Let's Know Things

This week we talk about Studio Ghibli, Andrej Karpathy, and OpenAI.We also discuss code abstraction, economic repercussions, and DOGE.Recommended Book: How To Know a Person by David BrooksTranscriptIn late-November of 2022, OpenAI released a demo version of a product they didn’t think would have much potential, because it was kind of buggy and not very impressive compared to the other things they were working on at the time. This product was a chatbot interface for a generative AI model they had been refining, called ChatGPT.This was basically just a chatbot that users could interact with, as if they were texting another human being. And the results were good enough—both in the sense that the bot seemed kinda sorta human-like, but also in the sense that the bot could generate convincing-seeming text on all sorts of subjects—that people went absolutely gaga over it, and the company went full-bore on this category of products, dropping an enterprise version in August the following year, a search engine powered by the same general model in October of 2024, and by 2025, upgraded versions of their core models were widely available, alongside paid, enhanced tiers for those who wanted higher-level processing behind the scenes: that upgraded version basically tapping a model with more feedstock, a larger training library and more intensive and refined training, but also, in some cases, a model that thinks longer, than can reach out and use the internet to research stuff it doesn’t already know, and increasingly, to produce other media, like images and videos.During that time, this industry has absolutely exploded, and while OpenAI is generally considered to be one of the top dogs in this space, still, they’ve got enthusiastic and well-funded competition from pretty much everyone in the big tech world, like Google and Amazon and Meta, while also facing upstart competitors like Anthropic and Perplexity, alongside burgeoning Chinese competitors, like Deepseek, and established Chinese tech giants like Tencent and Baidu.It’s been somewhat boggling watching this space develop, as while there’s a chance some of the valuations of AI-oriented companies are overblown, potentially leading to a correction or the popping of a valuation bubble at some point in the next few years, the underlying tech and the output of that tech really has been iterating rapidly, the state of the art in generative AI in particular producing just staggeringly complex and convincing images, videos, audio, and text, but the lower-tier stuff, which is available to anyone who wants it, for free, is also valuable and useable for all sorts of purposes.Just recently, at the tail-end of March 2025, OpenAI announced new multimodal capabilities for its GPT-4o language model, which basically means this model, which could previously only generate text, can now produce images, as well.And the model has been lauded as a sort of sea change in the industry, allowing users to produce remarkable photorealistic images just by prompting the AI—telling it what you want, basically—with usually accurate, high-quality text, which has been a problem for most image models up till this point. It also boasts the capacity to adjust existing images in all sorts of ways.Case-in-point, it’s possible to use this feature to take a photo of your family on vacation and have it rendered in the style of a Studio Ghibli cartoon; Studio Ghibli being the Japanese animation studio behind legendary films like My Neighbor Totoro, Spirited Away, and Princess Mononoke, among others.This is partly the result of better capabilities by this model, compared to its precursors, but it’s also the result of OpenAI loosening its policies to allow folks to prompt these models in this way; previously they disallowed this sort of power, due to copyright concerns. And the implications here are interesting, as this suggests the company is now comfortable showing that their models have been trained on these films, which has all sorts of potential copyright implications, depending on how pending court cases turn out, but also that they’re no long being as precious with potential scandals related to how their models are used.It’s possible to apply all sorts of distinctive styles to existing images, then, including South Park and the Simpsons, but Studio Ghibli’s style has become a meme since this new capability was deployed, and users have applied it to images ranging from existing memes to their own self-portrait avatars, to things like the planes crashing into the Twin Towers on 9/11, JFK’s assassination, and famous mass-shootings and other murders.It’s also worth noting that the co-founder of Studio Ghibli, Hayao Miyazaki, has called AI-generated artwork “an insult to life itself.” That so many people are using this kind of AI-generated filter on these images is a jarring sort of celebration, then, as the person behind that style probably wouldn’t appreciate it; many people are using it because they love the style and the movies in which it was born so much, though. An odd moral quandary that’s emerged as a result of these new AI-provided powers.What I’d like to talk about today is another burgeoning controversy within the AI space that’s perhaps even larger in implications, and which is landing on an unprepared culture and economy just as rapidly as these new image capabilities and memes.—In February of 2025, the former AI head at Tesla, founding team member at OpenAI, and founder of an impending new, education-focused project called Eureka Labs named Andrej Karpathy coined the term ‘vibe coding’ to refer to a trend he’s noticed in himself and other developers, people who write code for a living, to develop new projects using code-assistant AI tools in a manner that essentially abstracts away the code, allowing the developer to rely more on vibes in order to get their project out the door, using plain English rather than code or even code-speak.So while a developer would typically need to invest a fair bit of time writing the underlying code for a new app or website or video game, someone who’s vibe coding might instead focus on a higher, more meta-level of the project, worrying less about the coding parts, and instead just telling their AI assistant what they want to do. The AI then figures out the nuts and bolts, writes a bunch of code in seconds, and then the vibe coder can tweak the code, or have the AI tweak it for them, as they refine the concept, fix bugs, and get deeper into the nitty-gritty of things, all, again, in plain-spoken English.There are now videos, posted in the usual places, all over YouTube and TikTok and such, where folks—some of whom are coders, some of whom are purely vibe coders, who wouldn’t be able to program their way out of a cardboard box—produce entire functioning video games in a matter of minutes.These games typically aren’t very good, but they work. And reaching even that level of functionality would previously have taken days or weeks for an experienced, highly trained developer; now it takes mere minutes or moments, and can be achieved by the average, non-trained person, who has a fundamental understanding of how to prompt AI to get what they want from these systems.Ethan Mollick, who writes a fair bit on this subject and who keeps tabs on these sorts of developments in his newsletter, One Useful Thing, documented his attempts to make meaning from a pile of data he had sitting around, and which he hadn’t made the time to dig through for meaning. Using plain English he was able to feed all that data to OpenAI’s Deep Research model, interact with its findings, and further home in on meaningful directions suggested by the data.He also built a simple game in which he drove a firetruck around a 3D city, trying to put out fires before a competing helicopter could do the same. He spent a total of about $13 in AI token fees to make the game, and he was able to do so despite not having any relevant coding expertise.A guy named Pieter Levels, who’s an experienced software engineer, was able to vibe-code a video game, which is a free-to-play, massively multiplayer online flying game, in just a month. Nearly all the code was written by Cursor and Grok 3, the first of which is a code-writing AI system, the latter of which is a ChatGPT-like generalist AI agent, and he’s been able to generate something like $100k per month in revenue from this game just 17 days, post-launch.Now an important caveat here is that, first, this game received a lot of publicity, because Levels is a well-known name in this space, and he made this game as part of a ‘Vibe Coding Game Jam,’ which is an event focused on exactly this type of AI-augmented programming, in which all of the entrants had to be at least 80% AI generated. But he’s also a very skilled programmer and game-maker, so this isn’t the sort of outcome the average person could expect from these sorts of tools.That said, it’s an interesting case study that suggests a few things about where this category of tools is taking us, even if it’s not representative for all programming spaces and would-be programmers.One prediction that’s been percolating in this space for years, even before ChatGPT was released, but especially after generative AI tools hit the mainstream, is that many jobs will become redundant, and as a result many people, especially those in positions that are easily and convincingly replicated using such tools, will be fired. Because why would you pay twenty people $100,000 a year to do basic coding work when you can have one person working part-time with AI tools vibe-coding their way to approximately the same outcome?It’s a fair question, and it’s one that pretty much every industry is asking itself right now. And we’ve seen some early waves of firings based on this premise, most of which haven’t gone great for the firing entity, as they’ve then had to backtrack and starting hiring to fill those positions again—the software they expected to fill the gaps not quite there yet, and their offerings suffering as a consequence of that gambit.Some are still convinced this is the way things are going, though, including people like Elon Musk, who, as part of his Department of Government Efficiency, or DOGE efforts in the US government, is basically stripping things down to the bare-minimum, in part to weaken agencies he doesn’t like, but also, ostensibly at least, to reduce bloat and redundancy, the premise being that a lot of this work can be done by fewer people, and in some cases can be automated entirely using AI-based systems.This was the premise of his mass-firings at Twitter, now X, when he took over, and while there have been a lot of hiccups and issues resulting from that decision, the company is managing to operate, even if less optimally than before, with about 20% the staff it had before he took over—something like 1,500 people compared to 7,500.Now, there are different ways of looking at that outcome, and Musk’s activities since that acquisition will probably color some of our perceptions of his ambitions and level of success with that job-culling, as well. But the underlying theory that a company can do even 90% as well as it did before with just a fifth of the workforce is a compelling argument to many people, and that includes folks running governments, but also those in charge of major companies with huge rosters of employees that make up the vast majority of their operating expenses.A major concern about all this, though, is that even if this theory works in broader practice, and all these companies and governments can function well enough with a dramatically reduced staff using AI tools to augment their capabilities and output, we may find ourselves in a situation in which the folks using said tools are more and more commodified—they’ll be less specialized and have less education and expertise in the relevant areas, so they can be paid less, basically, the tools doing more and the humans mostly being paid to prompt and manage them. And as a result we may find ourselves in a situation where these people don’t know enough to recognize when the AI are doing something wrong or weird, and we may even reach a point where the abstraction is so complete that very few humans even know how this code works, which leaves us increasingly reliant on these tools, but also more vulnerable to problems should they fail at a basic level, at which point there may not be any humans left who are capable of figuring out what went wrong, since all the jobs that would incentivize the acquisition of such knowledge and skill will have long since disappeared.As I mentioned in the intro, these tools are being applied to images, videos, music, and everything else, as well. Which means we could see vibe artists, vibe designers, vibe musicians and vibe filmmakers. All of which is arguably good in the sense that these mediums become more accessible to more people, allowing more voices to communicate in more ways than ever before.But it’s also arguably worrying in the sense that more communication might be filtered through the capabilities of these tools—which, by the way, are predicated on previous artists and writers and filmmakers’ work, arguably stealing their styles and ideas and regurgitating them, rather than doing anything truly original—and that could lead to less originality in these spaces, but also a similar situation in which people forget how to make their own films, their own art, their own writing; a capability drain that gets worse with each new generation of people who are incentivized to hand those responsibilities off to AI tools; we’ll all become AI prompters, rather than all the things we are, currently.This has been the case with many technologies over the years—how many blacksmiths do we have in 2025, after all? And how many people actually hand-code the 1s and 0s that all our coding languages eventually write, for us, after we work at a higher, more human-optimized level of abstraction?But because our existing economies are predicated on a certain type of labor and certain number of people being employed to do said labor, even if those concerns ultimately don’t end up being too big a deal, because the benefits are just that much more impactful than the downsides and other incentives to develop these or similar skills and understandings arise, it’s possible we could experience a moment, years or decades long, in which the whole of the employment market is disrupted, perhaps quite rapidly, leaving a lot of people without income and thus a lot fewer people who can afford the products and services that are generated more cheaply using these tools.A situation that’s ripe with potential for those in a position to take advantage of it, but also a situation that could be devastating to those reliant on the current state of employment and income—which is the vast, vast majority of human beings on the planet.Show Noteshttps://en.wikipedia.org/wiki/X_Corphttps://devclass.com/2025/03/26/the-paradox-of-vibe-coding-it-works-best-for-those-who-do-not-need-it/https://www.wired.com/story/doge-rebuild-social-security-administration-cobol-benefits/https://www.wired.com/story/anthropic-benevolent-artificial-intelligence/https://arstechnica.com/tech-policy/2025/03/what-could-possibly-go-wrong-doge-to-rapidly-rebuild-social-security-codebase/https://en.wikipedia.org/wiki/Vibe_codinghttps://www.newscientist.com/article/2473993-what-is-vibe-coding-should-you-be-doing-it-and-does-it-matter/https://nmn.gl/blog/dangers-vibe-codinghttps://x.com/karpathy/status/1886192184808149383https://simonwillison.net/2025/Mar/19/vibe-coding/https://arstechnica.com/ai/2025/03/is-vibe-coding-with-ai-gnarly-or-reckless-maybe-some-of-both/https://devclass.com/2025/03/26/the-paradox-of-vibe-coding-it-works-best-for-those-who-do-not-need-it/https://www.creativebloq.com/3d/video-game-design/what-is-vibe-coding-and-is-it-really-the-future-of-app-and-game-developmenthttps://arstechnica.com/ai/2025/03/openais-new-ai-image-generator-is-potent-and-bound-to-provoke/https://en.wikipedia.org/wiki/Studio_Ghibli This is a public episode. 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This week we talk about Elon Musk, deportations, and the First Amendment.We also discuss electric vehicles, free speech, and Georgia.Recommended Book: Red Rising by Pierce BrownTranscriptGreenpeace is a protest-focused, environmentalist nongovernmental organization that was originally founded in Canada in the early 1970s, but which has since gone on to tackle issues ranging from commercial whaling to concerns about genetic engineering, worldwide.They have 26 independent organizations operating across nearly 60 countries, and their efforts are funded by a combination of grants and donations from individual supporters; and that’s an important detail, as they engage in a lot of highly visible acts of protest, many of which probably wouldn’t be feasible if they had corporate or government funders.They piss a lot of people off, in other words, and even folks who consider themselves to be environmentalists aren’t always happy with the things they do. Greenpeace is vehemently anti-nuclear, for instance, and that includes nuclear power, and some folks who are quite green in their leanings consider nuclear power to be part of the renewable energy solution, not something to be clamped down on. The same is true of their other stances, like their protests against genetic engineering efforts and their at times arguably heavy-handed ‘ecotage’ activities, which means sabotage for ecological purposes, to making their point and disrupt efforts, like cutting down forests or building new oil pipelines, that they don’t like.Despite being a persistent thorn in the side of giant corporations like oil companies, and despite sometimes irritating their fellow environmentalists, who don’t always agree with their focuses or approaches, Greenpeace has nonetheless persisted for decades in part because of their appreciation for spectacle, and their ability to get things that might otherwise be invisible—like whaling and arctic oil exploration—into the press. This is in turn has at times raised sufficient awareness that politicians have been forced to take a stand on things they wouldn’t have otherwise been forced to voice an opinion on, much less support or push against, and that is often the point of protests of any size or type, by any organization.A recent ruling by a court in North Dakota, though, could hobble this group’s future efforts. A company involved in the building of the Dakota Access pipeline accused Greenpeace of defamation, trespass, nuisance, civil conspiracy, and other acts, and has been awarded about $667 million in damages, payable by Greenpeace, because of the group’s efforts to disrupt the construction of this pipeline.The folks at the head of Greenpeace had previously said that a large payout in this case could bankrupt the organization, and while there’s still a chance to appeal the ruling, and they’ve said they intend to do so, this ruling is already being seen as a possible fulcrum for companies, politicians, and government agencies that want to limit protests in the US, where the right to assemble and peaceably express one’s views are constitutionally protected by the first amendment, but where restrictions on protest have long been used by government officials and police to stifle protests they don’t like for various reasons.What I’d like to talk about today is another, somewhat unusual wave of protests we’re seeing in the US and to some degree globally right now, too, and the larger legal context in which these protests are taking place.