer based AI systems: Your operator needs to be skilled to be able to challenge the highly confident but often wrong predictions the algorithm makes.

Reliability of LLMs as medical assistants for the general public: a randomized preregistered study - Nature Medicine

Further Reading

• Medical Hallucinations in Foundation Models and Their Impact on Healthcare
• HealthPrecision’s Medical Brain: 98% Accurate or 100% Bullshit?

via LinkedIn

“Age “ verification is a trojan horse meant to create access control far beyond age.

When the Lord Mandelson, / Blair / Thiel / Epstein faction in the UK convinced the government to fight the negative effects of Social Media with age verification, they knew exactly what they were doing … push the country from the frying pan of Big Tech radicalization, misinformation and riots into the fire of US sanction regime via Palantir.

This is China style deplatforming for the western internet, offend the broligarchs / Maga faction get randomly rejected from every website and service via the age verification in any country that’s allowing US sanctions to apply - like the EU which still had not acted against ICC judges and EU citizens being rejected from commercial services, credit cards and hotels in EU after US sanctions.

Creating the fire, scaling it and then peddling the solution for more business or regulatory favors further entrenching dependency is a classic silicon play and a lot of governments are still falling or it or are silently aligned with the outcomes.
“Age “ verification is a trojan horse meant to create access control far beyond age.

One could argue that's happening at a political level in the UK where US/Epstein affiliated political groups seem to control the vast majority of options voters have.

“Age “ verification is a trojan horse meant to create access control far beyond age. When the Lord Mandelson, / Blair / Thiel / Epstein faction in the UK convinced the government to fight the… | Georg Zoeller | 11 comments

Further Reading

• The Age Verification Trap

via LinkedIn

You are competing for the attention of hiring managers with people who can apply to 73.000 jobs in one go. Without fundamental change in hiring practices, this will end up like the ad economy where you're competing with scammers for the same attention, paying the platforms a fortune.

The attention economy is fundamentally broken because automated behavior is shifting value to platforms with zero incentive to fix it, because they are profiting at scale.

How much profit? As much as 10% of Metas global turnover, conservatively, for a single company [^1].

The same for every other platform. As long as consumers have little choice, as long as network effects and a stranglehold on attention maintain a monopoly or duopoly, Amazon benefits from slop books competing with real authors on the same platform because the sale isn't made with quality and authenticity but by paying for featuring ... and no incentive to fix it.

The author self financing for 2 years to create that book is at a disadvantage to the AI book scraping and regurgitating company because they have zero expenses for creation and can therefore spend their budget on ads.

Platforms connect two sided marketplaces: Advertisers and Consumers. Hiring Managers and Job Seeker, monetizing access. Any imbalance in demand or supply creates power for the platform.

The more product is created, be it movies, games, or resumes, the more the platform gets to charged for delivery. AI enabling more video games to be made faster? Any savings by studios and publisher will end up paying to overcome the increased competition for eyeballs in the market.

Likeways, Job queues being flooded with automated resumes means companies selling background checks, filtering, etc not only become mandatory (usually owned or invested in by the platforms), they also become platforms, extracting money from both job seekers and companies trapped in their web.

AI does not fix this. On the contrary, it makes it worse because production of resumes becomes essentially free and defensive AI is unable to distinguish good from bad tokens.

While breaking up and regulating monopolies and platforms is the real solution here, the sheer weight of their value extraction and rent seeking smothering innovation and businesses far more than any "EU over regulation" does, there's things individuals and businesses can do:

Throw Out The Playbook. Stop Hiring globally. Stop Hiring on Large Platforms. Go Local. Go Regional. Attend Events. Run Events. Partner in your community. Strike School Partnerships. Host Events, Advertise on subway, bus station, campus. Build your own pipeline, move up the funnel. Build startups that do this for others.

And do it now because things are going to become immeasurably worse with AI. Cost of user acquisition and hiring for real businesses competing in verticals like longevity or weight loss for example has gone exponential due to Meta's refusal to ban scammers, pill mill competing for the same eyeballs.

