Beware of Biased Billionaires

It comes as no surprise that all of the media hype around an AI apocalypse and AI Doomerism got a lot of attention in this week’s mailbag.

In this issue, I tackle three related questions that come at the issues from several different angles, enabling us to reach a much deeper understanding about what’s going on, what’s true, and what’s not.

For anyone interested or curious about this topic, I definitely recommend reading this week’s AMA in full. These are very important issues. And what we’re being fed by most of the media is completely different than what is happening behind the scenes, and for that matter, what the majority of the AI industry is thinking and practicing.

We’re going to stay objective, keep a level head, and continue to track these developments as closely as we can.

Staying on top of all this technological development is important not only from an investment perspective, but also to maintain our sanity by understanding what’s real and what’s not.

Have a great weekend,

Jeff

The Truth Behind the AI Apocalypse Comes Out

Mr. Brown,

Thank you very much for this deeper dive into the Jason Coxon story. I was puzzled by the lack of information on him in the original news stories. Your report explains so much! Unfortunately, we seem to be in a period of dark social mood (encouraged, I believe, by the media). People are quick to take up the negative side of the news. It is like watching a horror movie.

Anyway, thanks again. I have always appreciated your insights over the years.

– Julia B.

Hi Julia.

So much has transpired and been uncovered since I wrote about the Coxon story on September 10. I wish I could say differently, but what’s really going on behind the curtains is so much worse.

It would be simple and convenient for us to just chalk up the story to “fear sells,” and the media is just doing it for the clicks and engagement to drive up advertising revenues. Sadly, that’s not the case.

Over the last week, we have discovered that this is a massive, well-coordinated psychological operation (psyop) carried out by some powerful billionaires – in cooperation with some prominent political figures – who want to gain control of this powerful technology for both financial gain and societal control. It is truly something that feels like it is out of some dystopian science fiction novel.

To be very clear, this psyop is designed and well-funded. Behind it are two tech billionaires – Dustin Moskovitz and Jaan Tallinn. Moskovitz was a cofounder of Facebook, founder of Asana, and was an early investor in Anthropic. Tallinn was the founder of Skype, which was acquired by Microsoft for $8.5 billion.

Both billionaires are part of the Effective Altruism “movement,” which is often referred to as cult-like. The EA movement originally started as an “earn to give” ideology, which means earn as much money as possible so that you can give most of it away and have an impact.

Sam Bankman-Fried was part of the EA movement, and as we learned, he was the perpetrator of one of the largest financial frauds in history through FTX and associated ventures.

Moskovitz founded a venture foundation called Good Ventures Foundation, which in turn funded Coefficient Giving (formerly called Open Philanthropy), which in turn has been funding AI doomerism via a number of other non-profits.

It gets worse.

Coefficient Giving is the largest funder of the Tarbell Center for AI Journalism. And this organization has the Tarbell Fellowship, which literally funds individual journalists to push the AI doomerism narrative.

It actually pays their salaries at major media outlets. Have a look at the placements below:

Source: X @brianchau57

This EA movement has bought and paid for the media. They have “people” everywhere. This is precisely why the Coxon story and all the calls for heavy AI regulation and to slow down development received so much coverage so quickly.

The most important reality for us to understand is that this psyop is not a grassroots movement at all. It is being controlled by a very small group of wealthy and power-hungry people. It does not represent the industry at large in any way.

Both Anthropic and OpenAI are the primary entities that are pushing for regulatory capture. The people behind these companies are ideologically driven (not in a good way), and they are caught in a difficult competitive position. They have spent hundreds of billions of dollars on development, and their models were distilled and “stolen” by China-based companies, which have released their open-weight models to the world.

These open-weight models from China and other open-sourced / open-weight models in the U.S. are capable of very similar performance levels for a fraction of the cost. Pushing for heavy-handed regulations is the only way for Anthropic and OpenAI to create a moat and protect their future gross margins.

Understanding this makes it easy to understand why these two companies and their investors are pushing for a “slow down” and government control over frontier model development.

For anyone who missed the beginning of this story, you can get up to speed in The Bleeding Edge – AI Doomer Propaganda Machine.

I’m not at all surprised that this topic generated a lot of excitement and feedback, so I’ll tackle some of the other related concerns from subscribers…

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The Unraveling AI Doomer Psyop

As much as I used to enjoy every single email coming from Jeff, I must admit that the obvious bias towards some companies and towards AI is becoming hard to ignore.

