Climateer Investing

Monday, May 18, 2026

"The limits of VC’s humanoid bet"

From PitchBook, May 15:

Funding for startups in the vertical of robotics has reached record levels this year, but there are doubts as to the use cases for these machines.

Humanoid robots used to live in science fiction. Now they live in VC portfolios, and the money flowing into them is growing quickly.
The idea of robots that look, move and operate like us has captured imaginations for years, dating back to Leonardo da Vinci’s 1495 designs for a mechanical knight. Today’s robots have come a long way: they do backflips, fold laundry, and even hold a conversation.
As humanoids become more of a reality, investment has flooded into the space. More than $5 billion has been invested in humanoid startups this year, according to PitchBook data, surpassing last year’s record total.

With 1 in every 4 dollars invested in robotics going to humanoids, deals in the hundreds of millions have become the norm. China’s Robotera raised more than $200 million just over a week ago, while University of Texas spinout Apptronik pulled in $520 million earlier in the year, tripling its valuation in 12 months.
Behind the buzz, though, questions about use cases, deployment and the path to returns are proving harder to answer than the fundraising rounds might suggest.
“There’s no strong, rational reason [behind current investment levels],” Fady Saad, GP at robotics-focused VC firm Cybernetix Ventures, said. “They’re cool, but there’s a psychological attachment or obsession with them that just isn’t practical.”
So why are checks being written?
A ‘limitless’ market
Beyond the novelty of humanoids, economic factors are also spurring investment, according to Sam Baker, a deep-tech investor at Berlin-based VC firm Planet A.
According to Goldman Sachs research, the cost of manufacturing a unit fell 40% from 2023 to 2024, well ahead of the 15%-20% decline expected. Cheaper components, such as motors and sensors, along with improvements in design and manufacturing processes, have brought costs down to a level an enterprise customer could reasonably expect to pay.
Cheaper humanoids mean more customers and greater penetration, especially when they arrive in homes. Morgan Stanley estimates that a humanoid model could cost as little as $15,000 by 2050, with about 10% of US households having one by then.
Furthermore, most countries face shortages in agricultural, retail and manufacturing workforces. Humanoids could, in theory, fill the gap if they become more accessible.

We’re in a classic hype cycle, but what isn’t overhyped is the fundamentals of the technology

Sam Baker, Planet A

The second driving factor, Baker says, is the economic potential of a robot with no fixed purpose and, in theory, no ceiling on what it can do....

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There you go, it can be anything you want it to be.

AI: "Political Campaigns Have No Idea What’s About to Hit Them"

From the New York Times, April 28:

For better or worse, artificial intelligence is driving a major upheaval in American politics that will alter the substance and the character of campaigns.

A.I. has emerged as a powerful political tool with the potential either to improve the quality of decision-making on Election Day or to do the opposite and subvert the process of deliberation.
Perhaps surprisingly, a number of studies have shown that A.I. chatbots and large language models have stronger persuasive powers than humans.
In “When Large Language Models Are More Persuasive Than Incentivized Humans, and Why,” which was published last May, an international team of 40 researchers wrote:
In our first large-scale experiment, humans vs. L.L.M.s (Claude 3.5 Sonnet) interacted with other humans who were completing an online quiz for a reward, attempting to persuade them toward a given (either correct or incorrect) answer.
Claude was more persuasive than incentivized human persuaders both in truthful and deceptive contexts and it significantly increased accuracy if persuasion was truthful, but decreased it if persuasion was deceptive.
The authors suggested “that these effects may be due to L.L.M.s expressing higher conviction than humans.”
In a separate paper, “Persuading Voters Using Human-Artificial Intelligence Dialogues,” which was published in December, eight researchers studied the persuasive effectiveness of A.I. models through “conversations” with human participants about political candidates. They found “significant and positive treatment effects on candidate preference that are larger than typically observed from traditional video advertisements.”
One of the authors, Adam Berinsky, a political scientist at M.I.T., responded by email to my inquiries:
In preregistered experiments across the 2024 U.S. election, the 2025 Canadian election, the 2025 Polish election and a 2024 Massachusetts ballot measure on psychedelics, dialogues with frontier L.L.M.s meaningfully shifted voter preferences.
The effects ran larger than what we typically see from traditional video ads — roughly three to four points on candidate preference in the U.S., about 10 points in Canada and Poland, and 14 to 22 points on the Massachusetts measure.
Berinsky, however, pointedly put the study’s conclusions in a more cautious context:
Anxiety about A.I. in politics is often anxiety about persuasion itself, displaced onto a new technology. We went through versions of this with television, direct mail, cable news, social media and microtargeting. Each time, the predicted revolution arrived smaller than advertised, because voters are harder to move than observers assume.
Our results show A.I. can shift attitudes more than traditional ads in a controlled conversational setting, which is new. But the jump from “A.I. moves voters in a lab” to “A.I. decides the next election” still has to clear the delivery problem — and nobody has.
I asked two practitioners of the dark arts of politics for their assessment of the influence of A.I. They are not happy campers.
Joe Trippi, who managed Howard Dean’s 2004 presidential campaign and Doug Jones’s successful 2017 bid for an Alabama Senate seat, among others, replied by email to my queries:
As someone who pioneered the use of technology and the internet in politics it’s clear to me that A.I. will be used to manipulate and influence voters and citizens to stoke political division and further erode community and our democracy.
We have placed a Trojan horse (the cellphone) in the palm of everyone’s hand that provides direct access to the minds of millions addicted to bot- and algorithmic- and now A.I.-driven information flow that consultants in both parties, campaigns and foreign actors will use to manipulate and divide in the ends-justify-the-means political culture.
Artificial intelligence, Trippi wrote,
is already invading everything from opposition research to digital ad production in ways that will accelerate and amplify the most powerful negative attacks and pinpoint the delivery of those attacks to voters most susceptible to the argument.
No campaign or party will pass on the power of A.I. to manipulate. Trust, the key to democracy and community and already eroded by social media, bots and algorithms, will now contend with A.I. manipulation of what is even real.
Trippi was unrelenting: “We have empowered a handful to become fabulously wealthy billionaires who build platforms and tools to keep us addicted to hours of doomscrolling through bots, deepfakes and algorithmic-driven choices.”....

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It sounds as if Mr. Trippi is concerned that AI will do what he attempts to do.

But better, faster, cheaper, backwards and in heels.

Recursive Artificial Intelligence: The Coming Acceleration (plus Recursive, the company, raises $650 million)

From the American Enterprise Institute, March 19:

When I wrote about recursive artificial intelligence last September, I described an innovation still in its early stages, powerful in concept, but not fully realized in practice. Six months on, AI has made meaningful strides toward true recursivity. The acceleration has, well, accelerated.

A quick refresher: recursive AI refers to systems that can improve themselves, testing their own outputs, identifying weaknesses, and generating better versions without waiting for human researchers to do the work. The concern was twofold: The systems would be powerful and so fast that communities, individuals, and workers would have little time to adapt.

Here is what has changed since then.