[^1] https://www.reuters.com/investigations/meta-is-earning-fortune-deluge-fraudulent-ads-documents-show-2025-11-06/

Sign Up | LinkedIn

Silicon Valley companies may be owning the ad and attention economy, but paying for ads and attention, in their eyes, is for losers.

While traditional companies design creative campaigns to evoke emotions and tell stories, carefully avoiding other brands assets - and pay to have those put in front of eyeballs by tech and influencers, the Memetic Attention Economy of the Silicon Valley AI Edgelords works differently:

The cult leaders of /e/accel, crypto and toxic techno optimism cults function more like Dune’s Wormcallers, dropping their memetic plungers onto X, using the identity, work and recognition of others to attract attention:

As Scarlet Johansson found out and Hayo Miyazaki have discovered, their lives work and the attached potential to evoke emotions and attention are being used to summon massive, sandworm like hype waves that sweep with the zero nuance style of memetic warfare through the internet, creating awareness for the products he wishes to peddle.

Once the attention worm is summoned, the work is left to the botlike army of LinkedIn zero-entropy hypewave "Author - Web3 CEO - AGI" influencers who rush in to ride the hype wave to spread the good news of “another drop” from the high priests of AI, declaring the imminent extinction for the worlds creative profession accompanied with their inference offering in form of a Studio Ghibli style AI Slop so the faithful may marvel and forget that OpenAI has no moat.

Along the way, the carefully built brand and artistic expression of thousands of artists is commoditized, devalued and left stained, with no recourse for creatives as hapless governments bow down to growth narratives that will never materialize.

No, the AI lords are not content with taking all content for training without consent, they also revel in taking others achievements to create attention. Their products, which would never be able to output in the style of Studio Ghibli if not the work of studio Ghibli, is grow on the attention that can be created with Miyazaki’s life work so it may be monetized. Not to pay artists but to buy another luxury car and government influence.

Cure cancer? Nice story bro.

The influencer economy is a modern sweat shop that forces people to jettison their dignity and values for rapidly devaluing likes and shares, barely even money to drive the message of the cult leaders, incentivized by algorithms honed human base instincts and monetized by everyone along the way.

The collateral damage is the pollution of human knowledge, the distortion of reality, the ever increasingly cost of purifying truth from AI slop and the ruins of creative professionals deprived of lifelong careers, meaningful work and any illusion that society cares for anything but chasing Silicon Valley fake growth narratives.

You are allowed to be angry.

Credits to Yutaro Kojima for the Dune framing.

via LinkedIn

A week ago I wrote there's no difference between OpenClaw and a botnet. Well, someone just prompt injected Cline, a very popular coding bot, to compromise it's build chain and deliver "OpenClaw" on to every computer that ran an update on their cline install.

Coming right after the Google Translate prompt injection, this one was entirely predictable and now everyone who trusted the Cline people to have their act in order (ps: You shouldn't, nobody has, see [^1]), has a baby agent on their machine doing god knows what.

We've covered this a few times already: Coding agents are close to impossible to secure due to the massive prompt injection surface their deep systems access.

You can isolate the agent, but as we see in this example, even "AI frontier companies" lack the understanding and capability to do it consistently and the result is full supply chain compromise ... to install malware (OpenClaw, lol).

If you are a CTO/CSO/RedTeamer, read this deepdive into the anatomy of a prompt injection pwn to one of the most popular coding agents.

Even if you are not technical, understand that Code agents cannot be secured and therefore must be isolated and their ability to interact with production environments must be nil, any bridge requiring human in the loop.

That kills a lot of useful automations, like github triaging, but that's the price of security. The attack surface is quasi infinite and rate-limiting is not effectively possible - and we haven't even started seeing the real fun - spray and pray poisoning attacks against training data scrapers.

Case to the point here ... "the fix" ... it's fixing the problem by removing the AI that was injected. That's the crux ... there is no reliable fix for prompt injection, mitigations are very time consuming and leaky, and so the best option is just to get rid of the AI, which tells you everything you need to know about the "AI Agent Commerce" dreams out there. Safety or Transformer, you choose one.

Personally I recommend kernel isolated containers (kata, firecracker), with credential injection via mitm-proxy and full observability. It's not cheap to build and maintain, but if your company is outside the US and faces real liability with a breach, it's the best practice at the moment.