—When US President Trump first stepped into office back in early 2017, there were protests galore, huge waves of people coming out to protest the very idea of him, but especially his seeming comfort with, and even celebration of, anti-immigration, racist, and misogynistic views and practices, including his alleged sexual abuse and rape of dozens of women, one of whom successfully took him to court on the matter, winning a big settlement for proving that he did indeed sexually assault her.The response to his second win, and his ascension to office for another term in 2025, has been more muted. There have been a lot of protests, but not at the scale of those seen in 2017. Instead, the majority of enthusiasm for protest-related action against this administration has been aimed at Elon Musk, a man who regularly tops the world’s richest people lists, owns big-name companies like SpaceX and Tesla, and who has his own collection of very public scandals and alleged abuses.One such scandal revolves around Musk’s decision to plow hundreds of millions of dollars into getting Trump reelected. As a result of that investment, he was brought into the president’s confidence, and now serves as a sort of hatchet-man via a pseudo-official agency called the Department of Government Efficiency, or DOGE.Musk and his team have been jumping from government agency to government agency, conducting mass firings, harassing employees, hacking and by some accounts stealing and deleting all sorts of sensitive data, and generally doing their best to cause as much disruption as possible. Many of their efforts have been pushed back against, eventually, by courts, but that’s only after a lot of damage has already been done.The general theory of their operation is ostensibly to cut costs in the US government, and though outside analysts and watchdogs have shown that they haven’t really managed to do that on any scale, and that their actions will probably actually add to the government’s deficit, not reduce it, Musk and Trump claim otherwise, and that’s enough for many people in their orbit. The unsaid purpose of this group, though, seems to be making the government so ineffective and hollow that businesses, like Musk’s and those of his friends, can step in and do things that were previously done by government agencies, and can reap massive profits as a consequence; folks having to pay more for what was previously provided by the government, and a bunch of rich folks profiting because they’re the only ones capable of providing such services, now that the agencies have been gutted.The courts are still scrambling, as they move a lot slower than individuals with seeming authority and the support of a vindictive president can move, but this has already caused a lot of consternation across the political spectrum, and Musk, though popular with a certain flavor of Republican and far-right voter, has pissed off a lot of more conventional Republicans, in addition to pretty much every Democrat.This is important context for understanding why the most vocal and enthusiastic protests in the US these first few months of 2025 have targeted Musk, and more specifically, Musk’s electric vehicle company, Tesla.Tesla was once celebrated by the political left as the EV company that made EVs sexy and popular, at a time in which this type of vehicle was anything but.Musk’s shift to the political far-right changed that, though, and the general theory of these protests is that Musk is mostly held financially afloat by Tesla’s huge market valuation: Tesla stocks are worth way more than those of other car companies, with a price multiple—how much the stock is worth, compared to how much business the company actually does, and how much their assets are worth—is more akin to that of a dotcom-era tech startup than a car company, the stock price valued at something like 120-times the apparent book value of the company.So Musk, who owns a lot of Tesla stock, can basically borrow money against that stock, and this allows him to tap tens of billions of dollars worth of borrowed money on a whim, because the banks know he’s good for it. In this way he can inflate his supposed worth while also getting liquid cash whenever he needs it, despite not having to sell those stocks he owns.This method of acquiring liquid wealth by leveraging non-liquid assets has allowed him to support Trump’s reascension, but it’s also allowed him to do things like buy Twitter, which he has renamed X and converted into a sort of voicebox for the right and far-right. It has also allowed him to do things like offer money to potential voters who are signed up to vote and who sign petitions that are supportive of far-right causes; which is not quite paying for votes, which is illegal in the US, but it is the closest thing to paying for votes you can get away with, and there’s still debate whether this is actually legal or not, but either way, until the courts catch on up this, too, he’s been able to influence vote outcomes to varying degrees because of that access to money.Some of the biggest and most consistent protesting efforts in the post-second-term-Trump US have revolved around Tesla, its cars, and its dealerships, and the theory of operation here is that by protesting Tesla, you might be able to decrease the company’s market valuation, which in turn decreases Musk’s access to money. Less market value for the company means Musk can’t borrow as much money against it, and if he has less access to liquid wealth, to cash rather than stocks and other illiquid assets, he may become less relevant in the administration, and less capable of influencing elections across the country (and to some degree the world, as he’s throwing money at candidates he favors globally, now, too).These protests have been traditional, in the sense of gathering peacefully outside Tesla dealerships, chanting slogans and carrying signs, but also of a more aggressive sort, including spraypainting Tesla vehicles, doing things to embarrass folks who own these cars, and in some few cases, setting them on fire or otherwise destroying them.The general idea, again, is to make the brand toxic, which in turn should reduce sales, and that, ideally, for the protestors, would then reduce Musk’s access to money, which he is using to influence elections and other such activities and outcomes.The administration has responded to these protests with a bizarre and, it’s generally agreed, pretty embarrassing car commercial for Tesla, held outside the White House, in which Trump claimed he was buying one, and told Americans to buy a car to support Tesla because it’s a wholesome American company.Trump also recently said that he would consider people caught defacing Teslas or even just protesting the brand in non-destructive ways to be domestic terrorists, which is a pretty chilling thought, as some post-9/11 rules about how the government can treat terrorists are still on the books; calling someone a terrorist is a means of doing away with due process and human rights, basically, so this is a threat to go full violent authoritarian on people using their first amendment rights in ways this administration doesn’t like.These protests are occurring within the context of another notable, protest-oriented storyline, one in which students who participated in protests against the US and Israel’s actions in Gaza at Columbia University in New York last spring have been arrested; one was on a visa to the US and was in the process of becoming a doctor—her visa has now been revoked—and the other, who has a green card, and who is thus a permanent US resident, and who has no criminal record, faces a case in immigration court in Louisiana, where he was shipped after being arrested by Immigration and Customs Enforcement, or ICE.His hearing has been scheduled for April 8, and his lawyers are challenging both his detention and the government’s apparent efforts to make an example of him, trying to deport him and do away with his citizenship because he protested against the government’s actions.The administration is claiming they can do this, and can do a bunch of other stuff, including deporting immigrants who they claim, without evidence, are members of a Venezuelan gang; they say there’s legal precedent that gives them the ability to deport enemy aliens, those who are antagonistic to the US and its government, basically—the same sort of rulings that were used to justify deporting anyone sympathetic to the communist party back in the mid-to-late 20th century.This same concept is being floated to justify the deportation of some of the people who have protested against Israel’s and the US’s actions in Gaza, the accusation being that they are supporting Hamas and other organizations that have been declared terrorist organizations by the US, so when folks protest against these governments’ activities in the region, they’re also supporting the causes of terrorist organizations—which then arguably gives the US government the right to deport them, because they weren’t born in the US.The legality of all this is still being debated and working its way through the court system, but the ultimate goal seems to be giving the administration the ability to deport whomever they like, and establishing that immigrants of any kind don’t have the free speech rights that natural born US citizens enjoy; which isn’t concretely established in law, and which these many efforts and court cases are meant to sort out more formally.This administration has also shown itself to be just really antagonistic against any person or entity that defies or criticizes it, including journalistic entities, politicians, or protesting individuals; they’ve used lawsuits, executive orders, and a slew of other tools to legally punish, financially punish, and in many cases socially punish, telling their supporters that it would be a real shame if something happened to these people, seemingly aiming to scare their opponents, while also possibly sparking stochastic violence against them.And this isn’t a US-exclusive thing.In Georgia, the country not the state, the government is levying huge fines on people who protested against its pivot toward allying with Russia instead of moving toward the EU two years ago; they’re using a so-called “foreign agent bill” to accuse anyone who says or does something against the government of being paid by foreign entities, which in turn allows them to crack down on these people hard, while seemingly not violating their good, dedicated, patriotic citizens’ rights.They’ve also started levying fines for the equivalent of about $16,000 on those who participate in protests that even briefly block traffic, which is one more way to asymmetrically hobble people and organizations that might otherwise cause a regime trouble; anyone who does these things in their favor can just have these fines waived or ignored.We’re seeing similar things in Turkey and Hungary, right now, two other countries that have seen widescale protests and significant efforts by their governments to attack those protestors, to get them to stop. In some case these efforts backfire, leading to more and more substantial pushback by the population against increasingly aggressive and abusive regimes.It’s impossible to know ahead of time which way things will go, though, and right now, in the US, most of these anti-protestor efforts are still young, as are the anti-Tesla, anti-Musk protests, themselves. One side or the other could be forced to pivot by judicial rulings—though this could also lead to a long-predicted constitutional crisis, in which the judges say the government can’t do something they want to do, and the government just ignores that ruling, creating an entirely different and arguably more substantial problem.Show Noteshttps://apnews.com/article/columbia-protests-immigration-detention-mahmoud-khalil-755774045e5e82849e3281e8ff72f26dhttps://www.cnn.com/2025/03/21/middleeast/turkey-protests-erdogan-mayor-intl-latam/index.htmlhttps://www.nytimes.com/2025/03/23/world/middleeast/turkey-ekrem-imamoglu-istanbul.htmlhttps://www.nytimes.com/2025/03/22/world/middleeast/turkey-erdogan-democracy-istanbul-mayor-detention.htmlhttps://en.wikipedia.org/wiki/2025_Turkish_protestshttps://apnews.com/article/turkey-mayor-jailed-istanbul-f962743f724f00a318f84ffaed7f58dehttps://www.nytimes.com/2025/03/22/us/politics/what-is-doge-elon-musk-trump.htmlhttps://www.nbcnews.com/news/us-news/protesters-gather-tesla-showrooms-dealerships-denounce-elon-musk-doge-rcna197595https://www.nytimes.com/2025/03/22/nyregion/columbia-trump-concessions-watershed.htmlhttps://apnews.com/article/hungary-pride-ban-orban-lgbtq-rights-e7a0318b09b902abfc306e3e975b52dfhttps://www.bbc.com/news/articles/c5y0zrg9kpnohttps://www.reuters.com/world/europe/hungarys-president-signs-law-banning-pride-parade-despite-protests-2025-03-19/https://www.reuters.com/world/europe/hungarys-orban-vows-fast-crackdown-media-ngos-over-foreign-funding-2025-03-15/https://www.cnn.com/2025/02/15/europe/georgia-protests-authoritarianism-fears-intl-cmd/index.htmlhttps://www.amnesty.org/en/latest/news/2025/03/georgia-authorities-freeze-accounts-of-organizations-supporting-protesters-to-kill-the-peaceful-protests/https://www.france24.com/en/live-news/20250323-georgia-cracks-down-on-pro-eu-protests-with-crippling-fineshttps://www.nytimes.com/2025/03/23/nyregion/mahmoud-khalil-trump-allegations.htmlhttps://www.nytimes.com/2025/03/23/us/politics/spacex-contracts-musk-doge-trump.htmlhttps://www.theguardian.com/us-news/2025/mar/21/oil-protest-activism-greenpeace-dakota-pipeline-verdicthttps://www.theguardian.com/us-news/2025/mar/19/greenpeace-lawsuit-energy-transfer-dakota-pipelinehttps://www.cnn.com/2025/03/18/climate/greenpeace-lawsuit-first-amendment/index.htmlhttps://www.pbs.org/newshour/nation/what-to-know-about-greenpeace-after-it-was-found-liable-in-the-dakota-access-protest-casehttps://apnews.com/article/greenpeace-dakota-access-pipeline-lawsuit-verdict-5036944c1d2e7d3d7b704437e8110fbbhttps://en.wikipedia.org/wiki/Greenpeacehttps://en.wikipedia.org/wiki/Right_to_protest This is a public episode. 