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Turning now to AI. Let's go and put this one up here on the screen. Very interesting story here from Notice. An internal Treasury Department warning is warning about the dangers of AI. So, there's a draft report that allegedly exists inside of the Treasury Department. It is set to warn the risk posed by an artificial intelligence market liking key aspects of it to do that upended the US economy in the early 2000s.
The document, the existence and contents of which have not been previously reported, is actually a huge departure from the public tone of the administration, which is part of why it's actually important. So, here's what they write. Career Treasury analysts found that AI firms are more deeply entrenched in the US economy than their.com predecessors and pose significant risk to the entire system. If financial conditions change, productivity goals are missed or various choke mo choke points sty growth. A downturn in the AI market would send shock waves throughout the entire economic ecosystem.
The report concludes an AI bubble popping would lead to less of an immediate crash than the US economy experienced in the early 2000s, but that the companies would cut back. Investors would lose confidence, and the economy would likely grow more slowly should the industry falter. Quote, "Stock markets, private private credit markets, companies financing data center buildouts, cloud providers, chip manufacturers, and utilities would all feel the effects." Trump administration officials have never voiced similar unease in public and a Treasury Department spokesperson dismissed the findings as quote unvetted and not representative of the AY's policy or views. Quote, "The official position of the secretary and the US Treasury is that artificial intelligence will be a key driver of America's new golden age."
So they're betting the farm. Uh this is basically who was who was president.com? Was it Clinton or Bush by that? Probably. Oh, it was Clinton. Right. So when I think about so is Clinton I guess it's a little different because he was completely on the way >> different crashes. Yeah. March 2000 is really when it starts to downplay. >> But if Clinton I guess Clinton had a future or Al Gore or somebody would be like the future of our economy. He may probably disapp but in 2014 >> and just like with the railroads the future was the railroads. >> Yeah. But again 20 years later >> the canals >> uh the railroads kind of eclipse the canals.
What I think is interesting is basically just the cuz it's we we've all been saying this, everybody knows it to be true. It doesn't take a genius to figure it out. However, having a internal report here which warns about this against your public positioning, this is the type of stuff which can come back to bite you in the ass, right? Because it's kind of like if I'm thinking back to remember the Bin Laden in 2001, how Bush received that briefing in August 2001? It was like bin Laden determined to attack the United States. It was totally dismissed at the time, routine part of the CIA briefing. But then the 911 commission happens and people were like, "Hey, oh my god, how could you have done this?" Or in, let's say, in 2008, nobody I can guarantee you at the time of what was it, GlassSteagall repeal. Nobody said a word, right? Nobody. Nobody was paying attention. They were like, "Yeah, whatever, rubber stamp. It is what it is." But after '08, everybody's like, "How did this happen?"
So, I think that this is an example, I think, of what the future will look like. And you know, having a draft report like this, which you dismiss, I mean, it's a scandal, right? Because you're saying, "Wow, you guys knew that this was a problem. You didn't do anything to cap any of the problems. You had these career analysts who were warning you this, this, and this." Right now, it's all gravy. I mean, let me check, you know, where where are we at today? Uh, yeah, S&P futures and it's pretty high. Um, yeah, the S&P's still up by 10% year to date, even though we had a massive, you know, Iran war, horrific situation in the last year. here it's up by 21%. We're in a full-blown bull market and it's like 5 years and the S&P is up 72%, right? So that's insanity. So everybody's in, you know, it's just like the good times, but I was reading a little bit about dot uh several I think it was a year or two ago and I did not realize, you know, if you had invested at the top of the market did not reach that high again until like 2013. So 13 years of a black hole. You're like, "Oh my god." So I mean America has not been through anything like that. Basically we had that and then 08 and '08 you know even in terms of the recovery. It's not the recovery I think that we wanted.
So the the fear here Ryan is I think what they talk about on the back end it's not about the AI companies going bust. It's that everybody all the GDP spend is AI. The data center built out is AI. A lot of the, you know, big tech companies which compromise all of the S&P 500 which is everybody's retirement accounts is all in Nvidia and Google and Meta and all these other companies whose entire bet is on AI. I mean Tesla is now trying to do AI. SpaceX is an AI company. It's not a rocket company, right? You know, their biggest uh driver right now is like selling compute to Anthropic and then Anthropic and OpenAI alone are both going to be $2 trillion collectively when they go IPO. So all of that is just going to mag up such a huge part of the economy where you're exposed no matter what like no matter what you do no matter what business you're in and then that kind of capital crunch which will come and if there's a downturn it will have serious serious problems for everybody.