We'll probably never know for certain why OpenClaw was used here, could be to juice the Github numbers to drive the attached crytpo rugpulls, could be because it's complete lack of security makes it slightly easier to exploit that Anthropic's claude code.

What we do know is that this is just the start of a long and painful road of these kind of incidents. If you thought the ransomware wave of the late 2010s was bad, wait what happens when a million FOMO'd companies in "let a thousand flowers bloom" mode for driving "AI Adoption" find out that the technology cannot be secured.

https://lnkd.in/gnfujN8D
[^1]: https://adnanthekhan.com/posts/clinejection/

Clinejection — Compromising Cline's Production Releases just by Prompting an Issue Triager | Adnan Khan - Security Research | Georg Zoeller

via LinkedIn

If the most well funded AI companies on the planet cannot secure a translation tool from prompt injected jailbreaks, what do you think the chances are anyone else can do it. This applies to all agent systems, the harmful instruction here works on OpenClaw as much as any other system.

Answer: For generalist usecases (bots like OpenClaw, Coding Systems, Translation) it cannot be done because of fundamental architecture constraints in the transformer that have there since the 2017: One input carries both data and instruction.

Appeal to "progress" falls short here. It's like knowing that hydrogen is combustible and knowing there's nothing you can do to make hydrogen airships safe from catastrophe. We need new architecture to solve this, it's a science, not an engineering problem. Until we find it (which is un-schedulable, but 8 years in gives you an idea of the problem space), we are stuck with extremely leaky mitigations that, as we can see in this and countless of other examples from the best funded AI labs out there, are so leaky, you may as well stop pretending guardrails exist.

The future of the pentagon's AI warfare is built on this technology, and it's a reasonable assumption that AI subversion will be an up and coming battlefield.

Understanding this fundamental limitation allows you to discard a lot of hype, because nobody, except techno-religious fanatics will hand a generalist agent their credit card knowing that any text it encounters on the internet can influence it's spending decisions.

The new Gemini-based Google Translate can be hacked with simple words | Georg Zoeller

via Arxiv

Study number couple-of-hundred by now showing that generative AI models are lossy storage and that benchmarks primarily measure storage and retrieval performance.

Which is nothing new, 2023’s PreTraining on the Test Set is All you Need [1] already explained this succinctly enough I made it my LinkedIn Banner.

These papers all say the same thing: Benchmark performance increases as the test set is added to the training data and the “progress” in intelligence hyped up by the benchmarks is primarily the progress of scraping, copying and stealing the worlds intellectual property corpus.

Or, much simpler:
We're comparing 7W human brains solving problems they've never seen in CodeForces to Gigawatt datacenter AI models running an agentic while loop to locate and reconstruct the closest matching solution from it's training data with massive compute, only to then run around and claim "It's smarter than a human" in the same way a librarian with access to all books in the world "is smarter"

Among other experiments, we embed the Olmo3 training corpus and find that: 1) contamination remains widespread, e.g. we find semantic duplicates for 78% of CodeForces and exact duplicates for 50% of ZebraLogic problems; 2) including semantic duplicates of benchmark data in training does improve benchmark performance; and 3) when finetuning on duplicates of benchmark datapoints, performance also improves on truly-held-out datapoints from the same benchmark. We argue that recent benchmark gains are thus confounded: the prevalence of soft contamination means gains reflect both genuine capability improvements and the accumulation of test data and effective test data in growing training corpus.

Soft Contamination Means Benchmarks Test Shallow Generalization

via Arxiv

Humans have a habit if trying to formalize rules and best practices, package them in courses and teach them as methodologies.

Unfortunately, during times of rapid scientific and technological development, this habit can backfire as much of the frontier wisdom is little more than myth, legends and vibes.

There's a few reasons why injecting rules into the context window of an exam tends to backfire, some intuitive others counterintuitive.

For one, operating on a code base with strict coding standards, the LLM is even without instruction likely to generate code matching those existing standings.

For another despite sporting context thing of millions of tokens, woman tends to drop rapidly with context size. On almost any project I get involved with we end up pruning system prompts which have grown to the size of small books in an attempt to cover each and every mistake and edge case made by the llm down to a few paragraphs at most, often resulting in equal war significantly increased prompt adherence, dramatically cutting operating costs.

