Hello friends: There are so many moving pieces these days, sometimes I get writer’s block from having too many things to write about—if that makes any sense :). So I shot this video about the AI bubble and how I believe it was inflated. Transcript below. Please consider subscribing! Thanks!
The United States is headed towards a $5 trillion iceberg. The iceberg is made of three companies. SpaceXAI, which is Elon Musk’s merger of SpaceX and his failed AI company, XAI, OpenAI, and Anthropic. Combined, they are scheduled to go IPO at a $5 trillion valuation between them. SpaceX somewhere around 2, Anthropic and OpenAI somewhere around 1, 1 and a half, something like that.
So, where in the world did these companies come from, and how in the world do they justify these valuations? Well, they can’t, and they don’t. They’re not businesses. We’re not looking at an industry. We’re looking at science fiction stories. And I want to talk about it from that point of view, from the point of view of storytelling.
Because they’ve pulled this before. They’ve done this before many times. And I understand it pretty well because it’s very related to work that I’ve done in the past. For marketing, for entertainment, for fun. I used to build something called alternate reality games, ARGs, for short. Large interactive experiences, where millions of people would run around and go on scavenger hunts, connect with each other online, do all kinds of things within the context of a story world.
The thing about our stories was they took place in the real world. They took place in the here and now, but just one thing was a little bit different.
Let me give you an example. In 2004, we did an alternate reality game, an ARG, for Microsoft, for Halo, 2 in particular, the video game, Halo 2. And we asked the designers at the time, “Okay, what’s the game about?” And they said, “Well, aliens come to Earth and blow shit up.” And we said, “Okay, what does that sound like?” Sounds like “War of the Worlds.” Right? Sounds like “Martians coming to Earth.”
And what’s the most famous version of telling that story? Orson Welles, in the 1930s, was doing a broadcast of War of the Worlds. And many people turned in, tuned in in the middle. This story’s a little apocryphal, but people tuned in in the middle and suddenly heard the story. And thought, “Oh my god, Martians are coming.”
Why did that happen? That happened because there was a combination of reality and fiction. Where this unbelievable fictitious world entered into reality in a way that was very emotionally compelling, in that case terrifying.
Well, in alternate reality games, we would do the same thing. So, for example, in this game I was describing for Halo, we wanted to tell the same kind of story of aliens coming to Earth and blowing shit up. And to tell that story in a way that was alarming to people but wasn’t going to cause a panic.
So, we decided to deliver the story over payphones. And so, we had an artificial intelligence. There were no artificial intelligences in 2004. But we had an artificial intelligence from the 26th century crash land on a website.
And it was my job as the technical director and one of the puppet masters of this experience to figure out how to make it look like this very basic 2004 website was suddenly infested with an artificial intelligence. And it’s very compelling because I designed it so that it was a very normal looking website that then would start to get strange and kind of be odd and give you strange messages and suddenly start going a little bit crazy.
And it was that mixture. It was that, wow, there’s something different, but it’s in the real world that is very compelling. So, we did this, this story, and millions and millions of people played. And for this went on for six months, nine months really. And it was absolutely exhausting because it was near 24/7 of performance art because the audience was always doing things we didn’t expect.
They would also do things—and this is important. They would always go too far sometimes. They would jump over the line and to try to hack the servers, or finding out who the actors were in our audio or whatever. They went too far.
And so what we did was try to reign them in, try to say, “hey, we know you’re interested, you’re into this story, but it’s just a story, please don’t hack our servers.” We’d have to give them that message.
Well, other experiences that have used the same kinds of ideas have not taken those precautions and have encouraged those behaviors. For example, Pizzagate, QAnon, and these large sort of psychological warfare operations that use propaganda and trauma to make people believe unbelievable shit.
What’s the most compelling thing about something like Pizzagate or QAnon? It’s that it involves real people. It’s not aliens from the 26th century. It’s Hillary. It’s John Podesta. It’s all the evil doers. So this technique, whether we were using it in our games for bringing people into a collective shared storytelling experience or used maliciously for Pizzagate and QAnon and these other kinds of harmful experiences. It’s the same idea. It’s alternate reality.