>> Yeah. And I AI is here to stay. AI is going to >> sure >> like you know for better or for worse >> but the idea that there won't be some pullback >> right >> at minimum that's the scary part >> that's like what I would rather hear from a treasury secretary is like yes when when we have these >> massive shifts in our economy >> there is always and that Zuckerberg has said this himself like he's like yes there will be some multiundred billion dollar investments that will be a mistake and that will vanish >> yeah he literally said Yeah. It's like, okay, fine. At least you're at least you're clearheaded >> about how insane this is. >> Uh you you want to hear if it's whether it's a railroad boom or uh you know, the internet one that you're planning for the pullback. Okay, there's going to be a pullback and here's how we're going to make sure we get a soft landing. Yes. >> For the entire global economy. >> You don't want to hear actually it's going to be fine. the number is just going to keep going up and up and up. >> Yeah, exactly. That's where you're >> because everyone it was like why would that be the why would it be the first time in history? >> Yeah. >> That that is going to happen. >> Right.
I was reading I I don't I'm not a trader. I don't know the exact uh you know the exact details but I was reading about this new financial product which Khi offers which is like a highly leveraged liquid options market which offers more leverage than a traditional Wall Street bank. And I was like, "Oh, what could go wrong?" And they were like, "This is the biggest growth center of our company beyond sports betting." And I was like, "Uh, seems bad." You know, it's like, "Isn't that illegal?" Like, >> uh, nothing's illegal now. >> Where's the SEC on this? Like, >> it's not regulated by that. It's regulated by CFTC. So, it's like it's a different, you know, financial product. But it's the same thing. I mean, you know, we it just like >> is it regulated by CFTC or they just doing it? >> Cali is regulated. Well, yeah. Right. Exactly. Technically regulated. But if you go back to ' 06, nobody knew what a credit default swap was. Nobody. Everybody found out in '09 when they're like, "How did this happen?" Right? So, there's all kinds of these products which are swimming out there and commoditized car loans and all this debt and who even knows the leverage that exists behind AI. We have no idea. I mean, if the Iran war had not happened, the number one economic story actually would have been all of these private credit markets. There were all of these private lines of credit which were being called in by the big banks. Nobody even knew what was going on. I believe it's still happening as of today.
By the way, what's also interesting about this is the tone shift in the AI CEO. So, let's put this one up here on the screen. This is C3, guys. Uh, and what they talk about here is that big tech after after public opinion on AI has dramatically downshifted is that the tech CEOs Sam Alman and Daario and Zuckerberg and Jensen are all suddenly not saying the quiet part out loud anymore. Now, it's no longer AI jobs. Well, AI is going to wipe out all of your jobs. It's about how AI is going to grow your jobs. So, quote, "A year ago, the message from many business leaders was that AI was going to wipe out jobs." For the past month or so, tech CEOs have been striking a more optimistic tone. In late May, Sam Alman, who has previously predicted a seismic shift in the workforce, has now said, "We've been roughly right on technological predictions and pretty wrong on the social and economic implications." Soon after he told CNBC, "Our industry underestimated how much we're going to be able to keep people at the center of everything." Very big difference. I think here uh and now you also have here they say Daario who in May of 2025 had said that there will be you know more who in May in 2025 that AI was going to eliminate half of all jobs. A year later now says that companies quote can do the same thing with less resources and that leads to things like layoffs or they can do more with the same amount of resources. But that requires creativity. In a June essay, the executive now writes that in giving warnings of job displacement, he had wanted policymakers to have the best chance at adapting, he was not trying to be a quote profit of doom and did not and also wrote the possibility of enduring job loss remain. So softening the fall uh if this were to come.