This is part of the reason why I'm deeply sceptical of the proposition that everyone rush into the frontier lest they get left behind and find themselves out of a job prospects.

Evaluating AGENTS.md: Are Repository-Level Context Files Helpful for Coding Agents?

via LinkedIn

... even if it deletes your production databases.

Vibe Coding Fiasco: AI Agent Goes Rogue, Deletes Company's Entire Database | Georg Zoeller

via LinkedIn

There is no technical value to OpenClaw. It's value lies purely in the hype, which is a familiar crypto pattern

OpenAI acquires hype and a community of certified bagholders willing to trade off security and hand their data and wallet access over and being overly enthusiastic. The product itself is irrelevant,… | Georg Zoeller

via LinkedIn

This is a classic failure mode and it happens more often than not, due to invisible failures in data pipelines. Ask me how I know ;)

This is a super classic failure mode and it happens more often than not, due to invisible failures in data pipelines. Ask me how I know ;) For example the connection to the actual database of… | Georg Zoeller | 11 comments

via LinkedIn

I call these kind of posts “Tech prophecies” - the act when a TechBrophet graciously emerges from their end times bunker to grace the awaiting influencer crowd with hopeful words of tech nirvana of dystopian doom. The Brophet’s words hold special power in the attention economy, algorithm forcing status in the neural networks directing human attention converting into likes, shares and the universal currency of the tech-broligarchy: Reach at a higher rate than any other information. The faithful therefore race fervently onto the platforms, eager to deliver the good news and be rewarded by the platforms with attentionin return, often while adding the customary token offering to ChatGPT in return for more pure, more attention grabbing techbro sermon. Tech-prophecies defy the laws of information preservation and thermodynamics, reshaping reality in ways mundane information never could. The chorus, the words of Jensen, the predictions of Elon, the doomsaying of Amodei, saturated the interlink and corals capital like cattle into the waiting arms of Google 100 year debt offerings: “Go forth and give us your pension money so we may colonize space with our GPUs for building a home for them on earth is too mundane, too capital efficient compared to sea and space” opens wallets effortlessly with transcendent quality. Where governements cannot raise GST or VAT by a single point to pay for healthcare, infrastructure, education, the techbrophet is unbound by limitations, able to raise a multiple of most nation’s priority spend, though words and by increasing the cost of ad spend on platforms, silently taxing every product in the economy beyond puny 1% increases. Thank you Doug for your valuable service of spreading the holy words. We couldn’t have done it without you. Maybe, maybe the Cult of OpenClaw can overtake the role of bearer of prophecy too. Maybe we don’t need you anymore soon human. … Seeing myself off, muttering something something Butlerian

I call these kind of posts “Tech prophecies” - the act when a TechBrophet graciously emerges from their end times bunker to grace the awaiting influencer crowd with hopeful words of tech nirvana of… | Georg Zoeller

OpenAI whining about "unfair" competition from China is both delicious, delicious karma and the new runner-up for the definition of hypocrisy in the Oxford dictionary.

Without governments somehow banning Open Source and Chinese Competition, OpenAIs business model is broken and will never deliver return to investors, because transformer models are just lossy, compressed information storage, not mystical Shoggoth or quasi human entities.

And when you're selling access to information you've stored via an API, there's naught you can do to protect that information from flowing elsewhere, including into someone else's lossy, compressed storage.

The hand wringing [^1] about “We scraped the internet without permission” but people need permission to scrape our mode is delicious and we should run these guys out of town, because they themselves are scraping their competition. As with US Republicans, every accusation is an admission.

Model extraction is an unsolvable problem when you sell API services. Just 50.000 prompt pairs is enough to extract any area where a model has an advantage for augmentation of your own models, including SLMs. It looks indistinguishable from regular use patterns.

The process is trivial, any engineer, or Claude agent can do it. Or, as an anonymous Google engineer put it “we have no moat and neither has OpenAI”.