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This week we talk about tariffs, consumer confidence, and trade wars.We also discuss inflation, GDP, and uncertainty.Recommended Book: A Brief History of Intelligence by Max S. BennettTranscriptOn January 20, 2025, mere hours after being sworn into his second term in office as President of the United States, Donald Trump announced new 25% tariffs on most incoming goods from Canada and Mexico, accusing the two allies of failing to halt the flow of drugs and illegal migrants into the US. These tariffs would go into effect on February 1, he said, and they would be in addition to existing tariffs that were already in effect for specific import categories.On that same day, he also speculated that he might impose a universal tariff on all imports, saying that he believed all countries, allies or not, were taking advantage of the US, and he didn’t like that.Less than a week later, Trump announced that he would impose 25% tariffs on all good from Colombia, with immediate effect, and would double that tariff to 50% within a week. This appears to have been a punishment for the Colombian government’s decision to turn back planes full of immigrants the US government deported and sent their way, without approval from the intended recipient of those deported people, the Colombian government. There was a minor tiff between these governments, but the White House declared victory on the matter later that night, saying the tariffs would be held in reserve, implying they could come back at any time if their demands are not met.An executive order implementing the threatened 25% tariffs on Canada and Mexico was signed on February 1, and a new 10% tariff on China went into effect the same day. Countermeasures were threatened by everyone involved, and after Trump published a social media post saying there would probably be economic pain for a while, his government agreed to a 30 day pause on tariffs for Mexico and Canada, while also threatening new tariffs against the European Union; another long-time US ally.The new 10% tariff on Chinese imports went into effect on February 4, and China retaliated with its own counter-tariffs on US goods, including things like farm machinery and energy products. It also implemented new restrictions on the export of rare earth minerals to the US—a category of raw materials everyone is scrambling to secure, as they’re vital for the production of batteries and other fundamental technologies—and they launched a new antimonopoly investigation into Google, which deals with some Chinese companies.On February 10, Trump reimposed a 25% tariff on all foreign steel and aluminum; a move that made US metal companies happy, but essentially all other US companies very unhappy, and in mid-February he threatened even more, broad, and vague tariffs on basically everyone, saying he’s doing what he’s doing in order to force companies to move manufacturing infrastructure back to the US, after decades of offshoring everything.At the end of February, Trump said the delayed tariffs on Canada and Mexico would go into effect, as planned, on March 4, alongside those new 10% tariffs on China. On that day, Canada implemented its own counter-tariffs on the US to the tune of 25% on about $155 billion of US goods imported by the country.Canada and Mexico send about 80% of their exports to the US market, so their economies are expected to be hit hard by this trade war. China, in contrast, only sends about 15% of its exports to the US, so the impact will be more tempered.These three countries, though, are the US’s largest trading partners, collectively accounting for over 40% of US imports and exports. In addition to buying a lot of US goods, they also export the majority of things like oil, beer, copper wire, chocolate, and other goods that the US consumes; and the cost of tariffs are almost always passed on to the end-consumer, so higher tariffs on these sorts of goods mean raised prices on a lot of stuff across the economy.On March 6, after a lot of back-and-forth with US automakers and with the Mexican and Canadian governments, a lot of the tariffs placed on goods from these countries were suspended, the US government denying that their withdrawal had anything to do with the US market, which was suffering in response to this wave of economic disruptions—though many tariffs were kept in place, and Trump said the US would still impose tariffs on all steel and aluminum imports beginning on March 12.On the 12th, the EU and Canada announced a new wave of retaliatory tariffs against the US, though the European side said they would hold off on their implementation of these tariffs, waiting till April 1 to see what happens. The next day, Trump threatened a 200% charge on alcoholic products from the EU in response to their planned 50% tariffs on US whiskey and other products within their borders.At the moment, as of mid-March 2025, a lot of these tariffs are still speculative, as it’s generally understood, from Trump’s bombastic approach to deal-making and his previous backtracking from these sorts of threats, that many of these tariffs could disappear, announced solely to provide leverage against those Trump wants to squeeze for more concessions and what he considers to be more favorable trade terms. Some of them could become concrete reality, though, and part of the issue here is that it’s nearly impossible to know which is which, because there also seems to be a larger effort to rewire the US and global economies by this administration—and that effort, plus the uncertainty caused by tariffs and similar actions, are leading to some pretty severe market upsets within the US, and resultantly around the world, as well.And that’s what I’d like to talk about today: the impacts of these tariffs and other actions by this administration, so far, and what might happen next, based on currently available numbers and analysis.—Economies are ridiculously complex systems, and it’s impossible to say with 100% certainty what caused what, and to what degree things would be different had some other path been taken by those in control of various regulatory and economic levers.That said, the nonpartisan Tax Foundation has estimated that just those first batch of proposed tariffs by the US government, not including impacts from foreign retaliations, which could be substantial, will reduce US GDP by about 0.4% and reduce total hours worked by the equivalent of 309,000 full-time jobs; so a lot less output, and a lot less overall productivity.That’s on top of the estimated 0.2% long-term decrease in US GDP caused by the first Trump administration’s tariffs, which were maintained by the subsequent Biden administration.These existing tariffs raised prices in the US and reduced both output and employment, which means the boom the US economy saw under the Biden administration might have been even boomier, had those tariffs been dropped. But now they’re more or less locked in, and these new tariffs will probably amplify their effect, near-term and long-term.On top of that, the constant threats and pullbacks and seemingly off-the-cuff decisions to implement what amounts to all sorts of huge-scale taxes on a frenetic array of goods, including luxuries, but also some very fundamental things, like the metals we use to build and manufacture basically everything, is stoking uncertainty throughout the US and global economies.That uncertainty has wide-ranging impacts, but one of the most direct consequences is that consumer sentiment in the US has nose-dived, as ordinary people worry about the combined impacts of tariffs, cuts to government programs, layoffs across government agencies, and new restrictions on immigration, which even ignoring the human element of such things can cause all sorts of issues across industries that rely on immigrant workers to stay afloat.In mid-March of this year, US consumer sentiment hit 57.9, down from 64.7 in February. That’s the lowest its been since November of 2022, it’s down 27% from a year earlier, and it’s a lot lower than economist predictions for this month, which were set at 63.2.Consumer sentiment tells us how people are feeling about the economy, about their potential to earn, and about where things are going. This influences how people spend, how they consume, and that in turn helps determine how the overall economy will go in the coming years, as people will be more likely to hunker down and save, taking as few risks as possible and making fewer purchases if they believe things will be rough; which in some cases can become a self-fulfilling prophecy, because those behaviors tend to shrink the economy, which leads to less output, fewer investments being made, more layoffs, and so on. That means a drop in consumer sentiment can make things bad even if they would otherwise be good, but if they’re bad already, they can become even worse because folks stop doing things that would improve the economy, out of self-preservation.And that impact can be just as pronounced when things are weird and wobbly, rather than outright bad, as seems to be the case in the US at the moment.There’s no firm evidence that the US economy is destined for a recession at this point, but the Russell 2000 index, which is made up of smaller companies than indexes like the S&P 500, and which is thus more prone to on-the-ground variables than its larger index kin, has dropped more than 16% since November, when it hit a new high on optimism about what the new Trump administration might do for businesses and the economy.The S&P 500 also collapsed, though about half as much, and it rallied somewhat last week as investors bought the dip, scooping up stocks at lower prices following that drop. But there’s a lot of speculation that this might be a so-called dead cat bounce recovery—a moment in which a market seems to be recovering from a drop, but where it’s actually just bouncing up a little before heading back downward—and even this index, which is packed with corporations that are less susceptible to brief market wobbles than those in the Russell, might be heading for another downswing in the coming weeks, based on a lot of the economic numbers used to predict such things, at the moment.One such metric is interest in alternative assets like gold, and the price of gold hit a new high last Friday, surpassing $3,000 per ounce for the first time ever.That’s not something you tend to see when markets are healthy and people expect them to do well; if they are healthy and expected to surge rather than collapse, people tend to put their money in the market, not in shiny metals. But the shiny metals bet seems to be appealing right now, which hints at an even broader suspicion of the US economy than even that consumer sentiment and those bad market figures anticipate.And the market figures have been bad. In just 3 weeks, beginning on February 19, the S&P alone lost more than $5 trillion in value.The Atlanta Fed, which uses a fairly reliable model to predict future US GDP numbers, was predicting a healthy nearly 4% increase for the US’s GDP for the first quarter of 2025 back in late-January, early-February, but that prediction plummeted from positive 4% to negative 2.4% by early March.That figure could still change, as it’s informed by data that don’t all arrive at the same time, but it’s still a staggering drop, and it reflects the impact of all these tariffs, but also all the destruction of government programs and agencies, the mass firings, and of course the uncertainty caused by all of these things in aggregate, alongside the impacts of said uncertainty on everyone at all scales, from trade partners to US-based small businesses to individual consumers.So few people and institutions are happy about what’s happening right now, but it does look like, in the immediate future, at least, there are some beneficiaries of all this tumult.Markets in China are flourishing, especially Hong Kong’s Hang Seng index, which is up more than 20% since Trump’s inauguration on January 20. And Europe’s market, which has struggled with stasis for years now, is up more than 4% over that same period.Uncertainty about markets, but also military alliances, especially NATO, have pushed Germany—which has struggled since Russia invaded Ukraine, when their energy markets were utterly scrambled, which in turn hobbled their massive manufacturing base—Germany has unleashed a huge amount of government funds on their economy, and that big uptick in spending has helped basically the whole EU market grow. The German government has traditionally been tight-pocketed, but a declaration by the incoming Chancellor that they would do whatever it takes to both defend themselves and boost their economic outlook in the face of unreliable backing from their long-time ally, the US, has bolstered enthusiasm and optimism throughout the region, bringing EU nations closer together, increasing spending on all sorts of fundamentals, and bringing them closer to the Canadian government, as well.The Chinese government has recently indicated they’ll be injecting a bunch of money and other types of support in their economy, as well, which creates a stark contrast with the US government, which seems to be refocusing on pulling government resources from across society and the economy, and spending mostly on tax cuts for the wealthiest people and biggest companies, instead.The US government’s efforts to go America first, and not do anyone, even its longest-term, most reliable allies, any favors, or even trade in what might be considered a balanced way, thus seems to be scrambling US markets while simultaneously stoking those that are being cut off, unifying aspects of the rest of the world in antagonism against the US, while also providing them with incentive to reinvest in their own markets; which could be good for them long-term, making them less reliant on the US in all sorts of ways, but which seems pretty bad for the US in particular, short-term, and casts the US-dominated global order into disarray for the immediate future, with all sorts of consequences, economic and otherwise.The degree to which this impacts Trump’s approval ratings has yet to be seen, as while his approval is collapsing, especially on the economy, right now, a lot of the most serious economic impacts are expected to fall hard on regions that most enthusiastically voted for him, and Republican talking points have already pivoted toward messaging that implies suffering for a while is good and patriotic.That message might succeed and keep people on side even as their investments collapse and tariff-driven inflation hits their bottom-lines, or it might not. But it seems like the administration is ramping up for a version of austerity that doesn’t actually reduce the deficit, but instead takes a bunch of money from programs and investments that helped these areas, and moves it to other stuff that mostly helps fund tax cuts for wealthy allies of the administration—and that could come back to bite them, come election season.All of this is also happening in parallel to the many political maneuverings of the administration and its opposition, though, and just recently the Republican-held congress was able to pass a funding bill, moving a lot more authority and control to the White House; so whatever the short-term approval numbers show, none of this seems to be having much of a negative impact on Trump’s control of government. That could change, though, over the course of the next year, leading into 2026’s midterm election, when the makeup of congress could be influenced by these and similar decisions.Show Noteshttps://www.reuters.com/markets/us/futures-rise-after-volatile-week-consumer-data-tap-2025-03-14/https://www.wsj.com/economy/consumers/consumer-confidence-march-2025-drops-trump-trade-e7e0964dhttps://www.axios.com/2025/03/15/economic-indicators-recession-riskhttps://www.cnn.com/2025/03/14/investing/gold-price-today-3000-ounce-intl/index.htmlhttps://www.cnbc.com/2025/03/14/us-stock-market-loses-5-trillion-in-value-in-three-weeks.htmlhttps://www.nytimes.com/2025/03/14/business/russell-2000-bear-market.htmlhttps://www.atlantafed.org/cqer/research/gdpnowhttps://www.nytimes.com/2025/03/14/us/politics/stock-market-correction-trump-tariffs.htmlhttps://www.nfib.com/wp-content/uploads/2025/03/NFIB-SBET-Report-Feb.-2025.pdfhttps://www.nytimes.com/2025/03/14/your-money/car-shopping-trump-tariffs-cfpb.htmlhttps://www.nytimes.com/2025/03/16/business/trump-sp-500-stocks-europe-china.htmlhttps://archive.ph/GNPRfhttps://www.realclearpolling.com/polls/approval/donald-trump/issues/economyhttps://www.nytimes.com/interactive/2025/03/15/business/economy/tariffs-trump-maps-voters.htmlhttps://www.nytimes.com/2025/03/15/us/politics/trump-spending-bill-government-shutdown.htmlhttps://www.wsj.com/finance/stocks/investing-stocks-risk-strategies-trump-policies-c4a5d3d9https://www.wsj.com/finance/currencies/trump-trade-tariffs-us-dollar-value-814cbe37https://www.wsj.com/livecoverage/stock-market-today-dow-nasdaq-sp500-03-17-2025https://www.politico.com/news/2025/03/16/wall-street-hoped-scott-bessent-would-keep-trump-in-check-he-had-other-ideas-00231771https://www.businessinsider.com/wall-street-mergers-acquisitions-ipos-hiring-slumps-trump-tariffs-2025-3https://www.politico.com/news/2025/03/14/trump-trade-wars-consumer-sentiment-00230833https://archive.ph/fUKPshttps://www.nytimes.com/2025/03/13/business/economy/trump-tariff-timeline.htmlhttps://www.nytimes.com/2025/03/14/business/energy-environment/trump-energy-oil-gas.htmlhttps://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/ This is a public episode. 