>> On on Friday, we talked about Alex Karp's >> what people called a meltdown. That's just an Alex Karp monologue. It's not a meltdown. It's just that's how he talks. um on CNBC. >> It's called Autism. >> There's a clear moment though in it that is so revealing where he's so angry at Sam Alman and these others who he calls these prophets of doom saying you're going to get us a wealth tax. >> And that's what all of this is about. They feel like they have been too honest. >> Yes. >> About what the implications of their technology are going to be for particularly the white collar public which which still has some political purchase in this country. And they're going to use that remaining power that they have to implement a wealth tax. >> Exactly. >> And he's like, "Guys, stop talking about how we're going to make everybody unemployed because they're that's making them upset >> and they're going to come for us now. So stop." So now they're going to lie to you and be like, "Actually, >> this is just a little agent that's going to help you out in your job. There's going to be more jobs. Don't tax our wealth. >> Don't worry about it." And in the UK the you know they are they may they may move on a wealth tax. We'll see. >> Uh and you know the UK was the first to move on a progressive income tax 100 plus years a more than 100 years ago and then that kicked it off around the rest of the world. And these oligarchs have very long memories. They hated the income tax when it came in hit the wealthy >> and they are desperately trying to avoid this wealth tax.
I can't get my head around why somebody like Alice Carp, what's he worth? >> I I don't even know. >> 100 billion who God only knows >> seven I think probably seven billion. Let's let's see >> like what why does he care about a wealth tax? >> 12 12 between 12 and 16 billion. >> Okay. 12 and 16 billion. What's he care a couple billion? I mean a couple 2% pay it back. I mean, look, I I'm not defending. >> There's nothing he wants in this world that he can't buy unless he has some demented, >> right? >> Well, that's probably some dement. >> Here's the populist argument. What's that? Is it Steinbeck? Was it Steinbeck who said the problem with America is that every person sees themsel something something about like a dispossessed millionaire? Something like that. He said, "America will never have socialism because every American thinks that they're just a millionaire who hasn't made it." I've butchered the quote. I'm sorry, but I believe that was a Steinbeck quote from some time in the Great Depression. So, there is an element of it where I mean, remember what's the book? Thomas Frank, what's the matter with Kansas? I mean, there is a genuine element of it where people are like, "Hey, that's not fair. These are titans of industry. These are titans of, you know, whatever. They've done all this great stuff for society." I think that might have been true even, you know, in the industrialist age where you could make an argument and Carnegie and all this people were building all these temples to their own ego with the libraries and but these guys they don't even pretend like it's all just like we're going to take your job and we're going to get filthy rich off of it >> and they said they need to maybe do a little right. So for them, they're like, "Hey, cool it." But their their best argument that they have is like, "Well, it was a billion and now it's 50 million. Soon it will be 1 million or something like that, right?" And so the average guy could be worth a million. And and generally, I mean, the most conservative people in the country are actually small business owners, right? Because they're the ones who actually manage all of their own taxes. I get it. It's a literal nightmare uh having to do all of it. But part of the reason is that that block is usually because they're the most tax people in the country because of the way that they make money. These are some of the least taxed people in the country. Generally, the way that they try to weaponize it is about innovation, etc. But I think if you look at the polling for how the people feel about the wealth tax, what it comes down to is they're like, "Look, we get it. Maybe it's unfair to tax unrealized gains, but at the end of the day, we don't give a You guys are super wealthy. We don't care anymore, right? Like, we need to punish you." And I mean when you when they're affecting society in the way that we are like sometimes the problem is they argue with wealth tax in terms of like fiscal you know oh you wouldn't even be going to anything for everybody else they're like it's purely punitive and we're fine with that right they're like we don't care >> we don't care if it gets wasted >> they're like we don't care if it get we don't like you like that's what they don't understand is people hate them and here's a here's a good example uh let's put uh what >> Steinbeck I think the quote you were thinking Yeah. >> He called Americans temporarily embarrassed capitalists. >> That's it. That That's what it was. It was something like that. >> Yeah. They're like they're like capitalists, they just don't have any capital yet. >> Yeah. It was like he said something. It was in the Great Depression. I remember he said something. >> It's like his essay, a primmer on the 30s. >> There you go. That's the That's the Sager endorsed essay. I like that one. >> Yeah. I mean, should go read it. He was a genuinely insightful guy.