A brief digression into the history of theoretical mathematics helps illustrate how recursive AI is developing in real time. In 1969, Volker Strassen discovered a faster algorithm for matrix multiplication, the core computational operation underlying modern AI systems. His insight reduced the arithmetic steps required: Seven scalar multiplications instead of eight at each recursive step, a seemingly small gain that compounds across billions of calculations. The practical record set by that work went essentially unchallenged for 56 years.

Google DeepMind’s AlphaEvolve, announced in May 2025, finally surpassed it. Rather than relying on flashes of insight from human researchers, AlphaEvolve uses automated evaluators that generate and test thousands of candidate solutions, selecting the best and iteratively improving them. The result: a new algorithm for multiplying 4×4 complex-valued matrices using 48 scalar multiplications, one fewer than Strassen’s long-standing benchmark of 49. That single-digit improvement had eluded mathematicians for more than half a century.

The mechanism AlphaEvolve uses is a more powerful version of something now available to anyone working with AI-assisted code. I recently started using a similar approach in my own workflow automation, and the only word for it is “magical.” You provide the AI with existing code and instruct it to fix and verify the result. The system iterates until it has a working product. This is AlphaEvolve in miniature.

So what happens when the frontier AI labs start applying these self-guided recursive systems to their own research and engineering work? METR, which monitors progress in advanced AI models, has been tracking the answer. Its original March 2025 study found that the duration of tasks AI agents can complete autonomously has roughly doubled every seven months over the prior 6 years.

More recent data suggests that the pace has accelerated: in 2024 and 2025, the doubling time shortened to approximately four months. By late 2025, the most capable models were reliably completing tasks complex enough to require five hours of skilled professional work. This isn’t a speed question but a measure of the difficulty of challenges AI is able to take on. As a consequence, the time between major improvements in model performance is shrinking....

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And May 13 we see, via India's Office Chai:

Recursive Raises $650 Million At $4.65 Billion Valuation To Create Self-Improving AI

Brand-new startups are continuing to raise massive rounds to work on new niches of AI.
Recursive, a stealth-mode AI lab, has emerged from the shadows with one an audacious pitch: build an AI that improves itself — endlessly, and without human intervention. To back that bet, the company has raised $650 million at a $4.65 billion valuation in a round led by GV (Google Ventures) and Greycroft, with participation from AMD Ventures and NVIDIA.
The round is part of a broader surge in mega AI funding that has defined the past two years, as investors pour capital into teams chasing the next frontier of intelligence — beyond scaling laws, beyond human-in-the-loop development.
The Founding Team
Recursive was founded by former team leaders from OpenAI, Google DeepMind, Meta AI, Salesforce AI, and Uber AI. Richard Socher, one of the most-cited researchers in AI history, anchors the founding team. He previously served as Chief Scientist and EVP at Salesforce, where he built and led the company’s entire AI research and product stack. Before Salesforce, he founded MetaMind, which Salesforce acquired. He is widely credited with bringing deep learning into natural language processing and pioneering word vector representations that underpinned today’s large language models.
Tim Rocktäschel, co-founder and research lead, is a professor of AI at University College London and former Director and Principal Scientist at Google DeepMind, where he ran the Open-Endedness research group. His team won the ICML 2024 Best Paper Award for Genie, an interactive world model capable of generating playable environments from a single image.
The co-founders are joined by former OpenAI researchers Jeff Clune, Josh Tobin, and Tim Shi. Clune is a pioneer in evolutionary algorithms and open-ended AI systems; his Darwin Gödel Machine work at Sakana AI demonstrated that AI agents could autonomously rewrite their own code to improve benchmark performance. Tobin built OpenAI’s robotics capabilities and later co-founded Gantry, an ML monitoring startup.
In total, Recursive has over 25 people and is growing fast. The team includes researchers in open-ended algorithms, quality diversity algorithms, AI-generating algorithms, self-improving coding agents, automated red teaming, prompt engineering, world models, vision transformers, and retrieval-augmented generation.
What Makes Recursive Different
Most AI labs today are racing to build bigger, better foundation models — and that race requires armies of human researchers to design experiments, curate data, run evaluations, and decide what to work on next. Recursive’s thesis is that this human bottleneck is the real speed limit on AI progress.
The company’s approach draws a direct parallel to evolution: just as Darwinian processes produced intelligence through an open-ended archive of interestingly different discoveries — building from replicating molecules to sight, language, and science — Recursive wants to replicate this dynamic in software. The system would grow its own archive of innovations, with each discovery enabling the next, in a loop that has no ceiling.
Socher has called this the “third and perhaps final stage of neural networks” — a system that automates evaluation, data selection, training, post-training, and even research direction itself. Where existing labs like OpenAI, Anthropic, and Google DeepMind have explored aspects of automated research, none has organized an entire company around recursive self-improvement as its core commercial thesis....

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If interested see also:

January 28 - So it Begins: "Silicon Valley Wants to Build A.I. That Can Improve A.I. on Its Own"

The headline at TechCrunch was "AI chip startup Ricursive hits $4B valuation two months after launch"
Serious money believes these women are on to something.

May 12 - "AI Is Starting to Build Better AI"

Not there yet but some very smart people think it's close.

"Europe built sovereign clouds to escape US control. Then forgot about the processors"

From The Register, May 16:

Intel ME and AMD PSP: The silicon layer nobody certifies

FEATURE Can digital sovereignty exist on American silicon?

Europe is pouring more than €2 billion into sovereign cloud initiatives designed to reduce exposure to US legal reach. The EU's IPCEI-CIS program funds infrastructure development. France qualifies operators under SecNumCloud, a framework with nearly 1,200 technical requirements promising "immunity from extraterritorial laws."
But most datacenters and qualified cloud operators still rely heavily on Intel or AMD processors. And inside those processors sits a computer beneath the computer: management engines operating at Ring -3, below the operating system, outside the control of host security software, persistent even when the machine appears powered off. Under the US Reforming Intelligence and Securing America Act (RISAA) 2024, hardware manufacturers count as "electronic communications service providers" subject to secret government orders.

Europe's frameworks certify the clouds. They don't assess the silicon.