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This week we talk about Euromaidan, minerals deals, and propaganda.We also discuss European security, NATO, and the western-led world order.Recommended Book: Storm Front by Jim ButcherTranscriptIn February of 2014, pro-Russian protests racked parts of southeastern Ukraine and Russian soldiers, their uniforms and weapons stripped of flags and other identifying markers, occupied another part of Ukraine called Crimea.This was seemingly in response to Ukraine’s overthrow of its pro-Russian president, Viktor Yanukovych, who was toppled as part of the Euromaidan protests, which were themselves a response to Yanukovych deciding to aim for closer ties with Russia, rather than signing an association agreement with the EU, which would have committed Ukraine to several EU-oriented reforms, related to corruption, among other things, while also giving Ukrainians many new rights, including visa-free movement and access to the European Investment Bank, beginning a few years later, in 2017.This sudden pivot away from the EU and toward Russia didn’t go down well with the Ukrainian public, which had repeatedly shown it wanted to lean toward the west, and the Euromaidan protests were focused on weeding out government corruption; the existing government was accused of being all sorts of corrupt, and had also been accused of human rights abuses and allowing Russian oligarchs undo influence at the highest rungs of power; Yanukovych was in Russia’s pocket, basically, and his overthrow made Russia worry that they would lose control of their neighbor.So Russia moved in to take part of Ukraine, basically uncontested, both internally and externally—a lot of other governments made upset noises about this, but Russia gave itself cover by removing their flags from their personnel, and that gave them the ability to paint everything that happened as a natural uprising from within Ukraine, the people wanting freedom from their Ukrainian oppressors, and Russia was just supporting this cry to overthrow oppressive tyrants, because they’re very nice and love freedom.For the next eight years, the Ukrainian government fought separatist forces, funded and reinforced by the Russian government, in the southeastern portion of their country, while Russia expanded their infrastructure in Crimea, which again, they stole from Ukraine early on, and where they previously leased vital naval facilities from Ukraine; and those facilities are assumed to be a big part of why all this went down the way it did, as without said naval facilities, they wouldn’t have a naval presence in the Black Sea.Then, in February of 2022, after a multi-month buildup of troops and military hardware along their shared border, which they provided all sorts of excuses for, and which many commentators and governments around the world excused as just a bunch of saber-rattling, nothing to worry about, Russia launched a full-scale invasion of Ukraine, initially aiming for a blitzkrieg-like assault that was meant to take Ukraine’s capital city, Kyiv, and decapitate the country’s government within just days, at which point they could replace the government with someone who’s working for them, another puppet they controlled.As of the day I’m recording this, in early March of 2025, the war is still ongoing, though. And in the years since it began, it’s estimated that more than a million people have been killed or injured, while entire cities across Ukraine have been leveled and tens of thousands of Ukrainian refugees have fled Russia’s forces as they’ve raped and pillaged and murdered their way across the Ukrainian countryside, those refugees leaving for destinations around the world, but creating a refugee crisis in nearby European nations like Poland and Germany, in particular.There’s been a lot of back and forth in this conflict, Russia initially thought to have a massive upper hand, probably winning within days, as intended, but then Ukraine held fast, Russia redeployed its troops and armor, Ukraine got some remarkable counter-attacks in, and then Russia started to reset its economy to allow for a more drawn-out conflict.As of early 2025, Russia is once against considered to have the upper-hand, and though Ukraine has been holding the line even in the most under-assault regions in the eastern portion of its territory, and has in recent weeks managed to take some Russian-held territory back, Russia’s comparably larger number of troops, its recent resupply of soldiers from North Korea, its larger economy and number of supply chains, and its relationships with entities like China and Iran, in addition to North Korea, all of which have been supplying it with things it needs to keep the war effort going, at length, have all conspired to put Ukraine on the back foot.Additionally, Ukraine is struggling, after this many years of total war, to refill empty boots and make do with whatever their allies can and will offer them, in terms of money, weapons, but also the basics, like food and fuel. They’ve been able to shore-up some limited aspects of their economy, and have innovated like crazy when it comes to things like drones and other fundamentals of asymmetric, defensive warfare, but right now at least, the larger forces swirling around in the geopolitical realm are making life difficult for Ukraine, and for those who are still supporting them.And that’s what I’d like to talk about today; the continuing conflict in Ukraine, but especially what’s happening on the sidelines, beyond the battle itself—and how those sideline happenings might lead to some fundamental changes in how Europe is organized, and the makeup of the modern world order.—At this point I’ve done probably half a dozen or more episodes on this conflict; it’s long-lasting, it’s big, it’s important locally, but also globally, and it’s been informing both geopolitical and economic outcomes since day one.Today I’d like to talk about some recent happenings, most of them from the past few months, that could prove impactful on the eventual outcome of this conflict, and might even determine when that end of fighting arrives.And at the center of these happenings is recently reelected US President Trump, who has always had a, let’s call it unusual, public appreciation for Russian President Putin, and the strongman image he and other global authoritarians wield, while at the same time not being a big fan of Ukrainian President Zelensky—perhaps in part because Trump called Zelensky back in 2019 to try to get him to come up with evidence supporting a debunked conspiracy theory about his opponent, Joe Biden’s administration, related to alleged impropriety in US-Ukrainian relations.Zelensky could find no such evidence, and when he told Trump there was nothing to be found, Trump blocked payments on $400 million worth of military aid for Ukraine, holding it hostage until Zelensky came up with what he wanted. This became a big scandal only after the fact, and before it could be made public or became known by congress via a whistleblower complaint, Trump released the money. This led to a formal impeachment inquiry into Trump later that year, which led to his impeachment for abusing his power and obstructing Congress—but he was then acquitted by the Republican-led Senate.This, it’s thought, may have colored Trump’s behavior toward Zelensky when the two men sat down, alongside several other US officials, including US Vice President JD Vance, to discuss a potential mineral deal between the US and Ukraine, which was based on an earlier deal that the Ukrainian government dismissed.The original deal basically required that Ukraine exploit its mineral wealth and put half of the money it makes from those minerals into a fund that would be used to pay the US back for the military assistance it’s provided so far, to the tune of $500 billion; which is quite a lot more than the $175 billion or so the US has spent on this conflict since Russia invaded, only $128 billion of which has directly aided the Ukrainian government, as opposed to funding US activities associated with the war, or supporting other affected countries thereabouts.So originally the US asked for more than double what’s been provided so far, in return, paid for by Ukraine’s mineral wealth, which includes a lot of the types of rare earth minerals that are vital for common modern technologies, like computers, batteries, and solar panels.That didn’t fly, mostly because it didn’t contain a security guarantee for Ukraine—the US saying it would protect them if necessary, basically, in exchange for this huge sum of money—so the new deal asked for $500 billion be placed in a fund, and that fund would be jointly controlled by the US and Ukraine, the funds used to rebuild the country after the war.50% of all revenues from Ukrainian natural resources newly exploited after the war, so not from existing mines and ports and such, would be put into this fund. Like the first time around, this deal didn’t include a security agreement from the US, but the general idea was that this fund would incentivize new investment in the area, and because Ukraine has a lot of unexploited mineral wealth, this could give the US a new source for these sorts of valuable raw materials that are currently mostly controlled by China, but which the US government is attempting to claim more of, now that it’s realized it’s way behind on locking down sources of these really important things.At the meeting where this second deal was meant to be signed, though, Zelensky flying to the US to sit down with Trump to make it happen, the President and Vice President more or less verbally attacked Zelensky, criticizing him for not being more overtly grateful, and telling him he was wrong when he said that Russia started the war by invading Ukraine.It was all pretty bizarre, and even folks in Trump’s own party seemed pretty puzzled by the whole thing, some of them calling it embarrassing, as Trump and Vance were basically parroting Putin’s propaganda that no one actually believes because they ignore easily verifiable facts.In any event, this led to a lot of fallout between the US and Ukrainian governments, with Trump suggesting he would lean more heavily on Ukraine to get them to accept peace on Russia’s terms, because the Ukrainians couldn’t see reason and accept his version of reality, essentially.Trump has also suggested that he’s been talking a lot with Putin, and that he believes Putin wants peace, and it’s time to end the war. Putin, for his part, has not seemed inclined to give up anything in order to achieve peace, and Russian attacks on Ukraine have increased in scale since Trump came into office, and even more so after talks about a supposed peace agreement began.All of which has had implications on the ground.In Ukraine, Ukrainian soldiers have had to operate with fewer resources, as Trump cut off additional funding and supply shipments, post-meeting. He recently ordered that the US not share intelligence with them, too, and they cut off the sharing of satellite imagery, which Ukraine has used to great effect to strike Russian targets from a distance.This has also had implications across Europe, though, as while Ukraine is being invaded now, there are concerns that if Putin gets away with taking part or all of Ukraine, he’ll go for other previous Soviet assets, next, maybe starting with the Baltic nations—Estonia, Latvia, and Lithuania—and then tearing off chunks of Poland, Finland, or other neighbors that were previously part of the Soviet Union, like eastern Germany.The European Union, despite a fair bit of warning about Trump’s stance on the issue, and the possibility that he would return to office, has been seemingly dumbstruck by Trump’s sudden pivot away from supporting Ukraine, and away from NATO more broadly, toward a stance that favors Russia, instead. European governments have been scrambling to come up with an aid package that will replace some of what the US would have given, and have started sharing more intelligence, as well, including satellite imagery.It won’t be easy, though, as the US versions of these things, from monetary resources to eyes in the sky vastly outshine what even the combination of British, French, and German assets can offer—at least at this stage. And the US has traditionally handled the lion’s share of spending and building in these areas, shouldering the majority of NATO spending, because, well, it could, and that was a major premise of the post-WWII, western-led world order. The US said it would protect global capitalist democracies with its military might and nukes, if necessary, and European nations have been generally happy with this setup as it has generally allowed European governments to spend less money on their militaries and more on other stuff.That state of affairs seems to have ended, or at the very least become too unreliable to bet on, though, so EU nations are attempting to fill in the gaps left by the suddenly less-reliable-seeming US government, not just for Ukraine, but for themselves, as well.Poland’s president recently announced that he wants to develop nuclear weapons and wants every adult male to undergo military training, so the country can field an army 500,000-strong.The French president has said he wants to extend his country’s nuclear umbrella—guaranteed deterrence, basically, using nuclear weapons—to the whole of the EU. France has far fewer nukes than the US and Russia, but this captures a sense of the moment in the Union, where a bunch of currently underfunded militaries are realizing they might not be able to rely on the US in a pinch. And while they collectively have a lot more people and resources than Russia, Russia is fully mobilized and has shown itself to be willing to attack sovereign nations, whenever it pleases, caring a lot less for the human lives it spends, in the process, than is typical in western-style democracies.Even short of full-scale, out of nowhere invasions, Russia could pose a threat to European governments via asymmetrical routes. It’s been seemingly approving all sorts of espionage operations meant to increase immigration arrivals in European nations where immigration is already a hot-button issue, nudging politics to the far-right, and it’s allegedly been attacking infrastructure, in terms of hacking and just blowing stuff up, in order to sow discord and fear.As I mentioned earlier, too, part of Germany was previously held by the Soviet Union, and that same part of the country has recently voted heavily in favor of the country’s furthest-right party, which wants stronger ties with Russia. So while conventional military issues are at the forefront of discussion, right now, Russia’s long history of asymmetric warfare is also getting a fair bit of attention, as it could conceivably use these groups as a casus belli to attack, carving off pieces of its European neighbors and slowly incorporating them into its sphere of influence, similar to what it did in Ukraine, beginning in 2014; if eastern Germany supports Russia, it could fund and in other ways support uprising efforts in these regions, creating chaos and potentially even breaking off separatist states that would pull those regions into Russia’s orbit.It’s a tumultuous moment in this part of the world, then, in part because of the conflict that’s still ongoing—a much larger and more powerful nation having invaded its smaller, less-powerful neighbor. But it’s also tumultuous because of the implications of that conflict, especially if Russia comes out on top. If they win, there would seem to be a far greater chance of their deciding to keep the ball rolling, replicating a model that worked (without significant long-term consequences) across more neighboring nations.And if they can do that before Europe reinforces itself—assuming that’s what the EU does, as it can be difficult to get a bunch of people with a bunch of at times competing interests to agree on anything, and even more so when said agreement involves both money and potentially sending civilians into harm’s way—if Russia can get there before a new, restructured and reinforced Europe emerges, we could see another, similar conflict soon, and this one could be even more successful than the last, if Russia tweaks its formula to make it more effective, and European governments succumb to war weariness, exhausted by the war in Ukraine, in the meantime.Show Noteshttps://www.cfr.org/article/how-much-us-aid-going-ukrainehttps://en.wikipedia.org/wiki/Trump%E2%80%93Ukraine_scandalhttps://www.csis.org/analysis/breaking-down-us-ukraine-minerals-dealhttps://www.nytimes.com/2025/03/08/world/europe/ukraine-russia-north-korea-kursk.htmlhttps://www.washingtonpost.com/world/2025/03/08/zelensky-trump-fallout-ukraine/https://www.nytimes.com/2025/03/04/world/europe/ukraine-us-trump-military-support.htmlhttps://www.nytimes.com/2025/03/06/us/politics/ukraine-zelensky-trump-russia.htmlhttps://apnews.com/article/russia-ukraine-war-dobropillya-us-intelligence-3d0bad105a93933e9cdaca5cf31fcf74https://mwi.westpoint.edu/no-substitute-for-victory-how-to-negotiate-from-a-position-of-strength-to-end-the-russo-ukraine-war/https://www.reuters.com/world/europe/eu-leaders-cautiously-welcome-macrons-nuclear-umbrella-offer-2025-03-06/https://www.nytimes.com/2025/03/07/world/europe/bulgarians-guilty-spying-russia-uk.htmlhttps://www.politico.com/news/2025/03/08/europe-scrambles-to-aid-ukraine-after-us-intelligence-cutoff-00219678https://www.bbc.com/news/articles/c9wpy9x890wohttps://www.cbsnews.com/news/keith-kellogg-ukraine-intelligence-sharing-pause/https://www.bbc.com/news/articles/ce8yz5dk82wohttps://www.nytimes.com/2025/03/07/world/us-ukraine-satellite-imagery.htmlhttps://www.bbc.com/news/articles/c05m907r39qohttps://www.nytimes.com/2025/03/07/us/politics/trump-russia-sanctions-tariffs.htmlhttps://www.csis.org/analysis/ukraines-future-vision-and-current-capabilities-waging-ai-enabled-autonomous-warfarehttps://www.politico.eu/article/donald-tusk-plan-train-poland-men-military-service-russiahttps://www.euronews.com/my-europe/2025/03/08/poland-says-it-plans-to-give-every-adult-male-military-traininghttps://www.nytimes.com/2025/02/22/world/europe/ukraine-trump-minerals.htmlhttps://apnews.com/article/ten-days-that-upended-us-support-for-ukraine-8930c01a15910a7ad8a7f7c7fac9ba3ahttps://www.wsj.com/world/white-house-and-ukraine-close-in-on-deal-for-mineral-rights-e924c672https://ca.finance.yahoo.com/news/ukraine-us-still-ironing-parts-191805611.htmlhttps://www.reuters.com/business/us-could-cut-ukraines-access-starlink-internet-services-over-minerals-say-2025-02-22/https://www.nytimes.com/2025/02/25/world/europe/ukraine-minerals-deal.htmlhttps://www.cnn.com/2025/02/26/europe/ukraine-us-mineral-resources-deal-explained-intl-latam/index.htmlhttps://www.spglobal.com/commodity-insights/en/news-research/latest-news/electric-power/122624-eu-moving-to-develop-infrastructure-for-nuclear-energy-expansion-officialshttps://www.bloomberg.com/news/articles/2025-03-07/european-stocks-see-most-inflows-in-decade-amid-defense-splurgehttps://www.nytimes.com/2025/02/10/business/ai-summit-paris.htmlhttps://apnews.com/article/germany-ukraine-debt-brake-economy-military-spending-74be8e96d8515ddddd53a99a69957651https://www.nytimes.com/interactive/2025/03/03/world/europe/ukraine-russia-war-drones-deaths.html?unlocked_article_code=1.2U4.b15Z.1EA4tDb_37Bqhttps://www.nytimes.com/2025/03/10/world/europe/ukraine-russia-eastern-front-line.htmlhttps://www.iiss.org/online-analysis/military-balance/2025/02/combat-losses-and-manpower-challenges-underscore-the-importance-of-mass-in-ukraine/https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-march-7-2025https://en.wikipedia.org/wiki/Euromaidanhttps://en.wikipedia.org/wiki/European_Union%E2%80%93Ukraine_Association_Agreementhttps://en.wikipedia.org/wiki/Russo-Ukrainian_Warhttps://en.wikipedia.org/wiki/Timeline_of_the_Russian_invasion_of_Ukraine_(1_January_2025_%E2%80%93_present) This is a public episode. 