Let's put C4 up here on the screen. Uh so this Griffin found this one. Perfect example. Like when are you going to do stuff like this? You got the Nashville Zoo. It is now a battleground in the data center race. So let's talk about it. So before the sun has risen, they say a club leopard, no long no bigger than her hands, wiggles impatiently, wetting to be fed by the Nashville Zoo's animal health director. The newborn sucks eagerly, its tiny paws paddling the air with every gulp. But now, zoo officials say that a planned data center just beyond the perimeter, quote, could introduce constant noise, light, and industrial activity that may disrupt the environmental conditions critical not only for the leopard breeding program, but for the more than 3,000 animals that call the zoo home. Now, this is a classic yim or nimood style debate. Yeah, you're going to ruin the leopards. Uh, you're going to introduce all of this noise and you can know what's the what's the argument for it? We're like, well, this is about technological innovation. What? It's a zoo. It's an animal. Ultimately, it's for our kids entertainment, right? But this is the problem that the AI CEOs have never gotten to. Data center for what? What are you doing for me? Right? If you're really wealthy, my stock is going up. Okay, that's great. Right? But for everybody else, you're like, uh, you say you're going to replace my job. I get a bunch of AI slop of kittens turning into dancing monkeys on my phone. That's it. Like, what am I getting out of this? Right? And that's fundamentally the problem, I think.
>> What you're getting out of it is your job getting taken. >> Yeah. Right. Well, according to them, previously, except not now. Oh, we've changed our outlook. You actually flagged this. Um, >> that guy you had on, William Lawrence, just has some polling. Let's put C6 up here on the screen. Uh, this is a new favorability that they found. Do you have a favorable or unfavorable opinion of data centers? And in his poll, he found 19% favorable, 74% unfavorable. Yeah, man. He's in a three-way Democratic primary for for in a swing district. Yeah. >> Which is currently represented by a Republican guy Tom Barrett in Michigan. >> Uh the other two candidates are kind of these corporate Democrats who are afraid to say anything about the data centers. You know, they express concerns. He's like, "No, shut down the data centers data center moratorium." Right? And as a result, according to what looks like, you know, his analysis of his own polling, and I think we can all agree that it's pretty fair analysis, is that his opposition to data centers is the thing that is elevating him in the primary. He's probably going to win the primary even though he's the kind of most left-wing candidate in a swing district. And it's because people are like, I don't care if you call him a socialist or he he was a co-founder of Sunrise Movement. I don't care if you call him an ecosocialist. He's against these data centers. I'm against these data centers. And if you're a Republican, too, he his that same poll showed that independents preferred him by 19 points over the Republican, which that that's ballgame in a swing district if if he wins the nomination and if they don't, you know, pummel him with whatever, right? >> Um >> and it's all about the data centers. So the independent like I don't care if you call him a socialist. And they they also pulled uh your attitudes on the Democrats, Democratic socialism um and a bunch of other things. The least unpopular uh was democratic socialism for him. It was still a negative.
>> Well, I mean, take a look at Utah and this whole Kevin Olirri situation, right? What just happened? I mean, Fox News had to apologize. He smeared these people. >> They're worried about getting sued as Chinese communist activists or whatever. And it's like really Utah is full of a bunch of Chinese communist liberals. Utah, one of the most conservative states in the country. And this is rural Utah, too, about what we're talking about. Like, are you joking, dude? Like, no, that's not what this is about. And so, look, I mean, I just think for them, you know, you're talking about the wealth tax, AI, and all of that. Everybody can see the number go up, but number go up doesn't apply as much, right? It applies when you're worth 12 billion. 12 to 16 is a lot. It doesn't apply so much when you're, you know, let's say you, what is it, 50 something% of people don't even have a retirement account. So, the only number that matters to them that should go up is wages, which guess what hasn't gone up, you know? The only number you see going up is gas. >> That's the key point. >> Western economies for the last 20 years or so have been growing at about 1%. >> Mhm. >> The richest top.1% have seen their wealth grow by way more than 1%. That means we don't have a whole lot more wealth to spread around. So as they gobble it up, there's less for everybody else. That is just un unless we can figure out a way to start growing the economy at 10%. The wealth the wealthy growing their wealth at 10% gobbles our wealth. >> It's actually more uh than 10%. >> It's way more than 10%. >> It's like I just gave you the numbers. It's like 20%. >> And every and so and as they get richer and richer and richer, they have to do something with that money. And what they do is they invested in assets, stock market, houses, com like commodities. So they're buying up everything. the and the power of exponential exponential growth means they will own everything at some point not to in the not too distant future unless track that we're on >> unless we tax their wealth.
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