We used to build alternate reality games because you were playing inside of these worlds. The fascists for lack of a better word are using it to create alternate reality cults.
These are not worlds for people to play in. These are enclosures for people to be trapped in. And that is a different thing altogether.
Nevertheless, the basic storytelling techniques are often very similar. Let me give you an example. In the game that we did for Halo, there was a central character called the operator. And the operator gave out cryptic clues about what it was going to do. It told stories and ways that you had to piece together. It reached out to people who are participating in unusual ways, like calling them on the pay phone on the corner. And those, all of those techniques are still being used.
They were used for Pizzagate and QAnon and they were used in 2024 when Elon Musk and the right wing ran an enormous amount of propaganda on Elon Musk’s platform. Creating these alternate realities, creating these bubbles of lies is in my view the kind of hidden layer of a lot of what we’re seeing right now.
And I think one of the easiest ones to see is the one that I started with, which is the enormous bubble that has been created around AI and chatbots.
Because if you think about it, it’s a real thing. There’s real technology. Large language models are effectively neural networks, which are real fascinating mathematical constructs that help derive patterns out of huge amounts of data. And that’s that that can do great things.
I use chatbots, you know, once or twice a day, I use it as basically a search tool for human information. But it’s not conscious. It’s not going to replace people. Agents are not going to suddenly spring into into consciousness. None of that is real at all. It’s all manufactured.
When Anthropic says, oh, Mythos is too dangerous to release. That’s just bullshit. That was a lie. Was a straight up lie because they didn’t have the computing power to release it yet. Because they want to create the impression that these things are something more than they are.
Every single week we get all “this chatbot blackmailed somebody” or this chatbot you know, suddenly has feelings or whatever. And it always turns out the same way. It’s explained by the data that goes into it. So we’ve got a real technology advancement. It’s not a revolution. I’m sorry. It’s moderately useful. That’s about what you get.
It is not an industry that should be occupying as it currently is 40% of the stock market. 40% percent of the market is concentrated in this one industry. That is historically concentrated more concentrated already than the dot com era.
If we add these five trillion dollars worth of stocks to the market, the percentage is going to be over 50%. Over 50% of the value of American equities will be related to or fully invested in an industry that’s maybe one one hundredth of the value that it purports to have. I mean, 90 something percent of it is air. It’s just air.
And so, we already are in a situation where the fallout from this is going to be, if not catastrophic, disastrous. If we allow this if we just run straight into this iceberg, the music’s going to stop in a lot of ways for a lot of people. Taking that much of a hit when a bubble the size of half the market starts to deflate. It’s going to be very, very ugly.
And my biggest concern, I think, is that that’s not a bad outcome for the people who are helping to push this bubble to enormous size. Those people have a history of inciting conflict and violence and disorder. In order to come and pick up the pieces.
And I’m speaking specifically about Elon Musk, Peter Thiel, and the broligarch class that has taken over so much. Including a massive chunk of the government and if Trump goes, the whole thing.
So, we are in an already precarious if not disastrous situation with a huge quagmire in Iran. A senile, to be charitable, president who is desperate for any approval, especially from the billionaire class. So, he is motivated to keep this going as long and as big as possible.
So this is my warning: That they have been creating an alternate reality fraud. A fraud that has created a completely different world. Where everybody must have more chatbots and chatbots are going to replace doctors and Elon Musk is going to make robots and we’re going to live on Mars and there’s going to be you know, a personal robot in everybody’s kitchen and you’re not going to need to work and all of those good things. They promise.
It’s science fiction.
It’s nonsense designed to get as many people as possible to support them in the destruction of our way of life in favor of their model of the world—authoritarian technocracy, fascism, white supremacy. That’s what it’s about.
So, thanks for listening. Be safe out there and let your friends know that this no joke. We’re already in a seriously bad situation with this alternate reality fraud. And we need to stop digging. Thanks.
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