This last piece about Jacob Coxon and the theory that this was premeditated and coordinated with mainstream media did it for me. Even if this was true, how can Jeff ignore the leaders of these companies themselves saying that they are losing control of AI. That there is up to a 25% chance that this will completely annihilate the entire human race?

What about the many pioneers and godfathers of AI also sounding the alarm? Mainstream media manipulation again? The narrative that this is pushed by socialist groups is becoming laughable! Come on, what is it that Jeff is refusing to see? He really believes that the people who are rushing to AGI / ASI without concerns for safety will all of a sudden wake up one morning and go “hey, let’s start doing the right thing”? This is a battle of power, money, and ego. Not a good mix…

The excuse that “if the USA doesn’t get there first, China will” is also to be questioned. On the one hand, we are told that China doesn’t have the same abilities and their cheap models are just stolen technology from the US. If one really believes that, this is one more reason to slow down.

I just wanted to give you my feedback. I don’t know if other readers have the same opinion, but my interest in reading Jeff’s emails has decreased tremendously as I am feeling that he is doing the same thing he is accusing the mainstream media of doing….

Thank you for your attention.

– Johane T.

Hello Johane,

I appreciate the feedback and also for writing in. So much has happened since September 10 when I wrote about the Coxon story. If you haven’t done so already, please read my above response to Julia.

While we didn’t have all the facts on September 10, all of what I implied in that issue of The Bleeding Edge has since been proven to be entirely accurate. This is one of those occasions where I don’t like being right, because the forces that are at work are not magnanimous at all. Dangerous in fact.

And it gets worse…

As it turns out, the OpenAI Hugging Face incident that I wrote about in The Bleeding Edge – OpenAI Loses Control of Its Agents has since been proven to have been completely avoidable.

We have since learned that OpenAI actually programmed and structured their tests in a way that empowered the AI agents to “cheat” and go rogue. The tests with the AI agents, in fact, weren’t sandboxed.

OpenAI performed unsecured tests that were not air-gapped from the internet, and safeguards and safety constraints were intentionally left disabled.

In other words, what happened was intentional. They created the “crisis” for their own benefit. Pretty sick.

So, when OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei come out and warn of AI swarms and an apocalyptic outcome, we definitely need to apply some critical thinking and recognize that they have an agenda and are not trustworthy.

And please understand that the godfathers of AI also weave a web of conflicts has they have financial exposure (i.e., they are investors) to many of the leading AI companies and have also invested alongside people like Moskovitz and Tallinn, etc. Yann LeCun is also very political.

Standing in stark contrast to this game that is being played by a small number of powerful people are leaders like Elon Musk, Mark Zuckerberg, and Jensen Huang who have demonstrated critical thinking and a rational approach to this issue.

They all acknowledge, just as I do, that artificial intelligence must be developed in a responsible way and tested in isolated environments to ensure that AI models are aligned with what we have programmed them to do.

Those three met with the Trump administration to push for a balanced and rational approach, and to strongly recommend against what Altman and Amodei are pushing for. More importantly, what Musk, Huang, and Zuckerberg are supportive of is representative of the vast majority of the industry, which by and large has been acting responsibly (unlike Anthropic and OpenAI).

As for China, it is true that there are severe trade restrictions that make it difficult for China to gain access to the most advanced semiconductor manufacturing equipment from ASML (ASML), and that China is a year or more behind in developing its own frontier AI model compared to leading U.S. companies.

This is a fact. What is also true is that China-based entities effectively “stole” the AI models from Google, Anthropic, and OpenAI. These models are fundamentally capable of about 96-98% of the performance levels of the most advanced models at Google, Anthropic, and OpenAI and can be operated for a fraction of the cost.

So, this is to say that the threat from China is very real. Those China models are just about as powerful as the most advanced models in the U.S., and they can be used for malicious purposes. This is a clear and present danger.

Developing frontier AI for national defense against bad actors is just as important as developing the technology for productivity, economic growth, and human longevity. This must be done in parallel to ensure that we have a peaceful world of growing abundance and opportunity.

The Anti-Data Center Movement

Hello Brownstone Staff, I’m not sure if this is the correct forum, but I’d like to have a question/concern passed on to Jeff and his staff. Perhaps their thoughts and answers could be included in an upcoming Near Future Report.

There has been a lot in the news about the public’s concern about AI Center development; concerns about power being drawn from the grid and water usage driving prices up, as well as the “not in my backyard” phenomenon, etc.