The computer your OS can't see
That computer beneath the computer has a name. On Intel processors, it is the Management Engine (ME), or more precisely the Converged Security and Management Engine (CSME). On AMD, it is the Platform Security Processor (PSP). Both run at what security researchers call Ring -3, below the operating system, below the hypervisor, in a privilege level the host cannot see or log.
"It's a computer inside your computer," explains John Goodacre, Professor of Computer Architectures and former director of the UK's £200 million Digital Security by Design program. He is clear about what that means in practice. The ME has its own memory, its own clock, and its own network stack, and because it can share the host's MAC and IP addresses, any traffic it generates is indistinguishable from the host's own traffic to the firewall.
The architecture is not theoretical. Embedded in the Platform Controller Hub, the CSME is a separate microcontroller that operates independently of the host, with direct memory, device access, and network connectivity the host operating system cannot monitor. AMD's PSP works the same way.
Intel's Active Management Technology (AMT), the remote management feature the ME enables, exposes at least TCP ports 16992, 16993, 16994, and 16995 on provisioned devices. Goodacre notes that an attack surface exists on unprovisioned hardware too. These ports deliver keyboard-video-mouse redirection, storage redirection, Serial-over-LAN, and power control to administrators managing fleets of devices remotely. The capability has legitimate uses. It also provides a channel that operates at a level below what European sovereignty frameworks can attest.
Microsoft documented in 2017 that the PLATINUM nation state actor used Intel's Serial-over-LAN (SOL) as a covert exfiltration channel. SOL traffic transits the Management Engine and the NIC sideband path, delivered to the ME before the host TCP/IP stack runs. The host firewall and endpoint detection saw nothing, and any security tooling running on the compromised machine itself was equally blind. PLATINUM did not exploit a vulnerability. It exploited a feature, requiring only that AMT be enabled and credentials obtained. In documented cases, those credentials were the factory default: admin, with no password set.
Goodacre catalogues this and related scenarios in a 37-page risk assessment prepared for CISOs evaluating Intel vPro hardware connected to corporate networks. Its conclusion is blunt: connecting an untouched-ME device to corporate resources "exposes the organization to a class of compromise that defeats the host security stack in its entirety."
The ME does not stop when the machine appears to. Users recognize the symptom: a laptop powered off and stored for weeks is found, on next boot, to have a depleted battery. On modern thin and light platforms, what Microsoft documents as Modern Standby means "off" does not correspond to "all subsystems unpowered." The system-on-chip components the Management Engine runs on remain in low-power states, drawing enough to drain a 55 Wh battery over weeks, on the order of 100-200 mW continuous draw.

The implication is documented in Goodacre's risk assessment: "Whether the radio is in a Wake-on-Wireless-LAN listening state is firmware policy. On a device whose firmware has been tampered with during transit through the supply chain, the answer cannot be inferred from the visible power state." A laptop that appears off, in a bag, can associate with a hostile network the user has no knowledge of.
Professor Aurélien Francillon, a security researcher at French engineering school EURECOM, has spent years studying exactly this class of problem. Working with colleagues, he built a fully functional backdoor in hard disk drive firmware [PDF], a proof of concept demonstrating how storage devices could silently exfiltrate data through covert channels. Three months after presenting it at an academic conference, the Snowden disclosures revealed the NSA's ANT catalogue, which documented an identical capability already deployed in the field.
"The NSA were already doing it," Francillon says flatly. "Quite amazing." That background informs his assessment of the ME. "Yes, it can probably be used as a backdoor, like many other things, including BMC [baseboard management controller] and many other firmwares," he says. The question, he argues, is not whether the backdoor exists but whether operational controls make it unreachable in practice....

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Interesting in its own right and also related to the sovereign AI challenge raised by Mistral's head honcho:

FrenchTech: "Mistral AI's CEO says Europe has 2 years to stop becoming America's AI 'vassal state'"

Capital Markets: "Rising US Rates Underpin Greenback"

This is Mr. Chandler's weekend missive posted as one of his Week Ahead dispatches.

His weekday (May 18) post is after the jump.

From Marc to Market:

The US economy appears to be re-accelerating here in Q2 after nearly grinding to a halt in Q1 (0.5% annualized pace). April US CPI and PPI were more elevated than expected. The anticipated average effective Fed funds rate in December rose more than 15 bp in the past week and is up slightly more than 75 bp since the war on Iran began. The Dollar Index rose almost 1.4% last week, its best week since the first week of March.

In addition to the swinging pendulum of market expectations for the Federal Reserve, which has a new chair (and will likely usher in a new era for the central bank), UK political drama that appears likely to bring down Prime Minister Starmer, added to the pressure on sterling and UK stocks and bonds. The market has taken the yen to its lowest level since the end of April's apparent intervention. It will begin the week ahead testing the resolve of Japanese officials. Lastly, Trump-Xi meeting was heralded as a success by both sides. Despite Beijing promises to buy more beans, beef, planes, and energy) from the US, Washington is a dilemma. If it proceeds with the $14 bln arms package to Taiwan, it will risk the wrath of Beijing, but it is shelved, the administration's domestic critics will cry "appeasement".

US

Drivers: There are two main drivers of the Dollar Index now: Changes in US rates and risk-environment. The rolling 60-day correlation of changes in the Dollar Index and two-year yields is near a six-month high a little over 0.50. The correlation with changes in the 10-year yield is slightly higher. Changes in the two and 10-year yields are around 0.90 correlated over the past 60 days, which is the most in three years. Changes in the Dollar Index and the VIX are correlated over the past 60 days by the most since June 2024 (~0.4)9. The Dollar Index is inversely correlated with the S&P 500 itself, and the inversion over the past 60 sessions is the most since January 2023 (~-0.57).

Data: After the recent jobs and inflation data, this week's high-frequency reports are of a secondary importance. Economists pour over the March TIC report and the minutes from the recent FOMC meeting, but the impact on the capital markets may be minimal. May survey data (including the preliminary PMI, the Philadelphia Fed's monthly survey) may pose headline risk. The Atlanta Fed's GDPNow sees the economy tracking 3.7% growth here in Q2 after Q1's 2.0% annual pace.

Prices: With last week's advance, the Dollar Index has recouped a little more than half of what is lost in the pullback from the year's high set on March 31 (~100.65). The next retracement target is in the 99.50 area, which is also the top of an old gap (from the lower opening on April 8). The momentum indicators are constructive, and the five-day moving average crossed back above the 20-day moving average. A move toward 100.00 looks reasonable....

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From Marc Chandler at Bannockburn Global Forex, May 18:

Takaichi Endorses Supplemental Budget, Trump Escalates Rhetoric toward Iran, and Markets Spooked

"UN leads call to prepare ‘for when digital systems fail’"

I see headlines like that and wonder if they know something that I should know.

And then I think "Nah, it's probably nothing."

From the United Nations, May 5:

It can be annoying when the wifi signal is cut, but what about if everything digital we rely on were to crash suddenly – from satellites to life-support systems in hospitals?

That’s the nightmare scenario that the UN is trying to avoid, in a call to all Member States to work together to avoid the cascading impacts of a “digital pandemic”.
The risks to all of us are real and they have already been observed on Earth and in space, including a solar storm that narrowly missed Earth in 2012 that could have knocked out power grids and communications across entire continents.
“The common denominator of these unintentional disruptions is their tendency to cascade with impacts that spread across sectors like finance, like healthcare, transport, energy, and communications. And this can often happen simultaneously,” warned Doreen Bogdan-Martin, head of the International Telecommunication Union, ITU....

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If interested see also "The WEF - Carnegie Endowment Cyber Threats Report" wherein the suggestion is made that the thing to do in anticipation of cyberattacks is merge the major banks, their regulators, and law enforcement into one entity.