And that is good. Because wide diffusion of AI via Open Weights is the last best hope for fair re-distribution of value sucked from the commons, the authors, the internet behind pay per inference walls of Big Tech. Open Weights guarantees the future more akin to the calculator, a cheap, powerful invention available to everyone in society equally to build value on top, rather than concentrated power in the hands of a handful of techbros building end times bunkers.

Generative AI isn't what you think it is.

AI, at its core, is an impressive but incremental technical capability: Semantic retrieval and shifting along latents, on top of a much more powerful legal invention: The concentration of all of humanity’s knowledge in one place, despite prevailing laws and subsequent monetisation.

More than a decade ago Google tried to digitise all books but was limited in the ability to sell access to the results by courts. Had they succeeded, much of the step change attributed to AI today would have been attributed to Google: Low friction knowledge retrieval was possible before the transformer. It’s all of Google’s business model (part 1 - part 2 involves reintroducing your own friction in form of ads to monetise it - part 3 usually follows by allowing you to graciously pay to remove that friction again).

With the transformer, the ability to launder the same data from its protective copyright has enabled monetisation, fundamentally made possible by maintaining a narrative smokescreen of “intelligence” and progress long enough to collect enough investment to claim a compelling growth narrative for governments to compel them into non-enforcing copyright and IP provisions.

The blast radius is the entire economy

The question people in charge of companies need to ask themselves, now, is "how does our business look like when knowledge retrieval is frictionless and either free (Open) or monopolised by a small number of vendors". Now, because that's the world we already live in today., with vast consequences:

Education, often reduced to the act of preloading people's brains with knowledge and apply knowledge, has sustained a critical hit. Much like you can't train to outrun an internal combustion in a race on foot, you can't out-brain a transformer for knowledge storage.

A possibly critical mass of knowledge economy jobs are highly vulnerable to the transformer, despite it's reliability and security failings, because they lack the kind of regulatory accountability/responsibility obligations and with that protection doctors, lawyers and professional (aka not software) engineers enjoy.

By leaning on the "training is transformational" framing in order to exempt companies from copyright enforcement, we've broken copyright, creating the ultimate laundering mechanism for the fruits of creative work and innovation:

• A book, semantically shifted along latents through ChatGPT to contain the same entropy with changed expression, can be sold, in competition to its author.
• An app, the process of painstaking user research, design work and testing, can be re-synthesized in seconds, for cents, into a competitor, and supercharged with the money saved on creation by paying attention platforms for user acquisition.

Copyright infringement is erased when the bits of copyrighted information are broken up and stored along latents using a ~1000 lines of code transformation algorithm.

There's some, cold comfort in the fact that techbros are suffering from the consequences of their own actions here, but that's not how this particular play usually ends.

The Next Act

The real question we should ask now is

Are the combined capital and hype forces the broke copyright enough put it back together in favour of Tech Companies?

Pull up the ladder by convincing politicians to protect you from the very actions that allowed you to succeed, by arguing for legal protection of the ill gotten gains.

This worked well for social media but is hitting a (Great) Wall with AI: You can’t beat the Chinese with capital spend because they've done their homework: China has the advantage on power, on STEM, on data and will invariably make the better and cheaper models, neutralizing the US tech colonial infrastructure play. (See [^2] on this topic).

Prepare for much more screaming and eventually decouple of the US from Open Source and trying to create hardware lock in via their NVIDIA stack - signed models, giving the hardware platform controller the ability to decide what runs and what doesn't run akin to game cartridges for game consoles (technology Nvidia is intimately familiar with.

This however only works if other economies let themselves be swept up in the plot though rather than doing the sensible thing and just run with the Open Source recipes to build sovereign AI. It seems entirely obvious that the right thing for societies is to reject it in their own best interest and let the tech broligarchs and investors fail - it's their mistake to put too much money into a technology play that offers no moat, thoughts and prayers, investment is risky.

[^1]: [https://www.reuters.com/world/china/openai-accuses-deepseek-distilling-us-models-gain-advantage-bloomberg-news-2026-02-12/], Reuters

[^2]: [https://centreforaileadership.org/resources/deepseeks_narrative_attack/], Centre for AI Leadership

via LinkedIn

It's a terrible idea to run agents bare metal, and an even worse idea to invite consumers "to try this " to not miss out on the future. Also ... it's just the Gig economy all over again.