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This week we talk about Luna 2, soft-landings, and Firefly Aerospace.We also discuss the private space launch industry, lunar landers, and regolith.Recommended Book: The Mercy of Gods by James S.A. CoreyTranscriptIn 1959, Luna 2, a Soviet impactor-style spacecraft, successfully reached the surface of the Moon—the first-ever human-made object to do so.Luna 2 was very of its era; a relatively simple device, similar in many ways to the better-known Sputnik satellite, but getting a craft to the moon is far more difficult than placing something in orbit around Earth, in part because of the distance involved—the Moon is about 30-Earth’s from the surface of the earth, that figure varying based on where in its elliptical orbit it is at the moment, but that’s a good average, around 239,000 miles which is about 384,000 km, while Sputnik’s orbit only took it something like 359 miles, around 578 km from the surface. That’s somewhere in the neighborhood of 670-times the distance.So new considerations, like fuel to get there, but also charting paths to the moon that would allow the human-made object to actually hit it, rather than flying off into space, and even figuring out whether craft would need to be designed differently if they made it out of Earth’s magnetic field, were significant hurdles that had to be leapt to make this mission a success; everything was brand new, and there were gobs of unknowns.That said, this craft didn’t settle onto the moon—it plowed into it like a bullet, a so-called ‘hard landing.’ Which was still an astonishing feet of research and engineering, as at this point in history most rockets were still blowing up before making it off the launch pad, including the projects that eventually led to the design and launch of Luna 2.The US managed their own hard landing on the Moon in 1962, and it wasn’t until 1966 that the first soft landing—the craft slowing itself before impact, so that some kind of intact device would actually continue to exist and function on the surface of the moon—was accomplished by the Luna 9.The Luna 9 used an ejectable capsule that was protected by airbags, which helped it survive its 34 mph, which is about 54 kmh impact. This successful mission returned the first panoramic photographs from the surface of the moon, which was another notable, historic, incredibly difficult at the time feat.A series of rapid-fire firsts followed these initial visits, including the first-ever crewed flight to the Moon, made by the US Apollo 8 mission in 1968—that one didn’t land, but it did circle the Moon 10 times before returning to Earth, the first successful crewed mission to the surface of the Moon made by the Apollo 11 team in 1969, and by the early 70s humans had made several more moon landings: all of them were American missions, as the US is still the only country to have performed successful crewed missions to the Moon’s surface, but the Apollo 11, 12, 14, 15, 16, and 17 missions all put people on the lunar surface, and then returned them safely to Earth.The Luna 24, another Soviet mission launched in 1976, was the last big space race era mission to return lunar samples—chunks of moon rock and regolith—to earth, though it was a robotic mission, no humans aboard. And by many measures, the space race actually ended the previous year, in 1975, when Apollo and Soyuz capsules, US and Soviet missions, respectively, docked in orbit, creating the first international space mission, and allowing US astronauts and Soviet cosmonauts to shake hands, symbolically burying the hatchet, at least in terms of that particular, non-earthbound rivalry.What I’d like to talk about today is a recent, successful soft landing on the lunar surface that’s historic in nature, but also contemporarily significant for several other reasons.—Firefly Space Systems was founded in the US in 2014 by a team of entrepreneurs who wanted to compete with then-burgeoning private space companies like SpaceX and Virgin Galactic by, like these competitors, reducing the cost of getting stuff into low Earth orbit.They were planning to become profitable within four years on the back of the also-burgeoning small satellite industry, which basically means selling space on their rockets, which are capable of carrying multiple small satellites on what’s often called a ‘rideshare’ basis, to companies and agencies that were keen to launch their own orbital assets.These smaller satellites were becoming increasingly popular and doable because the tech required was shrinking and becoming cheaper, and that meant you no longer needed a boggling amount of money to do basic research or to lob a communications satellite into orbit; you could spent a few million dollars instead of tens or hundreds of millions, and buy space on a rocket carrying many small satellites, rather than needing to splurge on a rocket all by yourself, that rocket carrying only your giant, extremely costly and large conventional satellite.This path, it was hoped, would provide them the benefits of economies of scale, allowing them to build and launch more rockets, which in turn would bring the costs of such rockets and launches down, over time.And the general concept was sound—that’s basically what SpaceX has managed to do, with mammoth success, over the past decade completely rewiring how the space launch industry works; their many, reusable rockets and rocket components, and abundant launches, many of which are used to lob their own StarLink in-orbit satellites into space, while also usually carrying smaller satellites provided by clients who pay to go along for the ride, bringing all of these costs down dramatically.So that model is basically what Firefly was aiming for, as well—but the Firefly team, which was made up of folks from Virgin Galactic, SpaceX, and other industry entities was sued by Virgin Galactic, which alleged that a former employee who left them to work for Firefly provided Firefly with intellectual property and committed what amounts to espionage, destroying data and hardware before they left.These allegations were confirmed in 2016, and some of Firefly’s most vital customers and investors backed out, leaving the company without enough money to move forward. A second lawsuit from Virgin Orbit against Firefly and some of its people hit that same year, and that left the company insolvent, its assets put up for auction in 2017.Those assets were bought by an investment company called Noosphere Ventures, which relaunched Firefly Space Systems as Firefly Aerospace. They then reworked the designs of their rockets a bit and relocated some of the company’s research assets to Ukraine, where the head of Noosphere Ventures is from.They picked up a few customers in the following years, and they leased a private launch pad in Florida and another in California. In 2021, they were awarded more than $90 million to develop exploration tech for the Artemis Moon program, which was scheduled for 2023 and was meant to help develop the US’s private space industry; NASA was trying out a model that would see them hire private companies to deliver assets for a future moon-based mission, establishing long-term human presence on the moon, over the course of several years, and doing so on a budget by basically not having to build every single aspect of the mission themselves.That same year, the head of Noosphere Ventures was asked by the US Committee on Foreign Investment to sell nearly 50% of his stake in Firefly for national security reasons; he was born in Ukraine, and the Committee was apparently concerned about so much of the company’s infrastructure being located in a country that, even before Russia invaded the following year, was considered to be a precarious spot for security-vital US research and development assets.This is considered to be something of a scandal, as it was implied that this Ukrainian owner was himself under suspicion of maybe being a Russian asset—something that seems to have been all implication and no substance, as he’s since moved back to Ukraine and has gone on to be something of a war hero, providing all sorts of tech and other resources to the anti-invasion effort.But back then, he complied with this request, though not at all happily—and it sounds like that unhappiness was probably justified, though there are still some classified documents on the matter that maybe say otherwise; we don’t know for sure publicly right now.In any event, he and Noosphere sold most of their stake in Firefly to a US company called AE Industrial Partners, and the following year, in 2022 it successfully launched, for the first time, its Alpha rocket, intended to be its core launch option for small satellite, rideshare-style customers.The satellites placed in orbit by that first launch didn’t reach their intended height, so while the rocket made it into orbit, another launch, where the satellites were placed where they were supposed to go, actually happened in 2023, is generally considered to be the first, true successful launch of the Alpha rocket.All of which is interesting because this component of the larger space industry has been heating up; SpaceX has dominated, soaking up most of the oxygen in the room and claiming the lion’s share of available contracts. But there are quite a few private space companies from around the world profitably launching rockets at a rapid cadence, these days. And many of them are using the same general model of inexpensive rideshare rockets carrying smaller satellites into orbit, and the money from those launches then funds their other explorations, ranging from government mission components like rovers, to plans for futuristic space stations that might someday replace the aging International Space Station, to larger rockets and launch craft that might further reduce the cost of launching stuff into space, while also potentially serving as in-orbit or off-planet habitations—as is the case with SpaceX’s massive Starship craft.This is also notable, though, because Firefly launched a lander as part of its Blue Ghost mission, to the Moon on January 15 of 2025. That craft reached the moon, and successfully soft-landed there, on March 2 the same year.This lander was partly funded by that aforementioned 2021 Artemis award by NASA—it ultimately received just over $100 million from the agency to conduct this mission—and it was launched atop a SpaceX Falcon 9 rocket, as the company’s own Alpha rockets don’t yet have the right specs to launch their lander, the Blue Ghost M1; which interestingly shared space in this rocket with another lander produced by a Japanese company called ispace, whose name you might recognize, as ispace managed to get a previous lunar lander, the Hakuto-R 1, to the moon in 2023, but communication was lost with the craft a few seconds before it was scheduled to land. It was confirmed later that year that the lander crashed; though again, even just getting something to the moon is a pretty impressive feat.So this SpaceX rocket, launched in mid-January of 2025, had two competing lunar landers on it, one made by Firefly and one made by ispace. That latter lander is scheduled to arrive on the surface sometime in early May of this year, though that might change, based on all sorts of variables. But the former, Firefly’s Blue Ghost, successfully touched-down, soft-landing on the lunar surface on March 2.There’s another lander from Intuitive Machines—the American company that can claim to be the first to successfully soft-land on the lunar surface, but whose first effort tipped over. Their new lander could arrive as soon as March 6, just days after Blue Ghost, and it’ll be aiming for an area just 100 miles from the moon’s south pole; an area that’s of particular interest because of water ice contained in permanently shadowed areas thereabouts, which could be vital for long-term human occupation of the moon.So things are heating up on the lunar surface these days, but soft-landing something on the moon is still an accomplishment that few nations, much less private companies, have managed.In the past decade alone, India, Russia, and a nonprofit based in Israel have attempted and failed to achieve soft-landings, and those aforementioned Japanese and US companies managed to soft-land on the moon, but their landers tipped over, limiting the amount of research they could conduct once there. China is the only nation to have successfully achieved this feat on their first attempt, and they benefitted from decades of preexisting research and engineering know-how.And it’s not surprising that this is such a rare feat: in addition to the incredible distances involved, the Blue Ghost lander was traveling at around 3,800 mph, which is more than 6,100 kpm just 11 minutes before it landed. It then had to slow itself down, while also adjusting its orientation in order to safely land on an uneven, crater-paved moonscape; it slowed to the pace of a slow walk just before it touched down.Science-wise, this lander is carrying tools that will help it measure the stickiness of regolith on different materials, that will allow for more precise measurements of the distance between earth and the moon, and that will help researchers study solar winds, radiation-tolerant technologies, and the moon’s mantle. It has equipment that allowed it to detect GPS and Galileo signals from earth, which suggests these satellites might be used by craft and rovers on the moon, for navigation, at some point, and it has a drill that will allow it to penetrate the lunar regolith up to nine feet deep, among several other project assets.This has also served as a sort of proof of concept for this lander and mission type, as another Blue Ghost lander is scheduled to launch in 2026, that one aiming for the far side of the moon, with a third currently meant to head out in 2028, destined for a currently under-explored volcanic region.The aggregate goal of these US missions, alongside the research tools they deliver, is to eventually start building-out and supplying the necessary infrastructure for long-term human occupation of the moon, culminating with the construction of a permanently crewed base there.These sorts of ambitions aren’t new, but this approach—funding companies to handle a lot of the legwork, rather than keeping those sorts of efforts in-house, within NASA—is novel, and it arguably recognizes the nature of the moment, which is increasingly defined by cheaper and cheaper, and in most ways better and better offerings by private space companies, while those deployed by NASA are still really solid and impressive, but incredibly slow and expensive to develop and deploy, in comparison.This is also happening at a moment of heightened geopolitical competition in space, and one in which private entities are equipping the nation states that would have traditionally dominates this industry.China’s space agency has enjoyed a flurry of moon-related successes in recent years, and many of these missions have relied at least in part on efforts by private, or pseudo-private, as tends to be the case in China, companies.Business entities from all over the world are also regularly making the satellites and probes and components of landers that make these things work, so solar system exploration and space travel are no longer the exclusive wheelhouses of government agencies—the private sector is becoming a lot more influential in this area, and that’s led to some novel security issues, alongside massive swings in influence and power for the folks running these companies: perhaps most notably SpaceX CEO Elon Musk’s increasing sway over governments and even inter-governmental conflict, due in part to his company’s space launch capabilities, and their capacity to beam internet down to conflict zones, earthside, via their StarLink satellite array.So this is an area that’s heating up, both for earthbound and space-faring reasons, and the incentives and peculiarities of the private market are increasingly shaping the type of research and missions being conducted, while also changing the math of what’s possible, how quickly, and maybe even what level of risk is acceptable within a given mission or program.Show Noteshttps://www.cnn.com/science/live-news/moon-landing-blue-ghost-03-02-25/index.htmlhttps://en.wikipedia.org/wiki/Hakuto-R_Mission_1https://en.wikipedia.org/wiki/Hakuto-R_Mission_2https://spacenews.com/ae-industrial-partners-to-acquire-stake-in-firefly-from-noosphere/https://en.wikipedia.org/wiki/Artemis_programhttps://en.wikipedia.org/wiki/Firefly_Alphahttps://www.nasa.gov/news-release/nasa-selects-firefly-aerospace-for-artemis-commercial-moon-delivery-in-2023/https://www.theverge.com/2019/2/22/18234604/firefly-aerospace-cape-canaveral-florida-launch-site-slc-20https://www.newscientist.com/article/dn25861-next-generation-of-space-cowboys-get-ready-to-fly/https://apnews.com/article/moon-landings-failures-successes-545ea2f3ffa5a15893054b6f43bdbb98https://www.nytimes.com/2025/03/01/science/blue-ghost-firefly-mission-1-moon-landing.htmlhttps://en.wikipedia.org/wiki/Firefly_Aerospacehttps://www.space.com/the-universe/moon/were-on-the-moon-private-blue-ghost-moon-lander-aces-historic-lunar-landing-for-nasahttps://www.bbc.com/news/articles/cd9208qv1kzohttps://www.reuters.com/technology/space/us-firm-fireflys-blue-ghost-moon-lander-locks-lunar-touchdown-2025-03-02/https://www.nytimes.com/2025/02/26/science/intuitive-machines-second-moon-landing-launch-how-to-watch.htmlhttps://en.wikipedia.org/wiki/Lunar_south_polehttps://www.livescience.com/space/the-moon/how-far-away-is-the-moonhttps://en.wikipedia.org/wiki/Luna_2https://en.wikipedia.org/wiki/Moon_landinghttps://www.space.com/12841-moon-exploration-lunar-mission-timeline.htmlhttps://en.wikipedia.org/wiki/Luna_24 This is a public episode. 