And related:

"China’s economy ‘weaker than expected’ in April as Iran war headwinds bite"

From the South China Morning Post, May 18:

China’s retail sales growth fell to just 0.2 per cent in April, while industrial output and fixed-asset investment softened more than forecast

The Chinese economy showed signs of slowing in April, as industrial output, retail sales and fixed-asset investment all missed expectations amid a deepening global energy crisis, the latest data shows.
Retail sales rose by just 0.2 per cent year on year in April, well below the 1.7 per cent growth recorded in March, according to data from the National Bureau of Statistics released on Monday. Economists polled by the Yicai Research Institute had forecast a 2 per cent increase.
China’s industrial output, meanwhile, grew by 4.1 per cent year on year in April, down from 5.7 per cent the previous month and below a 5.63 per cent projection by economists polled by financial data provider Wind.
Fu Linghui, a bureau spokesperson, stressed at a press briefing that the Chinese economy had shown “strong resilience” despite the prolonged Middle East conflict, volatile energy prices and disruptions to global supply chains.
“However, we must also recognise that there are currently many external uncertainties, and the cost pressures on enterprises have increased, with some enterprises still facing difficulties,” he added....

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Also at the SCMP:

Forget cellular data: China’s telecoms giants are selling AI token plans
China Telecom and China Unicom’s Shanghai branch are among the latest telecommunications carriers to offer token-based packages to consumers

"G7 finance chiefs seek to tackle imbalances in wake of bond selloff"

Following on May 17's "G7 long bond stress intensifies".

From Reuters, May 17/18:

Finance ministers and central bankers to discuss inflation, volatility
France puts deep-seated global economic imbalances on the agenda
Lescure says G7 offers opportunity for frank dialogue
Meeting follows US-China summit that yielded few economic breakthroughs

G7 finance ministers met in Paris on Monday, looking to find common ground on tackling economic tensions and global imbalances in the wake of a bond market selloff triggered by concern ‌over inflation risks from the Iran war.

Ministers are set to discuss the economic fallout from the conflict and volatility on global bond markets, which are of particular concern to Japan. Bonds from Tokyo to New York extended losses on Monday, with investors betting on central bank rate hikes over worries that rising energy prices could stoke inflation.
Asked if bond markets were collapsing, French Finance Minister Roland Lescure said "they’re undergoing a correction - I wouldn't say they’re collapsing".
"We are no longer in a period where public debt is not a subject," he told reporters as he arrived at the meeting.

DIVISIONS IN G7 SET STAGE FOR TRICKY MEETING

The meeting, which will also be attended by representatives from ⁠G7 central banks, will tackle how countries can co-ordinate their response to shocks such as inflation through temporary, targeted and reversible measures, the French finance ministry said.

Asked on arrival if she was worried by the bond selloff, European Central Bank head Christine Lagarde told reporters: "I always worry, that's my job.”

The G7 finance ministers will try to find common ground on tackling global economic tensions and coordinating critical raw material supplies. But divisions within the G7 complicate efforts to project unity as ministers prepare for a June 15-17 leaders summit in the spa town of Evian.

At the core of the Paris agenda will be what Lescure described prior to the meeting as deep-seated global economic imbalances that are fuelling trade friction and risk a turbulent unwinding in financial markets.

"The way the global economy has been developing for the past 10 years or so is clearly unsustainable," he said, pointing to a pattern in which China under-consumes, the United States over-consumes and Europe under-invests....

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Sunday, May 17, 2026

Updated - "WHO declares global health emergency over Ebola outbreak in Congo and Uganda"

UPDATE: In the cat bond recitation after the jump I implied that there were bonds extant. I forgot that because of the awful performance of the pandemic bonds and their administration the World Bank canceled the planned second issuance of bonds. My bad. Regret the error. Rest is fine, etc.

Following on May 16's "Democratic Republic of Congo declares Ebola outbreak; 65 people killed".

From the Associated Press, May 17:

WHO declares global health emergency over Ebola outbreak in Congo and Uganda

The World Health Organization declared the Ebola disease outbreak caused by a rare virus in Congo and neighboring Uganda a public health emergency of international concern on Sunday, after more than 300 suspected cases and 88 deaths.
WHO said the outbreak doesn’t meet the criteria of a pandemic emergency like COVID-19, and advised against the closure of international borders.
WHO said on X that a laboratory-confirmed case has also been reported in Congo’s capital, Kinshasa, which is about 1,000 kilometers (620 miles) from the outbreak’s epicenter in the eastern province of Ituri, suggesting a possible wider spread. It said the patient had visited Ituri and that other suspected cases have also been reported in North Kivu province, which is one of Congo’s most populous and borders Ituri.
On Sunday, the rebel government of Goma, eastern Congo’s largest city, said in a statement that the first confirmed case of Ebola was detected in the city. The infected person traveled from Ituri province and was currently under isolation, the statement said. Goma was the site of a rapid rebel offensive in early 2025, and the conflict between the Congolese armed forces and the Rwanda-backed M23 rebel paramilitary group has displaced hundreds of thousands....

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Now up to 88 deaths reported and it's crossed a border. That may be close to a parametric trigger for a cat bond payout.

Of course, if 2018/2019 is any example, the insurers are very reluctant to disburse the money.

November 2018 - Congo's Ebola Crisis May Trigger World Bank's Catastrophe Bond
December 2018 - Catastrophe Bonds: "Ebola deaths pass pandemic cat bond trigger, but no payout till it spreads"
February 2019 - DR Congo Ebola Cases Pass 800; Deaths Over 500; No Cat Bond Trigger Yet
June 2019 - UPDATED—Insurance: Ebola Crosses Border to Uganda, Should Trigger Cat Bond Payout
We've been following the World Bank's Pandemic Emergency Facility for the last couple years and have pointed out the $320 million July 2017 Cat bond issue has two triggers: 1) a minimum 250 victims and 2) the crossing of an international border.

The current epidemic in DR Congo passed the victim threshold when the World Health Organisation reported 296 deaths in December 2018 (current counts over 2000 cases, over 1300 deaths....
July 2019 - WHO Declares Ebola a GLOBAL Health Emergency
February 2020 - World Bank Pandemic Catastrophe Bond Under Pressure As Coronavirus Spreads

I have become convinced these things were designed to NOT pay.
As noted previously:
Reinsurance: "No coronavirus price response from World Bank’s pandemic cat bond yet"

We saw with Ebola that, even after both triggers—1) a minimum 250 victims and 2) the crossing of an international border—were reached, the World Bank's Pandemic Emergency Facility was very reluctant to declare the payout, eliciting some snark from yours truly:

"And if the cross-border contagion is reported on a day ending in a 'Y' all contracts will be null-and-void and coverage denied."

Related June 2025:

"Hedge fund strategy built on catastrophes taps a hot new trend"
Parametrics can result is some odd-looking payouts and are susceptible to gaming by those offering the product. More after the jump...

FrenchTech: "Mistral AI's CEO says Europe has 2 years to stop becoming America's AI 'vassal state'"

At the rate AI capability is accelerating, being behind by only eighteen months means you are behind forever.

Not even close to kidding on that.