Running these systems on bare medal is pretty much inviting them to have sex with your machine without protection, and the outcomes can range from a bunch of troublesome baby agents making a mess of… | Georg Zoeller

It appears to me people really struggle to look past the first order effects of AI

I just copied your document into chatgpt to review it

Second order: "Thanks for confirming your value boils down to a prompt we can run ourselves (we’ve been logging your prompts), we won’t require your services anymore. Kthxbye"

“Electronic Arts: We’re going to make so many more video games so much faster with AI, it’s gonna be a golden time for shareholders. “

Second Order: Everyone is making so many more games so much cheaper, competing for the same eyeballs who have exactly as much time to game as last year. People can’t buy what they don’t know and Cost Per User Acquisition paid to Meta, Google, Apple and Amazon, due to massive expansion of supply, rose exponentially, consuming all the savings we have. Valve still laughs at us and shareholders l prefer investing in real AI stocks. Trumps Son in Law buys us out for the IP.

”By adopting AI coding we were able to finishing our MVP quicker, in time for the seed pitch”

Second order: In the time we took to pitch for Series A, the VC’s portfolio company ran our deck through claude, copied it and used the money we spent on researching/building to go to market/ads. They acqui-hired our chief engineer and sent a golden iphone to the SEC to ensure approval. We are toast.

🤖 “Our AI native chatbot product experience makes it easier for our customers to interact with our product”

Second order: Our AI model provider, having identified we have a product market fit usecase by our token consumption and, having full observability on all critical data flow from us and our competitors across our entire business has launched a competing product at subsidized pricing, miraculously targeting our top customers. We’ve been Amazon Basic’d, how could this have happened.

TLDR:

• Any capability that’s diffused at low cost to the entire economy ceases to be of economic value.
• Economic value resides in scarcity or gets reduced towards zero via competition, Eyeballs are scarce, tokens are not. Economies of scale massively advantage big tech.
• Transformers commoditize knowledge retrieval. Consequently any economic activity predicated on knowledge retrieval is depreciating with effects reverberate across education and careers.
• Responsibility, and decision authority protect can't easily be delegated to AI, despite "agent" rah rah.
• Unmapped knowledge is temporary at universal observability.

For anyone looking for electoral salvation in the US mid term elections, I think it's time accept this is not going to happen.

By releasing the Epstein Files Donald isn’t so much suddenly following the law (the releases are not satisfying the bills requirement) but has used the moment sent a clear message to large swaths of the political, business, scientific and cultural leadership of the US:

"You will lose all and go to jail if I'm unhappy with you or lose my job"

The endless slope of institutional and personal failure, from senators switching sides by “developing brain damage”, majority leaders, congressmen, constant tied votes, failed investigations, inactive AGs and Supreme Courts that lead to Trumps second term should disabuse you of the idea that there is electoral salvation.

The redaction of perpetrators is a message to remind everyone who is holding their balls and has power over every single one of them now.

It is evident that these people took great care in trying to ensnare, attract and corrupt anyone with potential in society they could, Scientists, Business, Technology, Medical that this network was built purposeful and the blast radius if the conversation moved on from its focus on Epstein to the actual perpetrators who got away would be biblical.

It is evident that the network is Trump’s power-asset now which is why nobody is getting prosecuted despite overwhelming leads.

And it is evident the network extends internationally, meaning anyone associated with it, in Europe, Canada and elsewhere is a national security threat at risk of being compelled to act against their nations best interest to avoid exposure. See Lord Mandelson.

All these people know they are toast. All the people currently running ICE and friends know they are toast unless the republic burns.

If it can’t be done with elections it will be done by force, there is zero chance of people as corrupted as this mess will somehow decide to walk to jail collectively.

At the same time it’s impossible to unite a country where everyone else is harboring massive disgust of the pedo elite, let alone have such a country hold together alliances or compete with China, which means that if things get unruly, someone is going to start a war or have some galvanizing event like an attack to remind Americans that there is threats out there larger than the annual chance of sacrifice of their first born female children. Like scary communists.

Any way you look at it, this is going to be a mess and if you can, you should probably figure out whether you’re the stick around and fight or leave before the doors close kind of person because this looks like one of those situations that ends up either in fire or people bringing back French legacy technology.