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This week we talk about arabica, robusta, and profit margins.We also discuss colonialism, coffee houses, and religious uppers.Recommended Book: On Writing and Worldbuilding by Timothy HicksonTranscriptLike many foods and beverages that contain body- or mind-altering substances, coffee was originally used, on scale at least, by people of faith, leveraging it as an aid for religious rituals. Sufis in what is today Yemen, back in the early 15th century, consumed it as a stimulant which allowed them to more thoroughly commit themselves to their worship, and it was being used by the Muslim faithful in Mecca around the same time.By the following century, it spread to the Levant, and from there it was funneled into larger trade routes and adopted by civilizations throughout the Mediterranean world, including the Ottomans, the Mamluks, groups in Italy and Northern Africa, and a few hundred years later, all the way over to India and the East Indies.Western Europeans got their hands on this beverage by the late 1600s, and it really took off in Germany and Holland, where coffee houses, which replicated an establishment type that was popularized across the Muslim world the previous century, started to pop up all over the place; folks would visit these hubs in lieu of alehouses, subbing in stimulants for depressants, and they were spaces in which it was appropriate for people across the social and economic strata to interact with each other, playing board games like chess and backgammon, and cross-pollinating their knowledge and beliefs.According to some scholars, this is part of why coffee houses were banned in many countries, including England, where they also became popular, because those up top, including but not limited to royalty, considered them to be hotbeds of reformatory thought, political instability, and potentially even revolution. Let the people hang out with each other and allow them to discuss whatever they like, and you end up with a bunch of potential enemies, and potential threats to the existing power structures.It’s also been claimed, and this of course would be difficult to definitively prove, though the timing does seem to line up, that the introduction of coffee to Europe is what led to the Enlightenment, the Age of Reason, and eventually, the Industrial Revolution. The theory being that swapping out alcohol, at least during the day, and creating these spaces in which ideas and understandings and experiences could be swapped, without as much concern about social strata as in other popular third places, spots beyond the home and work, that allowed all sorts of political ideas to flourish, it helped inventions become realized—in part because there were coffee houses that catered to investors, one of which eventually became the London Stock Exchange—but also because it helped people organize, and do so in a context in which they were hyper-alert and aware, and more likely to engage in serious conversation; which is a stark contrast to the sorts of conversations you might have when half- or fully-drunk at an alehouse, exclusively amongst a bunch of your social and economic peers.If it did play a role in those movements, coffee was almost certainly just one ingredient in a larger recipe; lots of variables were swirling in these areas that seem to have contributed to those cultural, technological, economic, and government shifts.The impact of such beverages on the human body and mind, and human society aside, though, coffee has become globally popular and thus, economically vital. And that’s what I’d like to talk about today; coffee’s role in the global economy, and recent numbers that show coffee prices are ballooning, and are expected to balloon still further, perhaps substantially, in the coming years.—For a long while, coffee was a bit of a novelty outside of the Muslim world, even in European locales that had decently well-established coffeehouses.That changed when the Dutch East India Company started importing the beans to the Netherlands in the early 17th century. By the mid-1600s they were bringing commercial-scale shipments of the stuff to Amsterdam, which led to the expansion of the beverage’s trade-range throughout Europe.The Dutch then started cultivating their own coffee crops in colonial territories, including Ceylon, which today is called Sri Lanka, and the island of Java. The British East India Company took a similar approach around the same time, and that eventually led to coffee bean cultivation in North America; though it didn’t do terribly well there, initially, as tea and alcoholic beverages were more popular with the locals. In the late 18th century, though, North Americans were boycotting British tea and that led to an uptick in coffee consumption thereabouts, though this paralleled a resurgence in tea-drinking back in Britain, in part because they weren’t shipping as much tea to their North American colonies, and in part because they conquered India, and were thus able to import a whole lot more tea from the thriving Indian tea industry.The Americas became more important to the burgeoning coffee trade in the mid-1700s after a French naval officer brought a coffee plant to Martinique, in the Caribbean, and that plant flourished, serving as the source of almost all of today’s arabica coffee beans, as it was soon spread to what is today Haiti, and by 1788, Haiti’s coffee plantations provided half the world’s coffee.It’s worth remembering that this whole industry, the portion of it run by the Europeans, at least, was built on the back of slaves. These Caribbean plantations, in particular, were famously abusive, and that abuse eventually resulted in the Haitian revolution of 1791, which five years later led to the territory’s independence.That said, coffee plantations elsewhere, like in Brazil and across other parts of South and Central America, continued to flourish throughout this period, colonialists basically popping into an area, conquering it, and then enslaving the locals, putting them to work on whatever plantations made the most sense for the local climate.Many of these conquered areas and their enslaved locals were eventually able to free themselves, though in some cases it took a long time—about a century, in Brazil’s case.Some plantations ended up being maintained even after the locals gained their freedom from their European conquerers, though. Brazil’s coffee industry, for instance, began with some small amount of cultivation in the 1720s, but really started to flourish after independence was won in 1822, and the new, non-colonialist government decided to start clearing large expanses of rainforest to make room for more, and more intensive plantations. By the early 1900s, Brazil was producing about 70% of the world’s coffee exports, with their neighbors—Colombia and Guatemala, in particular—making up most of the rest. Eurasian producers, formerly the only places where coffee was grown, remember, only made up about 5% of global exports by that time.The global market changed dramatically in the lead-up to WWII, as Europe was a primary consumer of these beans, and about 40% of the market disappeared, basically overnight, because the continent was spending all their resources on other things; mostly war-related things.An agreement between South and Central American coffee producing countries and the US helped shore-up production during this period, and those agreements allowed other Latin American nations to develop their own production infrastructure, as well, giving Brazil more hemispheric competition.And in the wake of WWII, when colonies were gaining their independence left and right, Ivory Coast and Ethiopia also became major players in this space. Some burgeoning Southeast Asian countries, most especially Vietnam, entered the global coffee market in the post-war years, and as of the 2020s, Brazil is still the top producer, followed by Vietnam, Indonesia, Colombia, and Ethiopia—though a few newer entrants, like India, are also gaining market share pretty quickly.As of 2023, the global coffee market has a value of around $224 billion; that figure can vary quite a lot based on who’s numbers you use, but it’s in the hundreds of billions range, whether you’re looking just at beans, or including the ready-to-drink market, as well, and the growth rate numbers are fairly consistent, even if what’s measured and the value placed on it differs depending on the stats aggregator you use.Some estimates suggest the market will grow to around $324 billion, an increase of around $100 billion, by 2030, which would give the coffee industry a compound annual growth rate that’s larger than that of the total global caffeinated beverage market; and as of 2023, coffee accounts for something like 87% of the global caffeinated beverage market, so it’s already the dominant player in this space, and is currently, at least, expected to become even more dominant by 2030.There’s concern within this industry, however, that a collection of variables might disrupt that positive-seeming trajectory; which wouldn’t be great for the big corporations that sell a lot of these beans, but would also be really bad, beyond shareholder value, for the estimated 25 million people, globally, who produce the beans and thus rely on the industry to feed their families, and the 100-110 million more who process, distribute, and import coffee products, and who thus rely on a stable market for their paychecks.Of those producers, an estimated 12.5 million work on smaller farms of 50 acres or less, and 60% of the world’s coffee is made by people working on such smallholdings. About 44% of those people live below the World Bank’s poverty metric; so it’s already a fairly precarious economic situation for many of the people at the base-level of the production system, and any disruptions to what’s going on at any level of the coffee industry could ripple across that system pretty quickly; disrupting a lot of markets and local economies, alongside the human suffering such disruptions could cause.This is why recent upsets to the climate that have messed with coffee crops are causing so much anxiety. Rising average temperatures, bizarre cold snaps, droughts, heavy and unseasonable rainfalls—in some cases all of these things, one after another—combined with outbreaks of plant diseases like coffee rust, have been putting a lot of pressure on this industry, including in Brazil and Vietnam, the world’s two largest producers, as of the mid-2020s.In the past year alone, because of these and other externalities, the price of standard-model coffee beans has more than doubled, and the specialty stuff has seen prices grow even more than that.Higher prices can sometimes be a positive for those who make the now-more-expensive goods, if they’re able to charge more but keep their expenses stable.In this case, though, the cost of doing business is going up, because coffee makers have to spend more on protecting their crops from diseases, losing crops because of those climate issues, and because of disruptions to global shipping channels. That means profit margins have remained fairly consistent rather than going up: higher cost to make, higher prices for consumers, about the same amount of money being made by those who work in this industry and that own the brands that put coffee goods on shelves.The issue, though, is that the cost of operation is still going up, and a lot of smallholders in particular, which again, produce about 60% of all the coffee made, worldwide, are having trouble staying solvent. Their costs of operation are still going up, and it’s not a guarantee that consumers will be willing to continue spending more and more and more money on what’s basically a commodity product; there are a lot of caffeinated beverages, and a lot of other types of beverage they could buy instead, if coffee becomes too pricy.And at this point, in the US, for instance, the retail price of ground roast coffee has surpassed an average of $7 per pound, up 15% in the past year. Everyone’s expecting that to keep climbing, and at some point these price increases will lose the industry customers, which in turn could create a cascading effect that kills off some of these smaller producers, which then raises prices even more, and that could create a spiral that’s difficult to stop or even slow.Already, this increase in prices, even for the traditionally cheaper and less desirable robusta coffee bean, has led some producers to leave coffee behind and shift to more consistently profitable goods; many plantations in Vietnam, for instance, have converted some of their facilities over to durian fruit, instead of robusta, and that’s limited the supply of robusta, raising the prices of that bean, which in turn is causing some producers of robusta to shift to arabica, which is typically more expensive, and that’s meant more coffee on the market is of the more expensive variety, adding to those existing price increases.The futures markets on which coffee beans are traded are also being upended by these pricing issues, resulting in margin calls on increasingly unprofitable trades that, in short, have necessitated that more coffee traders front money for their bets instead of just relying on short positions that have functioned something like insurance paid with credit based on further earnings, and this has put many of them out of business—and that, you guessed it, has also resulted in higher prices, and more margin calls, which could put even more of them out of business in the coming years.There are ongoing efforts to reorganize how the farms at the base on this industry are set up, both in terms of how they produce their beans, and in terms of who owns what, and who profits, how. This model typically costs more to run, and results in less coffee production: in some cases 25% less. But it also results in more savings because trees last up to twice as long, the folks who work the farms are much better compensated, and less likely to suffer serious negative health impacts from their labor, and the resultant coffee is of a much higher quality; kind of a win win win situation for everyone, though again, it’s less efficient, so up till now the model hasn’t really worked beyond some limited implementations, mostly in Central America.That could change, though, as these larger disruptions in the market could also make room for this type of segue, and indeed, there has apparently been more interest in it, because if the beans are going to cost more, anyway, and the current way of doing things doesn’t seem to work consistently anymore, and might even collapse over the next decade if something doesn’t change, it may make sense, even to the soulless accounting books of major global conglomerates, to reset the industry so that it’s more resilient, and so that the people holding the whole sprawling industry up with their labor are less likely to disappear some day, due to more favorable conditions offered by other markets, or because they’re simply worked to death under the auspices of an uncaring, fairly brutal economic and climatic reality.Show Noteshttps://www.nytimes.com/2025/02/22/business/coffee-prices-climate-change.htmlhttps://web.archive.org/web/20100905180219/https://www.web-books.com/Classics/ON/B0/B701/12MB701.htmlhttps://www.jstor.org/stable/1246099?origin=crossrefhttps://www.theguardian.com/australia-news/2025/jan/07/coffee-prices-australia-going-up-cafe-flat-white-costhttps://www.bbc.com/news/articles/c5y37dvlr70ohttps://www.nytimes.com/2024/12/28/business/coffee-prices-climate-change.htmlhttps://markets.businessinsider.com/news/commodities/coffee-prices-food-inflation-climate-change-eggs-bank-of-america-2025-2https://www.statista.com/statistics/675807/average-prices-arabica-and-robusta-coffee-worldwide/https://www.ft.com/content/9934a851-c673-4c16-86eb-86e30bbbaef3https://www.cnn.com/2024/08/01/business/your-coffees-about-to-get-more-expensive-heres-why/index.htmlhttps://www.marketresearchfuture.com/reports/caffeinated-beverage-market-38053https://www.grandviewresearch.com/industry-analysis/caffeinated-beverage-markethttps://en.wikipedia.org/wiki/Coffeehttps://en.wikipedia.org/wiki/English_coffeehouses_in_the_17th_and_18th_centurieshttps://en.wikipedia.org/wiki/Coffeehousehttps://en.wikipedia.org/wiki/History_of_coffeehttps://sites.udel.edu/britlitwiki/the-coffeehouse-culture/https://www.openculture.com/2021/08/how-caffeine-fueled-the-enlightenment-industrial-revolution-the-modern-world.html This is a public episode. 