From Business Insider, May 16:

Mistral CEO said Europe has 2 years to avoid dependence on US AI infrastructure giants.
Arthur Mensch warned AI dominance will hinge on control of chips, energy, and compute capacity.
Europe risks becoming an AI "vassal state," Mensch told French lawmakers.

Two years.
That's the narrow window Europe has to build its own artificial intelligence infrastructure before becoming permanently dependent on American tech giants, according to Arthur Mensch, the CEO of French AI startup Mistral.
"It will be decided in the next two years," Mensch said during a Tuesday hearing on digital sovereignty and AI at France's National Assembly, translated by Business Insider.
The 33-year-old cofounder of Mistral — one of Europe's best-funded AI startups and a challenger to OpenAI — said that the continent risks losing control over not just AI models, but the energy and computing infrastructure powering them.
"Once supply is monopolized by American players, suddenly we no longer have supply and we can no longer transform electrons into tokens," Mensch said, referring to the process of converting computing power into AI-generated output.
He even said that Europe could eventually become "a vassal state" if it fails to develop its own AI industry and continues importing digital services from the US.
Europe's sovereignty push

Mensch has repeatedly touted sovereignty and Europe's independence from American AI companies as central to Mistral's open-source strategy, saying recently that governments increasingly want AI systems they can control independently of US tech giants.
The Paris-based startup has continued leaning into that message in recent announcements, including a partnership with Groupe Caisse des Dépôts, a state-backed French public investment institution, focused on strengthening Europe's "digital sovereignty" through generative AI and GPU computing infrastructure.
On Tuesday, Mensch warned that the AI race is increasingly a battle over access to energy, chips, and data center capacity.
US tech companies are already moving aggressively to secure those resources, he said, adding that Europe risks falling behind permanently if it moves too slowly.

He's talking his book of course, he wants some government help but he's also talking truth.

And trying to do something about it. Reuters, March 29:

France's Mistral raises $830 million in debt for AI data centre build-up

You don't want to end every phone call with Nvidia's Jensen Huang by saying "Yes, my Liege, as you wish my Liege."

"People Are Altering Their Thinking To Think How They Think That AI Thinks"

From Forbes, I think.

In today’s column, I examine a newly emerging trend involving people opting to change how they think by emulating the way that AI thinks.

Actually, for clarification, it is a misnomer to say that AI can “think” – this is an anthropomorphism of what AI is computationally and mathematically doing. In any case, many people believe or seem to think that AI thinks, so I am going to carry forward that premise in this discussion (please realize that the premise is not strictly valid).
A further complication is that there are those people who comprehend the overall computational and mathematical processes underlying generative AI and large language models (LLMs), while there are other people who don’t have the faintest clue of what is happening under the hood. Thus, of those trying to emulate the way that AI thinks, there are ones that aim to do as AI currently is built to do, and there is a second segment that uses whatever wild mental contrivance they think of when it comes to how contemporary AI actually functions.
All told, the idea simply stated is that there are people who somewhat admire or respect the way that generative AI and LLMs get things done, and they want to be the same. They desire to think like AI. One motivation is that this might improve their existing thinking processes. Another is that it would simply be cool to emulate AI. Lots of reasons exist.
Does mentally trying to emulate modern-era AI make any sense, or is it a loony proposition?
Let’s talk about it....

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That headline brings to mind a scene from the television show Friends:

Phoebe: They don't know we know they know we know. And Joey, you can't say anything.

Joey: Couldn't if I wanted to.

—The One Where Everybody Finds Out - IMDB

Chilling warning from Nobel physicist as date is set for humanity's final destruction

Bummer kids.

Buy short-dated paper.

From The Daily Mail, April 20:

The winner of the Nobel Prize in Physics has issued a stark warning to humanity, saying it could face an existential catastrophe within roughly 35 years.

David Gross, who shared the 2004 Nobel Prize in Physics, warned that 'due to the danger of nuclear war,' humankind may have just a little more than three decades left.
'Even after the Cold War ended, when we had strategic arms control treaties, all of which have disappeared, there were estimates that there was a one percent chance of nuclear war every year,' he told Live Science.
'I feel it's not a rigorous estimate that the chances are more likely two percent. So that's a one-in-50 chance every year.
'The expected lifetime, in the case of two percent per year, is about 35 years.'
The calculation is based on equations similar to those used to estimate the half-life of radioactive materials, which model the probability of an event occurring over time.
'Things have gotten so much worse in the last 30 years, as you can see every time you read the newspaper,' Gross added, pointing to renewed nuclear threats, the war in Europe, escalating tensions involving Iran and recent near-war conditions between India and Pakistan.
Gross won the Nobel Prize for discovering 'asymptotic freedom,' the idea that the strong nuclear force holding atoms together weakens as quarks, tiny subatomic particles, move closer together, much like a rubber band that tightens only when pulled apart.
In the interview with Live Science, Gross also highlighted that there have been no major nuclear arms-control treaties signed in the past 10 years.
'There are now nine nuclear powers. Even three is infinitely more complicated than two,' he said.
The last surviving US-Russia nuclear treaty expired on February 5, 2026.
The New Strategic Arms Reduction Treaty (New START), signed in 2010, is due to end on February 5. It marks the eighth agreement between the two nations since the 1963 treaty that banned nuclear tests in the atmosphere, outer space and underwater.
Gross also pointed to the rise of AI, which adds more risks to humanity's existence.
'The agreements, the norms between countries, are all falling apart,' he said.
'Weapons are getting crazier. Automation, and perhaps even AI, will be in control of those instruments pretty soon....

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The LiveScience article is headlined "'The chances of you living 50 years are very small': Theoretical physicist explains why humanity likely won't survive to see all the forces unified" so I went with the more reserved Daily Mail.

"Lotus is the latest automaker to walk back its all-electric ambitions"

From Yahoo Finance, May 14:

Lotus 'first-mover advantage' brings Chinese-made cars to Canada; hybrids, V8 supercar coming, CFO says
English niche automaker Lotus, owned by China's Geely for nearly 10 years, is changing things up with its Focus 2030 game plan, nixing its all-EV future for one with 'mixed powertrains.'

Lotus is the latest automaker to walk back its all-electric ambitions, a move that is typically a painful setback. But the niche British automaker may have received a boost from a new trade deal.

Lotus, founded in 1952 in England as a small sports car maker and owned by China’s Geely (0175.HK) since 2017, announced a strategic reset that it calls Focus 2030. Lotus will shift from an all-EV future to one focused on a “mixed powertrain lineup” featuring hybrid-powered gas cars and EVs.

The announcement came alongside the news that Geely had shipped 18 Lotus Eletre electric SUVs to Canada, becoming the first automaker to export China-made EVs to that market under a new trans-Pacific trade deal.
Lotus spent much of the past four years building out a full EV portfolio — the Eletre SUV, Emeya GT sedan, and $2 million-plus Evija hypercar — and positioning itself as a high-performance electric brand. Its current gas-powered sports car, the well-regarded Emira, would eventually be phased out.
But uneven demand for expensive EVs forced a new plan. Focus 2030 keeps all current vehicles in the lineup, adds new powertrains to those cars, and introduces new vehicles, aiming for a 60-40 split in favor of plug-in hybrids over pure electrics.