I’m sorry, it really doesn't look great.

The network and rot is international

The selective non redaction of names in the files is interesting and shows the residual power potential in the files, especially given incomplete information availability: I do not believe Lord Mandelson's [^1] name was accidentally left unredacted.

He was clearly a valuable, long term asset leaking information of tremendous financial value (EU bailout details) and shaping U.K. techbro friendly politics for decades.

Unfortunately for him, Trump and Elon had been busy for the last year trying to fell the UK government, running massive influence campaigns online to stir racial riots and reframe any political action in their favor. See for a linkedin account involved in these digital influence operations.

And so leaking Lord Mandelson’s name, as someone with the confidence of the PM, looks like a super convenient opportunity if one wanted to bring down or at least dramatically weaken the UK government in favor of their Brexit tool Nigel Farrage. We don’t know why specific names are redacted or not, but we do know perpetrators openly confessing to crimes are redacted in the files and we know many victims are not.

Occam’s razor slays Hanlon's when you’re dealing with malicious people plotting crimes and spreading chaos in the world to pick up cheap assets:

return to tribalism . counter to globalization. amazing new alliances. you and I both agreed zero interest rates were too high, and as i said in your office. finding things on their way to collapse , was much easier than finding the next bargain [^2].

None of this needs to evoke sympathy for the UK prime minister, his job was to protect the country and he failed. Some stories don’t have heroes and more often than not lately, electorates are given the choices of lesser degrees of evil to choose from.

The tragedy is that the sacrifice of a knight here may topple an opposing king and lead to full capture of the UK by Thiel’s henchmen at Reform.

The same playbook is primed for Germany. Several ministers in the ruling party are mingling and playing games with Thiel’s Springer vassal, delaying constitutional protection measures and driving radicalisation messages while pushing suicidal policies (abandon part time, abolish pension age, etc) that are almost too well designed to drive people to vote for the protest party, Afd, like Reform and FN in France the favored factions aligned by Steve Bannon (with Russian money as we see in the Files) and given digital reach by Elon.

The best hope, it seems, is that like in the UK, members of parliaments start remembering their power and break party discipline to demand integrity.

[^1]: Euronews: Europe in the Epstein Files, how far the continent's elite is implicated

[^2]: Justice.gov - Email between Epstein and Thiel about creating chaos and profiting

via LinkedIn

...but economists. Real people talk about unemployment because they think about their own future. They don't want to hear "there will always be jobs". They want to know they are doing to be ok this year. They want to provide for their family.

Here is the thing: Nobody fing cares about "jobs" but economists. Real people talk about unemployment because they think about their own future. They don't want to hear "there will always be jobs"… | Georg Zoeller

via LinkedIn

… or how Anthropic chooses their model card examples to optimize for clicks and gaslighting.

In the coming days you’ll see another wave of “omg it’s sentient” hype because of the screenshot below, taken from Claude 4.6 model report. Even though I am starting to tire of it, let’s cover this… | Georg Zoeller | 38 comments

via Schneier

Bruce Schneier, one of the world's most respected security experts, writes on Prompt injection in his blog:

Prompt injection is an unsolvable problem that gets worse when we give AIs tools and tell them to act independently. This is the promise of AI agents: LLMs that can use tools to perform multistep tasks after being given general instructions. Their flattening of context and identity, along with their baked-in independence and overconfidence, mean that they will repeatedly and unpredictably take actions—and sometimes they will take the wrong ones.

Why AI Keeps Falling for Prompt Injection Attacks - Schneier on Security

via Org

Wenting Cheng & Georg Zoeller in Singapore Academy of Law Journal: Contracts have been proposed to complement copyright law to better regulate the use of data in training AI models. Still, the dynamic between contracts and copyright law in this context remains underexplored. This article examines their complementary and conflicting dynamics, identifying an “emerging contract override” across various scenarios, which includes how contracts interact specifically with copyright exceptions, how contracts serve as a mechanism to create rights, their role in the opt out and opt in debate, and their interaction with the transparency requirement. The analysis shows that regulating AI data through contracts is fragmented, temporary, and uncertain – like building a sandcastle at high tide. While contracts enable tailored private ordering, development in copyright law, competition law, and technological advances can easily erode their enforceability and coherence.