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This week we talk about H5N1, fowl plague, and viral reservoirs.We also discuss the CDC, raw milk, and politics.Recommended Book: Nexus by Yuval Noah HarariTranscriptIn late-January of 2025, staff at the US Centers for Disease Control, the CDC, were told to stop working with the World Health Organization, and data, and some entire pages containing such data, and analysis of it, were removed from the CDC’s web presence—the collection of sites it maintains to provide information, resources, and raw research numbers and findings from all sorts of studies related to its remit.And that remit is to help the US public stay healthy. It provides services and guidelines and funding for research and programs that are meant to, among other things, prevent injury, help folks with disabilities, and as much as possible, at least, temper the impacts of disease spread.Its success in this regard has been mixed, historically, in part because these are big, complex, multifaceted issues, and with current technology and existing systems it’s arguably impossible to completely control the spread of disease and prevent all injury. But the CDC has also generally been a moderating force in this space, not always getting things right, itself, but providing the resources, monetary and otherwise, to entities that go on to do big, generally positive things across this range of interconnected fields.Many of the pages that were taken down from the CDC’s web presence in late-January popped back up within a few weeks, and now, according to experts from around the world, these pages have been altered—some mostly the same as they were, but others missing a whole lot of data, while still others now contain misinformation and/or polemic. A lot of that misinformation and political talking points are related to things the recently re-ascendent Trump administration has made a cornerstone of its ideological platform, including anti-trans policies and things that cast skepticism on vaccines, abortion, birth control, and even information related to sexually transmitted infections.Scientists doing research that is in any way connected to concepts like diversity, equality, and inclusivity—so-called DEI issues—have been forced to halt these studies, and research that even includes now-banned words in different contexts—words like gender, LGBT, and nonbinary—have likewise been halted, or in some cases banned altogether. Data sets and existing research that happen to include any reference to this collection of terms have likewise been pulled from the government’s publicly accessible archives; so some stuff actually connected to DEI issues, but initial looks into what’s been halted and cancelled shows that things like cancer research and other, completely non-political stuff, too, has been stopped because somewhere in the researchers’ paperwork was a word that is now not allowed by the new administration.All of which is part of a much bigger story, one that I won’t get into right now, as it’s still evolving, and is very much it’s own thing; that of the purge of government agencies that’s happening in the US right now, at the apparent behest of the president, and under the management of the world’s wealthiest person, Elon Musk, via his task force, the Department of Government Efficiency, or DOGE.This process and the policies underpinning it are facing a lot of legal pushback, even from other Republicans, in at least a few cases. But it’s also a story that’s evolving by the day, if not the minute, and the long-term ramifications are still up in the air; some are calling it the first move in an autogolpe, a coup from within, while others are calling it a hamfisted attempt to seem to be doing things, to be reducing expenses in the government, but in such a way that none of the actions will be particularly effective, and most will be countered by judicial decisions, once they catch up with the blitzkrieg-like speed of these potentially illegal actions.There’s been some speculation that this will end up being more of an albatross around the neck of the administration, than whatever it is they actually hope to accomplish with it—though of course there are just as many potentially valid concerns that, again, this is a grab for power, meant to centralize authority within the executive, with the president, and that, in turn could make it difficult for anyone but a Republican, and anyone but a staunch ally of Trump and his people, to ever win the White House again, at least for the foreseeable future.But right now, as all those balls are in the air and we’re waiting to see what the outcome of that flurry of activity will actually be, practically, I’d like to focus on one particular aspect of this culling of the CDC’s records, publicly available information, and staff.What I’d like to talk about today is bird flu, and what we think we know about its presence in the US right now, and how that presence is being felt by everyday people, already.—What we colloquially call bird flu, or sometimes avian flu, or the avian influenza, if you’re fancy, is actually a subtype of influenza called Influenza A virus subtype H5N1, or just H5N1.There have been many subtypes of bird flu over the generations, some of which have disappeared from the record (as far as we can tell, at least), while others are still tracked, but in animal populations in locations that make them low-risk, in terms of spreading beyond their host species.We’ve been studying various types of bird flu since at least the late-1800s, when researchers in Italy started looking into a disease colloquially called “fowl plague,” because it was afflicting chicken and other poultry flocks. This wasn’t the first time something that seems like it was probably this disease afflicted flocks and was recorded as having done so, but it was the first time such a plague was differentiated from bacterial diseases that were also prevalent in such poultry communities, and thus they could say it was something distinct from, for instance, fowl cholera, which was also pretty common back then.In the 1950s, it was confirmed that this avian flu was similar to flus that afflict humans, and in the 1970s, researchers figured out that the flus they were tracking in bird populations were diverse, in the sense that there were many subtypes, not just one universal disease.Today, we know that this type of Influenza A virus, of which H5N1 is just one example, are super common in wild waterfowl, and they’ve achieved this commonality, in part, by living in their respiratory and gastrointestinal systems without negatively effecting their host. So the birds can fly around and eat and peck at things without even getting a case of the bird sniffles, which means they’re less likely to isolate from their kin, which means they’re more likely to spread it to all of their friends.Waterfowl also tend to travel great distances, just as a matter of course, migrating across continents, in some cases, but in others simply flitting from lake to pond to puddle, looking for food.Domesticated birds, like chicken and ducks that are kept for their eggs or meat, tend to catch bird flu either by socializing with their wild kin, or by coming into contact with their feces, or surfaces that have been contaminated by their feces.In this way, traveling flocks of ducks and geese and seagulls, which maybe set down to get a drink or some food at a source of water in a bird meat facility, could infect a chicken directly, but just by flying overhead and pooping, they can do the same, as chickens will tend to peck around at the ground, and if that poop is somewhere nearby, boom, chicken infected, and then, in relatively short order, the whole coop is also infected.There are vaccines that can protect chickens and other domesticated birds from avian flu, but because of how widespread H5N1 in particular is, it mutates rapidly, so these vaccines are not a silver bullet. On top of that, buying and administrating them costs poultry companies more money, and because they might administer a vaccine that hasn’t kept up with the mutations of the disease, that could end up being a sunk cost; so the money question sometimes keeps poultry providers from vaccinating their flocks, but even those who do apply this layer of protection don’t always benefit from the investment as much as they would like.And birds that are thus infected spread the disease rapidly, but also tend to die in large numbers. The relatively chilled-out symptoms experienced by water fowl doesn’t always translate to other types of birds, so chickens will sometimes conk out pretty quickly, and on top of that, when bird flu gets into a poultry population and mutates within them, the new mutation of the disease might get out into the water fowl population, and that can then cause anywhere from mild flu symptoms to reliable death in those ducks and geese and such. So the version they have might be mundane, they give that mundane version to chickens, where it mutates into something else, and that new bird flu variant then goes back into the water fowl and, no longer mundane, kills them all.So part of the problem here, as is the case with any virulent, quick-spreading, treatment-resistant pathogen with large wild reservoirs where it can survive even when the populations we’re tracking are cured or culled, is that this thing evolves just really quickly. And that means anything we do, vaccines, killing infected populations or potentially infected populations, dividing flocks into smaller, easier to manage and segment groups, generally doesn’t keep up with the emergence of new versions of the disease.This can, in turn, result in new versions that spread even quicker, that are harder to detect, or which simply kill a lot faster.It can also lead to mutations that spread more readily to and within other species, including mammals.And that’s what seems to be happening in meat and dairy cattle, at the moment, in addition to some of the humans who work closely with birds and with cows.There have been reports over the past couple of years of folks in the US coming into close contact with infected birds or cows contracting bird flu, or testing positive for bird flu antibodies, which means the disease hit them, but they either managed to fend it off or had it for a while, and then their immune system took care of it—even if they didn’t have symptoms.Such infections, those we know about for certain, anyway, as opposed to having hints of suggestions of them, still seem to be relatively small in number. A recent study, which the CDC was eventually able to publish, after those pulled pages and hidden data sets started to come back online, indicates that of 150 cow veterinarians tested for evidence of bird flu infection, only three had such evidence.That said, two of those three did not have any known exposure to bird flu-infected animals, and one didn’t even practice in a state with any known infections. So this is a mixed outcome; good, in a sense, that infection evidence in humans who come into contact with potentially infected animals isn’t more widespread, but alarming in the sense that those who did have such infection indicators were mostly doing work that wouldn’t seem to have put them at risk of infection, based on what our data tell us, and yet, they were put at such risk. Which suggests our sense of how widespread this thing has gotten is probably way, way off at this point; the official data on where bird flu is, and even what animals it’s infecting, is perhaps uselessly out of date in the US.So at this point, the official CDC data say there have been 68 cases of bird flu in humans in the US since 2024, and one of those infections has resulted in death.41 of those infections were the result of exposure to dairy cattle, 23 were from exposure to poultry farms or poultry meat production facilities, 1 was from another unspecified animal contact, and 3 were from unknown sources.The major concern, here, is that these numbers suggest bird flu isn’t having a hard time moving from birds to other mammals to humans, at this point, so that aforementioned 68 cases in humans since 2024 could be a vast undercount; we might already be in the early days of a new pandemic, and we don’t realize it because we simply don’t have the data.I think it’s worth noting, though, that the biggest bird-flu related threat, the biggest one we have data for, anyway, globally, is people who are coming into contact with infected animals, or in some cases consuming their meat or milk.Most of the officially documented cases of bird flu in humans, since the early 2000s, have been in Southeast Asia, and there have been around 950 humans infections and just over 460 deaths caused by various types of bird flu since 2003, according to World Health Organization numbers; most of those deaths were in in the early 2000s.So not a ton of either infections or death over that span of time, but that also means this disease has a fatality rate of something like 50% in humans; around half the people who contract it die. Which is not great. And that’s part of why the concern about this type of flu may to seem a little out of proportion to the recent infection numbers—if it mutates, evolving a version of itself that is transmissible between humans so that we see transmission similar to what we see in bird flocks, that would be very, very bad.At the moment, though, even if something like that never manifests, poultry and dairy industries could suffer significant losses as a consequence of this animal-world pandemic, and to some degree, they already have. Especially those in the US.This is spreading in flocks globally, to a limited degree, but US poultry, beef, and dairy industries are being absolutely clobbered by the dual impact of infections that are necessitating additional protections against infection, and the increasing number of mass-cullings—killing entire flocks, because one of their number has been infected—that have been necessary in recent years. This has put a lot of such companies out of business, and the amount of stock, of animals, that have had to be killed as a precautionary measure, to keep one or a few infections from spreading more widely, have been staggering.Egg prices have been a semi-reliable indicator of inflation rates in the US for a long time, but the investments required and cullings committed have ballooned egg prices in recent months, hitting record highs and stoking outcries both within the industry, and amongst consumers who have seen average egg prices more than double between late-2023 and January 2025; and that’s when eggs have been reliably available on supermarket shelves, which hasn’t always been the case during this period.On top of that, there are heightening concerns about bird flu in the egg, meat, and milk supply; US government agencies have said that cooking meat appropriately, to the recommended temperatures, kills pathogens, including bird flu, and the pasteurization of milk, which basically means rapidly heating it, briefly, to kill germs, has been shown to kill the bird flu virus. But a purity- or naturalism-based movement, often closely tied with the anti-vaccine movement, has seen a surge in popularity in the US, and many people who subscribe to that ideological have also become supporters of consuming raw milk, which isn’t pasteurized, and thus this virus, and other pathogens, can survive in it, potentially becoming a new vector of infection for humans.So there’s a lot going on in the US government right now that’s making tracking such things difficult, and trusting the information even more so, in some cases. And that could remain the case, and could become even more muddled, based on the stated beliefs of some of the people who are being put in charge of these agencies, the studies they conduct, the things they track, and the information they divulge.But at the base level, right now at least, it looks like bird flu has become a persistent reality within the US poultry and cattle industries, that most humans probably don’t have a lot to worry about, yet, but that this could change rapidly, if those industries aren’t able to get things back under control, as that would provide more viral reservoirs for this disease in which it can mutate, and reservoirs that are closer to large populations of humans than the wild waterfowl flocks that otherwise serve as the largest stockpile of these viral colonies.Show Noteshttps://www.nytimes.com/2025/01/23/nyregion/long-island-duck-farm-bird-flu.html?unlocked_article_code=1.rk4.oY1r.MEdP-NpwG4owhttps://doc.woah.org/dyn/portal/digidoc.xhtml?statelessToken=USHi9N-71EDqawTHVX0wYrVCjSlZ8B8vx8qFYu3Ngcw=&actionMethod=dyn%2Fportal%2Fdigidoc.xhtml%3AdownloadAttachment.openStatelesshttps://en.wikipedia.org/wiki/Avian_influenzahttps://en.wikipedia.org/wiki/Influenza_A_virus_subtype_H5N1https://www.cdc.gov/mmwr/volumes/74/wr/mm7404a2.htmhttps://www.cdc.gov/bird-flu/situation-summary/index.htmlhttps://www.npr.org/sections/shots-health-news/2025/02/13/nx-s1-5296672/cdc-bird-flu-study-mmwr-veterinarianshttps://arstechnica.com/health/2025/02/h5n1-testing-in-cow-veterinarians-suggests-bird-flu-is-spreading-silently/https://cdn.who.int/media/docs/default-source/wpro---documents/emergency/surveillance/avian-influenza/ai_20250131.pdfhttps://www.washingtonpost.com/business/2025/02/15/bird-flu-influenza-eggs/https://archive.ph/QDcZihttps://www.washingtonpost.com/dc-md-va/2025/02/15/return-to-office-mandate-trump-desks/https://arstechnica.com/health/2025/02/the-country-is-less-safe-cdc-disease-detective-program-gutted/https://arstechnica.com/health/2025/02/a-sicker-america-senate-confirms-robert-f-kennedy-jr-as-health-secretary/https://www.npr.org/sections/shots-health-news/2025/02/06/nx-s1-5288113/cdc-website-health-data-trumphttps://www.vox.com/future-perfect/399319/trump-cdc-health-data-removed-obesity-suicidehttps://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Prevention This is a public episode. 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The podcast tackles critical topics like planetary defense against asteroids and highlights the potential collision risk posed by asteroid 2024 YR4. It discusses the DART mission, which successfully tested asteroid deflection, and reflects on past events like the dinosaur extinction caused by an asteroid impact. The conversation also delves into the origins of the Moon, theorizing how a Mars-sized object named Theia may have collided with Earth. Lastly, an intriguing exploration of a sci-fi novel featuring AI and black magic adds a creative twist to the discussion.

Dive into the tumultuous world of U.S. protectionism! The discussion highlights tax hikes and tariff strategies aimed at both allies and adversaries. Delve into the madman theory of negotiation and its surprising implications. The impact of these protective measures on imports from Canada, Mexico, and China uncovers both the intended benefits for domestic industries and the unintended costs for consumers. Explore how these policies are shaping the economic landscape and affecting American households amidst ongoing global competition.