“It’s just a strategic transition. It’s a reflection of the market demand,” Lotus CFO Daxue Wang said in an interview with Yahoo Finance, adding that eventually he sees “full electric mobility” coming, but didn’t say when that would be....

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"Zen and the Art of Persuasive Writing"

From Judge David D. Weinzweig, Arizona Court of Appeals at his personal Xitter account, (https://x.com/Zenpersuasion) via Thread Reader:

I’m an appellate court judge.

I’ve read thousands of briefs.

Here’s what no one told you about persuasion and how to win. Thread.
— Zen and the Art of Persuasive Writing (@Zenpersuasion) May 6, 2026

Continues:

I’m an appellate court judge.

I’ve read thousands of briefs.

Here’s what no one told you about persuasion and how to win. Thread.

Judges check page length before reading a word.

• Long brief? We read faster and with less attention.
• Short brief? We slow down and pay closer attention.

Brevity signals confidence. Most lawyers have it backwards.

Adverbs sometimes destroy the arguments they’re meant to strengthen and protect. I call them badverbs.

1. Intensifier adverbs: Used to pump up weak arguments (“Clearly,” “Obviously,” “Outrageously”).
2. Hedge adverbs: Used to cushion shaky arguments (“Arguably,” “Apparently,” “Fairly strongly”).

Researchers studied U.S. Supreme Court briefs and found something striking: the more intensifiers a brief used, the more often the party lost. Example below.

Appellate judges do it too — but for a different reason. We reach for them in dissents, when the issue is a closer call.
***
For an example of hedge badverbs, we pull from the news.

Sam Bankman-Fried, facing federal fraud charges, wrote 250 pages defending his character. On honesty he wrote:

“As a general matter, I don’t lie. It’s something that I believe fairly strongly in.”

Fairly strongly. One adverb draining the life from another. All credibility gone.

He was trying to sound honest, but his words scream guilty.

Hedge badverbs don’t soften an argument. They kill it.

Kill zombie nouns. They carry tail markings and shackle verbs into noun forms. Examples: -tion, -ance, -ence.

• “Conducted an investigation” → Investigated
• “Made a decision” → Decided
• “Provided a justification” → Justified

Zombie nouns add weight without adding value. Find them. Kill them.
Your reader is not in the room when you write.

She can’t raise her hand, ask a question or stop you mid-sentence to say she’s lost. By the time she reads your brief, you’re gone.

Before you write a single sentence, ask:

“What does she need to know, and when does she need to know it?”

The best briefs answer questions before the reader knows to ask them....^...

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Trendspotting: "Former Dom Perignon head winemaker turns to sake"

Wut?

From Nikkei Asia, May 10:

Veteran champagne producer experiments to broaden the Japanese drink's global appeal

Each spring, when the snow that blankets the surrounding fields has melted and the chill in the air begins to soften, Richard Geoffroy, longtime chef de cave (head winemaker) of Dom Perignon, the prestige French champagne house, ensconces himself in a spacious, high-ceilinged room with wide views toward the village below.
Facing a long row of green bottles lined up along a wooden counter, Geoffroy spends hours inhaling their aromas, tasting and blending their contents. But Geoffroy is not in the Champagne region of France. He is in Toyama prefecture, northwestern Japan, where the former master blender of champagne is now making sake.
After 28 years as chef de cave at Dom Perignon, Geoffroy left the company in 2018 to launch a new mission: working with Japanese experts to create a completely different style of premium sake that can be enjoyed not only with Japanese food, but with a wide range of cuisines.
"We are on a mission to contribute to a global recognition of sake: versatile, universal, on a par with the greatest beverages on this planet," Geoffroy says, adding that while he has deep respect for traditional methods of making sake, an alcoholic beverage made from fermented rice, there is "latitude" for creativity. "There is room for experimentation," he says.
For centuries, almost all sake was consumed in Japan. Even though it has gained wider appreciation abroad in recent years, most sake is still consumed domestically, usually paired with Japanese food. Geoffroy believes it has the potential to move beyond that association and be enjoyed with a much wider variety of cuisines....

....MUCH, MUCH MORE, these people are serious.

"G7 long bond stress intensifies"

It is a worldwide phenomena but here the focus is the G7:

From Reuters, May 12/13:

The relentless rise in long-term government borrowing costs shows no sign of abating, and the list of aggravators is growing by the day. If you've been in thrall to gravity-defying stock markets this year, look no further to see where stress is building in world markets.

Debt, oil, inflation and interest-rate risks are combining with domestic political and geopolitical uncertainty, and with ebbing official and private-sector demand for long bonds, to push borrowing costsin [sic] the Group of Seven (G7) advanced economies on aggregate to the highest in more ‌than 20 years.
The implied yield on buckets of G7 government debt with maturities of 10 years or more has risen above 4.6% this week for the first time since 2004, according to ICE Bank of America indexes. And this is just the latest installment in a post-pandemic storm that ended decades of ever-cheaper government borrowing costs, with headwinds seemingly growing stronger.

In dollar terms, the Bloomberg long-term G7 bond investment index has now almost halved in price from its record peak 10 years ago, and it's still falling.

As 30-year U.S. Treasury borrowing costs topped 5% again this week and stalked their highest in almost two decades, Britain's 30-year gilt yields hit their highest since the 1990s, and Japan's equivalents are once again on the cusp of record highs....

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"Dwindling US Support Isn’t Ukraine’s Biggest Problem—Poland Is"

What Poland did by taking-in the Ukrainian refugees immediately following Russia's invasion was one of the great humanitarian stories of the century. And they did it despite covid and hostility from Brussels and the risk of raising their profile on the Russian's radar.

May 8, 2022
Polish President: There will be no border between our countries — Poland and Ukraine.

I'm pretty sure he's speaking metaphorically.
At least I think he's speaking metaphorically.
God, I hope he's speaking metaphorically.
The quote is via the Office of Poland's President, Andrzej Duda from his speech last week:
President's speech marking the central celebrations of the National Day of the Third of May
It's down toward the end of the oration, where he talks about getting the Commonwealth back together (kidding)....

Here are a few other posts from 2022—there are many more, we were attempting tp game-out the social and thus political, future (ironically, September 1 is an historic date in Polish history, remembered for an earlier attack):

September 1, 2022
"Poland 'Will Not Get EU Recovery Funds', Warns Top EU Parliament Politician In Latest Attack"

Back in April I mentioned:
"Poland raises stakes on Putin as Draghi goes to Washington"

For the sake of the Polish people I sure hope their leaders understand what they are doing.

Being a stalking horse out in front of the U.S. and NATO and especially the EU, is a very dangerous position. And in addition, they've accepted something on the order of three million Ukrainians who crossed the border, an extraordinary humanitarian act on a national scale, but one that can't go on forever. So here's wishing the Poles the best....

Don't never, ever trust the Eurocrats. They are slime.