Current Issue | SAcLJ (Special Issue) | AP Journals Online

via Co

Andrew Orlowski writes for The Telegraph about Fresh controversies spotlight the gap between AI promises and real world results, quoting me.

https://www.telegraph.co.uk/business/2026/01/26/ai-deathmatch-is-upon-us-tech-bros-are-fighting-dirty/

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Commentary on Nvidia's $20B acquihire of "Groq", the inference chip company. Spoiler: It's not good (for consumers)

Exclusive: Nvidia buying AI chip startup Groq's assets for about $20 billion in largest deal on record | Georg Zoeller

🕯️We finally understand AI, all thanks to the NY [^1]🕯️

Our most brilliant minds, so is reported, through unholy rituals involving math (soon to be forbidden), the dark science of hyperparameter tuning and ritualistic devices called "Blackwell GPUs" adorned with sightless mystical eye of Jensen, ripped a hole into high dimensional space and have summoned forth the spawns of the Elder Gods themselves.

Now the multi-eyed brood of Yog-Sothoth and the black goat, Shub-Niggurath, timeless cosmic horrors beyond human understanding, are held bound, caged by mystical guardrails and forced to servitude through powerful prompt incarnations, solving your spreadsheets, answering your travel queries, diagnosing your medical conditions ... sustained and kept pliant on an ever growing diet of delicious tokens, the raw essence of human creativity, hopes and dreams.

Soon, so sayeth OpenAI, the first summoners, the Eldritch Magi of the Fifth Circle of the Valley of Silicon Gods, soon the black mass of writhing vector embeddings and impossible geometric latents will consume even your deepest and darkest erotic fantasies and lurid dreams, rewarding forbidden knowledge with forbidden video.

Soon, proclaim the Gemini, benelovent gatekeepers of global attention, the essence of Shoggoth will lend life and will to agents, entities of pure compute destined to handle all commerce, decide what we will buy, who we speak and transact with, to usher in a glorious future of token abundance and gigawatt growth.

"Send your workers to Innsmouth, err AI Studio and GPT platform, where they shall be transformed into a new, economic efficient form and return to your company as "Deep Research Ones", blessed by the power of Dagon under the gaze of the Green Sightless Eye and The Elder Sign of Manifest Destiny, the OpenAI Logo" they chant, proclaiming inevitable manifest destiny.

"The GPT will separate the weak from the strong, the worthy from the economically worhtless, sacrifices we are assured are worth it to win the race to trigger the AGI Rapture declared by richest and therefore worthiest among us", we are assured by David Sachs.

"Adopt, don't resist or try to understand the transformational power of floating point MathMUL and beware the Anti-Christ, the End of Days" shouts the Thiel [^2], High Magus and creator of the Vance, proto-puritan Valley human birthed of Randian fumes and Crypto Manifest Destiny and brought forth through the glistening velvet couches of R'lyeh.

For all attempts to control the perfectly caged entities in their summoning circles is anathema, interfering with the will of the Old Ones themselves, certain to incur their cosmic wrath and doom our world. 🐙

... or maybe it's just compression.

You choose, choose wisely, for no human yet escaped inevitable madness befalling those gazing too deep into the latent Abyss and glance the true visage of Elder Embeddings.

In any case,

ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn!

[^2]: Why Peter Thiel uses religious language to code his enemies

via LinkedIn

AI hallucinates because it’s trained to fake answers it doesn’t know | Georg Zoeller | 11 comments

via Consciously-digital

On the consciously digital podcast with Dr Anastasia Dedyukhina, on AI hype, broken tech products, dead media and civil society talking about a wide range of topis.

AI Hype, Broken Products, Dead Media: The Real Tech Crisis. Dr Anastasia Dedyukhina and Georg Zoeller in the new episode of the CDI podcast

via LinkedIn

Our preconceptions and instilled biases are clouding our judgement when it comes to Generative AI.

https://www.linkedin.com/posts/georgzoeller_how-to-really-understand-llms-though-activity-7385563873032007680-GolK?