This week we talk about OpenAI, the Stargate Project, and Meta.We also discuss o1, AGI, and efficiency.Recommended Book: The Shortest History of Economics by Andrew LeighTranscriptOne of the bigger news items these past few weeks, in terms of the numbers involved, at least, was an announcement by US tech company OpenAI that it will be starting a new company called the Stargate Project, which will boast a total $500 billion-worth of investment, the first $100 billion of which will be deployed immediately.All that money will be plowed into artificial intelligence infrastructure, especially large-scale computing clusters of the kind required to operate AI systems like ChatGPT, and the funds are coming from OpenAI itself, alongside SoftBank, Oracle, and MGX, with Arm, Microsoft, and NVIDIA also involved as technology partners.It’s a big, beefy enterprise, in other words, and the fact that this has been in the works since 2022, it’s official announcement seemingly held back so that newly returned US President Trump could announce it as part of his administration’s focus on American infrastructure and AI dominance, didn’t dim the glow of the now-formal announcement of what looks to be a truly audacious bet on this collection of technologies, doubts about the players involved having the money they’ve promised ready, notwithstanding.That said, this is far from the only big, billions and tens of billions-scale wager in this space right now.Last year, Microsoft announced a $30 billion infrastructure fund, in collaboration with BlackRock, and earlier in January of 2025, Google’s CEO said that his company would spend about $80 billion on the same, separate from their commitment to Stargate.Meta’s CEO Mark Zuckerberg recently divulged that the company would spend somewhere between $60-65 billion on capital expenditures, mostly on AI, in 2025—that’s up about 70% from 2024 spending.And last December, xAI CEO Elon Musk announced that his company had just raised a fresh $6 billion to build-out more compute infrastructure; and his role at the head of that company is assumed to be part of why he trash-talked the aforementioned Stargate effort, though there’s also a long-simmering animus between him and OpenAI CEO Sam Altman, and the fact that everyone seems to be trying to get in good with Trump—which is probably part of why many of these announcements are happening right now: Trump is in the position to king-make or cripple their respective efforts, so whomever can get in good with him, or best with him, might have an advantage in what’s become a very expensive knife-fight in this most rapidly burgeoning of tech investment loci.There’s a reason there’s so much money flowing to this space, announcements aside, right now, too: the chatbots that’ve emerged from the GPT, LLM era of AI systems are impressive and useful for many things, and AI powered bots could even replace other sorts of user interfaces, like search engines and apps, with time.But there are also some more out-there efforts that are beginning to bear fruit.AI is helping Google’s DeepMind team discover new materials at an astonishing rate—including both the discovery and the testing of their properties, stage.AI systems are also being used to accelerate drug discovery and trial design, and a company (backed by OpenAI’s Altman) is trying to extend human life by a decade using exactly this process.Meta has a new tool that enables real-time speech and text translation between up to (depending on the type of translation being done) 101 different languages, and we’re even seeing AI systems meant to detect and track small, otherwise overlooked infrastructure issues, like potholes, at a local level.And to be clear, this is far from a US government and US-based tech company effort: government agencies, globally, are scrambling to figure out how to regulate AI in such a way that harms are limited but research, investment, and innovation isn’t hampered, and entities all over the place are plowing vast wealth into these projects and their related infrastructure; India’s Reliance Group recently announced it will build what could become the world’s biggest data center, planned to go into operation within two years—a project with an estimated price tag of somewhere between $20-30 billion. And that, all by itself, would more than triple the country’s data center footprint.So this scramble is big but also global, and it’s partly motivated by the gold rush-like desire to be first to something like artificial general intelligence, or AGI, which would theoretically be capable of doing basically anything a human can do, and possibly better.That could, depending on the cost of developing and running such a system, put a lot of humans out of work, scrambling the world and its economy it all sorts of ways, and causing untold disruptions and maybe even havoc. That chaos could be very good for business, however, for whomever is able to sell this new commodity of labor to everyone else, replacing most or all of their employees with digital versions of the same—each one cheaper than a comparable human would be to perform the same work.What I’d like to talk about today, though, is a challenge to the currently dominant theory of operation in this industry, and why a new family of AI models is sending many of the tech world’s biggest players into a panic.—A lot of the news coming out of the AI world, at the moment, is focused on what are called agents, or agentic AI.An AI agent is a system that can operate with agency: it can do things on its own. So you could have one of these systems, something you might engage with like a chatbot, but one capable of taking complex instructions, and you could tell it to find the best e-bike for your use case, and it would then take your info, your context, your needs into consideration, do a bunch of research, and maybe even buy and set up the delivery of the bike for you, with limited check-ins required on your part.A truly agentic AI would operate as sort of a personal assistant, capable of doing anything a human personal assistant would be able to do—sans the physical body, of course—though that could come later.This is generally seen as a step on the path toward AGI, and perhaps even AI superintelligence, which would be AGI that’s massively smarter and better at everything than any human, all of which also moves these things from the realm of “tool to be wielded by humans”, toward something more like a robot that can do all the things it’s supposed to do, without a human present; a different category of product and service.This type of AI, with this level of capability, is generally considered to be really expensive to make—to train, in the industry parlance—and to use, because of how much computing power is required to run the code required to leverage these sorts of smarts.In 2020, ChatGPT-3 cost somewhere between $2-4 million to train. Its successor, ChatGPT-4, which was deployed in 2023 cost more like $75-100 million.That’s a lot more money. The model is a lot more powerful, granted, but the scaling laws that have seemed to be at play in this space, the increase in cost between generations of AI, have suggested that getting another capability leap comparable to what we saw between ChatGPT-3 and 4 would cost something like a billion dollars, and even that might give us a jump, but not the same staggering growth in performance that we saw between those generations.The are arguments to be made that the size and type of dataset matter, here, and that the culling of said datasets, and how the models are tuned to use the data and respond to things are also vital, perhaps as much or more so than the initial training.Companies like OpenAI have also figured out all sorts of ways to wring more performance out of less training and compute, including things like allowing the AI to reference other sources—basically doing a web search or checking wikipedia and similar references, in addition to knowledge that already exists in its training dataset—or allowing them to “think” longer, giving them more time to work through a problem or task, which tends to lead to better results, even with weaker—in terms of training and compute power—systems.Ultimately, though, most of these companies seem to be assuming that more money churned into more infrastructure and compute capability will be necessary, to make these things better at doing science and solving global problems, at maybe running military campaigns-scale issues, but also at replacing humans as employees—creating more agentic, ultimately, they hope, AGI-level systems.So that’s a big part of why there’s so much money sloshing around in the AI world right now: all these companies want to build the biggest, baddest model, they would love to develop AGI and put everyone out of work, and they assume that more money will equal more potency, so if they don’t start building now, they risk being left behind in a couple of years when all their competitor’s snazzy new assets are available and powering their AI systems—which could allow their competitors to get there first, and there’s a general assumption that it’s important to be first or close to first on this, as truly AGI-level, or beyond AI could theoretically allow them to refine their own systems faster, which could secure them a permanent lead over their opposition, moving forward.Though the US is generally considered to be in the prime position in that particular race, so far, China has been investing a lot in this space, as well, and many of their investments have been similar to those of their Western competitors; dropping lots of money on the issue, building big infrastructure, and so on.They’ve been hindered quite a lot by Western, especially US, sanctions, though, and that’s made it more difficult, not impossible, but more time-consuming and expensive for them, to get the highest-end chips optimized for AI systems, like those made by NVIDIA.This has forced them to take some different approaches to their international peers, and while many of those approaches still involve huge price tags and build-outs, some of them have instead focused on a less-celebrated aspect of the industry: that of smaller models that are a lot more efficient, achieving gains that are out of proportion to their training and operating costs.Case in point are the new DeepSeek R1 models, which are a collection of AI models that were cheap to make, released free for public use and editing, and which seem to beat OpenAI’s o1 reasoning models—which are very much not free, and which were a lot more expensive to develop—on some of the most widely used performance benchmarks.These models apparently cost something like 3-5% what OpenAI spent on its o1 model, a mere $5.6 million, and again, they’re free to use, but also open source, so anyone who wants to build their own business or new AI atop them can do so; and their API costs are more than 90% lower than o1’s, so it’s also a lot cheaper to use these models for development purposes than OpenAI’s options.This isn’t the first time a Chinese company has taken a look at what folks are doing in the west and then massively undercut their efforts by amplifying the efficiency many fold. Also, again, there’s a constraint on Chinese companies’ ability to get the latest and greatest AI hardware, which incentivizes this path of development, and they also have a super competitive tech industry in China, which tends to force a lot of their sub-industries, like batteries and solar panels, to iterate rapidly and push costs as low as functionally possible.This family of models was made as kind of a side project by someone who’s been competing within that somewhat brutal evolutionary context, and the rest of the world, by comparison, just hasn’t had the same forcing functions influencing its development path—so this level of efficiency with this level of performance has been, up to this point, unheard of. And as a result, these DeepSeek models have sent the US and other western tech industries into a tizzy.And it makes sense that these people would be panicking: they have spent, and are intending to continuing spending heavily on next-gen AI infrastructure, and this type of model, trained for basically nothing, demonstrating this level of performance? It calls all those investments into question, even to the point that some commentators—without evidence, so there’s no reason to believe this is the case—have wondered out loud if this might be some kind of psyop by China to kill the US’s AI industry, basically making it look like a bad investment, if these kinds of results can be achieved so inexpensively elsewhere.Again, that’s almost certainly not what’s happening here, but these models have reportedly landed like a live hand grenade in the offices of the US AI industry, with folks in big tech companies frantically trying to figure out how DeepSeek does what it does, and then surreptitiously copying whatever they can to try to get ahead of this, build their own version of the same and maybe work those findings into their planned investments.Meta in particular has apparently been on edge about this, as they’ve tried to own the free, open AI model space with their Llama family of AI models; which have been generally well received, but apparently DeepSeek’s earlier model, v3, was already messing with their heads, surpassing what they were able to do with llama, and this new family, the R1 family, has them worried they won’t be able to hold onto that position, and might not even be able to compete, despite their tens of billions of dollars worth of investment.What’s more, something this effective and efficient can be run by a lot of companies that would otherwise have had to rely on entities like OpenAI and Meta, which have the computing infrastructure—all those big buildings they’re constructing at a frantic rate and high cost—to handle the larger models.Non-AI companies that want to use these systems, though, could theoretically just buy their own, smaller setup and run their own AI, in-house, which would alleviate some security concerns related having all that stuff processed off-site, but it would also almost certainly be cheaper over the long-term, compared to just paying someone like Google or OpenAI for their services, forever.All of this has resulted in a fair bit of volatility in the US stock market, which has been heavily reliant on AI-oriented tech stocks for growth over the past year, with NVIDIA in particular taking a hit, due to the possibility that heavyweight chips might not be vital to creating high-end AI systems.There are downsides to DeepSeek, of course, perhaps most obviously that this model, having come from China, is laden with censorship about exactly the sorts of things you would expect: Tianammen Square, China’s government and it’s many well-documented abuses, and so on. There could be more issues, too, that the folks who look into such things will discover after spending more time with this family of AI, though thus far, the response has generally been very positive, even with those caveats.Either way, this challenges the assumption that the US or any other country can stifle another nation’s, or group’s, AI ambitions with hardware sanctions.It also suggests that, if this general approach could be replicated, we may see a lot more models that are cheap and easy to run, but which are also effective enough for a lot of those next-step, higher-end utilities. And that would allow AI to spread a lot more quickly, more people being able to wield more powerful tools, while also potentially doing away with many of the moats—the defendable, unique value propositions—these larger tech companies assumed they would have by building and controlling the pricy infrastructure they assumed would be necessary to spin-up AI systems of that calibre.Show Noteshttps://www.microsoft.com/en-us/research/story/ai-meets-materials-discovery/https://semianalysis.com/2025/01/23/openai-stargate-joint-venture-demystified/https://openai.com/index/announcing-the-stargate-project/https://techcrunch.com/2025/01/24/stargate-will-use-solar-and-batteries-to-power-100b-ai-venture/https://www.ft.com/content/4541c07b-f5d8-40bd-b83c-12c0fd662bd9https://www.politico.com/news/2025/01/23/trump-staff-musk-conflict-00200311https://www.nytimes.com/2024/12/24/technology/elon-musk-xai-funding.htmlhttps://www.cnbc.com/2025/01/22/trump-had-phone-call-with-openais-sam-altman-last-week.htmlhttps://www.whitehouse.gov/presidential-actions/2025/01/removing-barriers-to-american-leadership-in-artificial-intelligence/https://apnews.com/article/trump-ai-artificial-intelligence-executive-order-eef1e5b9bec861eaf9b36217d547929chttps://restofworld.org/2025/global-ai-regulation-big-tech/https://www.wsj.com/tech/ai/meta-spending-ai-facebook-data-centers-9452a88fhttps://www.reuters.com/technology/meta-invest-up-65-bln-capital-expenditure-this-year-2025-01-24/https://www.bloomberg.com/news/articles/2025-01-23/billionaire-mukesh-ambani-plans-world-s-biggest-data-center-in-india-s-gujarat?embedded-checkout=truehttps://www.bloomberg.com/news/articles/2025-01-24/apple-enlists-company-veteran-kim-vorrath-to-help-fix-ai-and-siri?embedded-checkout=truehttps://www.ft.com/content/25a473ea-9f87-474a-8729-bc5287df853ahttps://spectrum.ieee.org/machine-translationhttps://techcrunch.com/2025/01/24/elevenlabs-has-raised-a-new-round-at-3b-valuation-led-by-iconiq-growth-sources-say/https://www.bloomberg.com/news/articles/2025-01-24/vc-lightspeed-bets-big-on-ai-megadeals-backing-anthropic-xai-mistralhttps://www.ft.com/content/7dcd4095-717e-49f8-8d12-6c8673eb73d7https://www.nytimes.com/2025/01/23/technology/ai-test-humanitys-last-exam.htmlhttps://every.to/chain-of-thought/we-tried-openai-s-new-agent-here-s-what-we-foundhttps://www.platformer.news/openai-operator-ai-agent-hands-on/https://techcrunch.com/2025/01/23/openai-launches-operator-an-ai-agent-that-performs-tasks-autonomously/https://www.axios.com/2025/01/19/ai-superagent-openai-metahttps://blog.google/technology/google-deepmind/google-gemini-ai-update-december-2024/https://arstechnica.com/ai/2025/01/china-is-catching-up-with-americas-best-reasoning-ai-models/https://www.macrumors.com/2025/01/27/deepseek-ai-app-top-app-store-ios/https://www.statista.com/chart/33114/estimated-cost-of-training-selected-ai-models/https://sherwood.news/tech/a-free-powerful-chinese-ai-model-just-dropped-but-dont-ask-it-about/https://www.axios.com/2025/01/17/deepseek-china-ai-modelhttps://www.nytimes.com/2025/01/23/technology/deepseek-china-ai-chips.htmlhttps://archive.ph/WMUbbhttps://x.com/pmarca/status/1882719769851474108https://venturebeat.com/ai/tech-leaders-respond-to-the-rapid-rise-of-deepseek/https://archive.ph/vDsQ4https://archive.ph/CrbGOhttps://x.com/nealkhosla/status/1882859736737194183https://x.com/samfbiddle/status/1882882950368473161https://x.com/samfbiddle/status/1882884223008493887 This is a public episode. 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