From ReMix, August 31:

Left-wing Belgian MEP Guy Verhofstadt posted on social media that Poland will not receive EU funds no matter how much it contributes to Ukraine war aid
No matter how much Poland contributes to Ukraine war aid, the country will not receive any European Union recovery funds, said Guy Verhofstadt, a Belgian politician and leader of the Group of the Alliance of Liberals and Democrats for Europe (ALDE Group) in the European Parliament....

November 30, 2022
U.S. Army Mad Scientist Laboratory: "The Pivotal Role of Small and Middle Powers in Conflict: Poland and the War in Ukraine"

....To date, Poland has accepted the plurality of Ukrainians fleeing the conflict in their homeland. As of 31 March 2022, more than 2.3 million out of 4 million Ukrainian refugees had fled to Poland. These numbers have exceeded even United Nations High Commissioner for Refugees analysts’ worst-case-scenario estimates. Of the millions who have fled (even including those who have not settled in Poland), the majority have passed through Polish territory before continuing onward.

Meanwhile, the lion’s share of NATO-provided military equipment flowing in the opposite direction has passed through or been provided by Poland prior to its final destination in Ukraine. Poland even expressed willingness to donate its 28 MiG-29 fighters to Ukraine’s cause.

While remarkable, Poland’s outsized role is in some sense a natural consequence of its structural connections to Ukraine. The Frederick S. Pardee Center for International Futures’ Formal Bilateral Influence Capacity Index shows Poland’s importance in Ukraine’s network of diplomatic, economic, and security relationships. According to our most recent data prior to the further Russian invasion, Poland had the single most influence capacity in Ukraine, outpacing even Russia, China, and the United States.....

Now, four years after the invasion, Chicago political theorist and tactician Saul Alinsky comes to mind: In politics, whatever drags on becomes a drag.

From Newsweek, May 15:

Four years after Russia’s full-scale invasion of Ukraine, Western interest in supporting the Ukrainian war effort is fading. News from the front line now rarely reaches Western headlines, and military aid, especially from the U.S., is diminishing. U.S. military help to Ukraine fell by 99 percent in 2025, compared with the annual average for 2022-2024, according to the Kiel Institute’s Ukraine Support Tracker.
Yet recent months have seen a far more dangerous threat emerge for Kyiv–and one closer to home. Poland, Ukraine’s neighbor, was previously a stalwart supporter of the fight against Russia–partly due to its historical suffering, like Ukraine, under Russian domination. But as a result of a new right-wing president, unresolved wartime tensions, an economic downturn, and Russian disinformation, Polish aid for Ukraine is rapidly waning.
It comes at a disastrous time. With Vladimir Putin’s announcement on May 9 that the war with Ukraine may be "coming to an end," war fatigue—especially by Ukraine’s neighbors—would lower their bargaining power at the negotiation table. As Poland has so far been a link between Kyiv and the West, this fraying of relations might lead to issues with future plans for defense in Ukraine, as well as its relation to the EU and NATO.
In the last few months, social and economic tensions between the two countries have already had an impact on security and solidarity. Poland’s infrastructure is vital for the supplies of military and humanitarian aid for Ukraine. The country is the route for 90 percent of military equipment for Ukraine, and is home to NATO bases and centers, as well as complexes in the east, near the border with Ukraine, and in the northern port, Gdynia.
Yet in 2024, friction over the cheap price of Ukrainian grain sent to the EU market, and the resultant stockpiling of grain in Poland, led to Polish farmers protesting around 180 locations across Poland, blocking roads and crossings into Ukraine. This had the effect of delaying the passage of some military support, including night-vision systems, pickup trucks, and drones. These tensions also prompted Russian social media accounts to spread disinformation about the protests to sow divisions between Poland and Ukraine. In June last year, IBRiS, a Polish research agency, stated that 46 percent of Poles support ending or limiting military aid to Ukraine.
At the negotiating table, the effects of these Polish-Ukrainian tensions might lead to more potential for Russian demands to be enforced, particularly over the occupation of Ukrainian land, given weakened European support would prevent Ukraine from being able to completely protect its territory. This would also have an impact on the defense capacity of NATO and the EU’s eastern flank. If tensions with Poland remain, Ukrainian dependencies on NATO and EU defense might also be more limited, potentially leading to a lack of security guarantees in order to prevent further Russian aggression.
Ukrainian hopes to join the EU and NATO would also come under pressure. In 2025, IBRiS also found that only 35 percent of Poles now felt their country should support Ukraine in its aim to join the EU—down from 85 percent in 2022.
Many cite historical tensions with Poland and Ukraine sharing a complex wartime history. In 1943, the Ukrainian Insurgent Army murdered between 50,000 and 100,000 Poles in Volhynia, now in western Ukraine, a region which had previously been part of Poland, and was at that time occupied by Germany. The massacres were likely in response to Polish repression of Ukrainians in the region in the interwar period, as well as Ukrainian nationalist efforts to form a Ukrainian state.
While Ukraine has recently allowed Poles to exhume mass graves in the region–which was historically banned by the country– tensions remain. Poland suggests Ukraine needs to first recognize the Volhynia act as a genocide before joining the EU.
Recently, Poland has also limited support for Ukrainian refugees. In 2022, the Polish government brought in waves of assistance and protection, permitting the vast number of Ukrainian refugees who fled their country in the wake of invasion and settled across the border to stay for over a year, and gain a resident permit for three years....

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We tried to capture some of the factors highlighted above in 2024's "Why many Poles are not as supportive of Ukraine’s war effort as their leaders in Warsaw".

And like the Syrians in Germany, the Ukrainians have no intention of going back home, refuge from the war was cover for economic migration. Some earlier posts on that aspect of what was going on:

"The wicked weaponization of Ukrainian refugees "
"How you gonna keep 'em down on the farm after they've seen Wroclaw?"

"The demographic implosion of Ukraine: Women fleeing Ukraine and finding new partners while men find death at the front"

It may be as serious a demographic situation as that which faced Britain after World War I.
By 1917 - 1918 it was becoming apparent that the death toll of the war was skewing the female/male ratio of young adults. In 2007 the Daily Mail did a book review headlined "Condemned to be virgins: The two million women robbed by the war" which was of course hyperbole, those girls and young women were having sex but the point of the book being reviewed was that, for good or bad, for bettor or worse, those girls became women who had a very different set of life options open to them than the generation that preceded theirs.
And of course the same hard reality was being experienced in Germany and Russia and France and the rest of the countries that lost their young men in their hundreds of thousands and millions.
Demography is very, very hard reality....

Which means the tensions are not going to abate.