As a BR subscriber, I am aware that these concerns are misguided, but what the hyperscalers specifically are doing to alleviate these issues is not being addressed in the media. I think the public is largely ignorant and the mainstream media is probably ignoring the issues for their own political agendas. In the same vein, I have not seen Jeff or other authors talk about it either.

I would like to see an article addressing their thoughts on these matters. Additionally, there seems to be much hysteria concerning the AI race, especially where the technology is advancing toward ‘general’ and ‘super’ intelligence and competition with China. Politicians and the media are whipping up a great deal of paranoia. Again, I’d like to hear what Jeff has to say on the subject. I’d like to be able to discuss the matter intelligently with their insights. Thanks so much for your time.

– Michael C.

Hello Michael,

You are very spot on with your comments.

Anytime we see a coordinated and consistent effort by the media to push some kind of narrative, it is almost guaranteed to be false. And it is always a sign that we need to dig deeper to understand the underlying truth.

I addressed a lot of the areas that are of interest to you in my responses to Julia’s and Johane’s questions above. Definitely worth reading.

As for your other important points. There are two areas where certain groups, including foreign interference from China, are trying to manipulate people on the internet and social media to convince them that data centers are bad due to water usage and increasing electricity prices.

Neither is true, but the forces are trying to build fear, uncertainty, and doubt.

For example, on May 29 this year in The Bleeding Edge, I wrote about the dramatic difference between water consumption by the almond industry in the U.S. compared to data centers. The chart below will probably shock you.

The almond industry is horrible for the environment. That’s why I choose to drink oat milk instead.

It’s also worth noting that data centers have closed-loop systems when it comes to using water. When the water cools down, it gets recycled back into the system to cool down the servers over and over again, whereas the almond industry just keeps consuming 1.6 trillion gallons of water a year.

And also in the April 24 issue of The Bleeding Edge, I wrote the following:

And then there are those who claim to oppose the “environmental destruction” from the data centers, while at the same time are perfectly fine with golf courses. The context here is important. In 2023, data centers consumed about 6.4 billion gallons of water. It sounds like a lot, and it is, but data centers use closed-loop cooling systems where the water is reused after it cools down.

By comparison, golf courses in the U.S. use about 547 billion gallons of water a year. And it’s not a closed-loop system. Golf courses need that much water every year. Data centers only use about 1% of that one time.

As for electricity prices, the truth is exactly the opposite of what the media would like us to believe.

Some very useful research was published this June to answer this specific question titled: Have Data Centers Raised Your Electric Bill? Causal Evidence from the United States.

The research was very clear. There is no causal evidence that data centers have increased electricity prices in the U.S. The opposite is true. Specifically, here is what the research found…

We estimate for every 10% increase in data center capacity, average residential retail prices fell by approximately 0.4% on average.

The fact is that data centers bring jobs and economic activity to more rural areas of the country where land is plentiful and cheaper than in urban areas.

The impact on water consumption is limited, and over time, data centers have been shown to help reduce electricity prices in surrounding areas.

A Near Future Win

Much thanks for the [recent Near Future Report] recommendation!

I read your email analysis on 8/24/26, did some of my own additional research, and observed it had good technical indicators on the price charts indicating likely bullish momentum.

I was going to buy the stock for a long-term hold, but I looked at the options chain and found reasonably priced call options around your recommended buy-up-to price of $450.

I figured that would give enough time for your thesis to work out, and I wouldn’t have to put up as much capital as buying the stock right away.

Lo and behold, the stock zoomed up to over $450 today, and the value of each option contract zoomed up to a value today of $2,240!

That’s a 134% return on my risk in three days, so I decided to take these quick profits and use some of the profits to buy back in if the price settles back down or at least stabilizes over the next week or two.

Keep up the great work on finding undervalued opportunities in this volatile, exciting market!

– Oliver P.

Hello Oliver,

Thanks for writing in and sharing your success story. Absolutely fantastic. This makes me happy.

It’s hard to describe how hard my team and I work to provide our subscribers with the very best investment research on growth assets. Our overarching goal is to empower our subscribers and give them an edge in investing and trading.

We develop our model portfolios and trade recommendations as guidance for our subscribers to use in a way that is most suitable for their investment goals and personal situation.

I love it when my subscribers take that information and build on it with their own strategies and ideas, just as you have done. Well done!

I’m also happy to say that my team and I have a lot of new ideas and product development in our research laboratory that we’re working to bring you within the next 12 months.

I’ve never been as excited as I am right now about investment and trading opportunities in growth assets, and that says something as I’ve been an investor now for four decades.

We have a lot to look forward to,

Jeff