Wroclaw is a lovely old city. President Zelensky has a tough sell trying to get military-age young men to come back:

Saturday, May 16, 2026

"The strange Japanese companies minting money from AI"

From The Economist, May 14:

What the creator of MSG and the world’s biggest toilet-maker have in common

Ajinomoto has spent well over a century supplying monosodium glutamate (MSG), a chemical that gives food an umami kick. Now another of the Japanese seasoning giant’s products is whetting investors’ appetites. Ajinomoto Build-up Film (ABF) is a material used to insulate artificial-intelligence processors from circuit boards. It was originally made from by-products of MSG manufacturing. Ajinomoto controls more than 95% of the market. Booming demand for AI chips has made the film scarce, pushing Ajinomoto’s share price up by 65% since the start of the year, around three times the gain in Japan’s benchmark Nikkei index.
Toto, another century-old Japanese firm, has lately enjoyed an equally improbable flush of prosperity. Best known as the world’s largest toilet-maker, it has found a profitable seat in the semiconductor supply chain. The firm is a leading producer of electrostatic chucks: ceramic plates that hold silicon wafers firmly in place while memory chips are etched. Toto’s operating profit from advanced ceramics now accounts for more than half its total.
The AI frenzy has produced obvious winners in semiconductors: American chip designers, South Korean memory-makers, Taiwanese foundries. Japan has its equivalents, with giants such as Tokyo Electron and Advantest that make the sophisticated equipment used to fabricate and test chips.
But like Ajinomoto and Toto, many of the country’s AI winners are in less flashy trades. Hoya, a health-care company that makes spectacles and contact lenses, is a leading supplier of photomask blanks: transparent plates coated with light-sensitive material that lithography tools use to etch chip designs onto silicon wafers. Sakura, a stationery brand, has adapted technology once used for coloured pencils to spot defects in chip-manufacturing processes. Nitto Boseki (or Nittobo), which began life as a textile company in 1923, is today the sole supplier of “T-glass,” an ultra-thin glass fibre essential for packaging AI chips.
Two factors explain this eclectic industrial cast. The first is history. In the 1980s Japan was a semiconductor superpower, accounting for more than half of global chip production. Six of the world’s ten biggest chip firms in 1989 were Japanese. Those champions created demand for local suppliers of all sorts. The country’s firms still dominate several niches in the supply chain, particularly for materials and tools.
The second factor is culture. David Dai of Bernstein, a broker, argues that Japanese companies keep developing technology even when demand is not yet obvious, and rarely abandon it. That lets them deepen their knowledge over decades. When the opportunity finally appears, they are ready, armed with better technology and more credibility than newer rivals. Ajinomoto began work on ABF in the 1970s, as it looked for ways to apply the chemistry behind MSG elsewhere. Only in 1999 was the material first adopted by a major chipmaker....

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"Cut Off: Soon, access to frontier AI will be scarce and selective"

That would lead to rebellion among the dispossessed. I think. Maybe not. Am I giving too much credit to the populace?

From Anton Leicht's Threading the Needle substack, May 13:

There’s a common mantra in the outskirts of AI policy thought: driven by market pressures and overheated capital markets, AI tokens will soon be abundant—and the future belongs to those who can use them best. The further you get away from San Francisco, the louder this mantra grows. It reaches a fever pitch in the peripheries, the many middle powers of the world still caught up in a plan to navigate the AI revolution on the basis of merely good-enough models. That view requires important AI capabilities to be widely accessible: defenders have access to models before attackers do, firms in all domains compete based on access to the same AI capabilities.
Recent events have thrown that view for a loop, and it now seems clear that access to frontier AI will soon be limited by economic and security constraints. In early April, Anthropic announced it had developed Mythos, a leading cybersecurity model, and that it would only make its considerable ability to patch extant vulnerabilities available to a select few companies. Cybersecurity start-ups in the Mission District, systems integrators on the Eastern Seaboard and allied capitals on the Atlantic and Pacific all had a similar experience: scrolling down the page to see the list of privileged partners only to find a limited selection of U.S.-based corporations.
Perhaps you were hopeful that OpenAI was going to stick to its preferred method of rollout—that it would release gpt-5.5-cyber, a model reportedly similar to Mythos in capabilities, more broadly. And yet it did not: in their Daybreak initiative, OpenAI too committed to a limited release, dispelling hopes that this was a fluke or ‘doomer’ marketing. Even worse: while it’s not quite clear to anyone—including the U.S. government—what exactly the U.S. government will do about all this, by all reports, it’s at least planning to do something at some point. And while it’s easy to dismiss this as a confluence of current events, the Mythos moment actually reveals structural trends that have been ramping up for a while.
Mythos and Reality
Three trends—compute, security, and U.S. government involvement—will further constrain the availability of frontier AI1 in the future. They compound and reinforce each other, and have dramatically accelerated in recent weeks and months. Everyone outside the inner circle of U.S.-based developers needs to grapple with that fact.
Security & Distillation
The first and most obvious constraint on widespread availability is the one we’ve seen in the Mythos context: security considerations prevent developers from providing top-tier capabilities to every paying customer.
The canonical story starts with misuse risks: a highly capable new model seems realistically useful for conducting some sort of dangerous activity, such as cyberattacks or biological weapons design. Instead of rolling it out to the general public right away, you might first distribute it to defenders who can use their early access to shore up vulnerabilities—like we’ve seen in the case of Mythos. You continue by rolling out some models only to customers of which you’re reasonably sure they won’t outright abuse the model for criminal purposes; and perhaps only after the model is no longer state-of-the-art, you roll out to everyone.
Already now, we’re seeing the second stage: the U.S. government realises that this sort of restricted access is better both for the national interest and national security, and starts flirting with the idea of making the virtuous early example into a general rule. There are many reasons for the national security apparatus to do this—perhaps they don’t trust AI developers to keep dangerous capabilities away from just-as-dangerous criminals, non-state actors and adversaries. Or perhaps they’d rather like to know which exploits the new models are about to reveal so they can use them themselves first—as they’ve done before. Put differently: if I were the NSA and sitting on a bunch of zero-days, I’d also love to know which of them Mythos can find so I could use them to my advantage before everyone gets their patch online.
Next to misuse risks, there’s another dimension that might motivate even more straightforward crackdowns on availability: risks of model theft, espionage and distillation. The former would make developers wary of where to host models—weights in an unsecured datacenter would pose a substantial vulnerability, and many countries outside the U.S. haven’t even started thinking about securing datacenters. But the latter, distillation, is the more pressing concern. Multiple reports indicate that part of the success story of so-called fast followers—model developers 6-9 months behind the frontier like China’s DeepSeek—is based on distillation practices that require more or less unfettered access to API tokens.
Distillation is not tenable for model developers in the long run: it will be very hard to capture sufficient revenue if you have to recoup all R&D investment in the six months until someone distilled your model. That point is extremely salient to politicians, and plays right into latent concerns on U.S.-China competition and industry espionage. So I’d expect distillation crackdowns, if not from the government, then from developers—more burdensome KYC, more restrictive default access, more geopolitically motivated access conditions. None of those bode well for broad-based frontier access.
Compute Crunches
But the trouble does not stop with security concerns. More fundamentally, providing access to a frontier model is a zero-sum game. Veterans of the tech industry and European sovereignty hawks both like to invoke the parallel to software licenses—that yes, software innovation came with some marginal dependencies, but that the logic of consumer market size prevailed in the end: Microsoft and others face low marginal costs compensated at full market prices for rolling out their software for everyone. But not so with frontier AI....

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