Will Robots Lead to the End of the American Dream?

It was yet another crazy week in artificial intelligence…

This week, news dropped on one of the most spectacular implosions of a “superstar” hedge fund focused on artificial intelligence-related companies.

Leo Aschenbrenner’s Situational Awareness hedge fund was forced to liquidate all of its positions in publicly traded companies, and hedge fund giant Citadel snatched it all up at heavily discounted prices.

There is a lot more to this story, so I’ll probably dig in on Monday, as it is interesting and worth understanding what happened.

Regardless, the latest volatility in AI-related stocks is nothing but short-term volatility, much of it artificial (which I’ll get into next week), and while uncomfortable, it is nothing to worry about.

Case in point, Microsoft (MFST) – what I would consider to be the weakest of the cloud service providers – came out with a fantastic quarterly report with strong cloud services revenue and bullish guidance.

Amazon had great numbers as well thanks to its cloud services division, Amazon Web Services.

And two of the world’s largest semiconductor manufacturers of memory, Samsung Electronics and SK Hynix, delivered record-breaking profits and bullish forward guidance as well.

It’s useful to understand why this is happening. It’s not just sheer volume of memory… It’s that gross margins have gone through the roof compared to where they were back in 2024. SK Hynix and Micron (MU) in particular are killing it with gross margins of 83% and 85%, respectively.

Source: Bloomberg

Every time the naysayers proclaim that the AI boom is collapsing, the real data from the industry shows exactly the opposite.

Have a great weekend,

Jeff

American Fusion Energy?

Hi Jeff,

What are your thoughts on the company [American Fusion Energy]? They trade over the counter as AMFN.

– Shivam S.

Hello Shivam,

I am not able to give personalized investment advice, so I’ll just provide some comments about American Fusion Energy (AMFN) after having taken a quick look at the company.

This is a recently formed company. This February, a private company known as Kepler Fusion Technologies backed into a public shell company, Renewal Fuels, and renamed itself American Fusion Energy.

To say that American Fusion Energy is undercapitalized would be an understatement. Based on AMFN’s latest quarterly SEC filing, filed in May, the company had only $99,594 of cash on its books at the end of the first quarter.

Put simply, the company doesn’t even have capital to operate.

Directly from that same filing is this language:

As of March 31, 2026, the Company has an accumulated deficit of approximately $9.6 million and has incurred recurring losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There are no stated plans for how the company might raise enough capital to even hire and pay employees.

AMFN has no institutional or venture investors backing the company. It is largely owned and controlled by a single individual.

All it has is an idea of a pulsed toroidal magneto-inertial fusion reactor and a very weak whitepaper lacking any substance. The idea comes from the CTO, John Brandenburg, who is a controversial character. Outside of his experience in plasma physics, he is known for some pretty wild theories about thermonuclear explosions and war on Mars.

None of what they are proposing has been demonstrated on any scale. The company doesn’t have the money to do anything right now.

For comparison, Commonwealth Fusion Systems (private) just raised $1 billion and is nearing completion of its fusion reactor plant. The company is backed by an incredible list of venture capital firms, corporations, and institutional investors.

As investors, the real question that we have to ask ourselves when we see companies like this with spectacular claims of a technology breakthrough is: if they have something so special, why have they not been able to raise capital to build it?

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Who Is Responsible if an AI Agent Violates a Contract?

In [the Chain of Thought] article titled Two AI Agents Make a Deal, what happens when one party doesn’t live up to the agreement? Do current laws allow them to sue?

How do you get them to show up in court? These are kind of rhetorical questions, but nevertheless humorous and serious at the same time. Best Regards.

– Kevin W.

Hi Kevin,

These are excellent points to bring up, and actually very interesting from a practical perspective. These are actually soon-to-be very real issues.

First off, U.S. law does not treat an agentic AI as a legal person. I’m not aware of any jurisdiction that does.

And every company and LLC, for example, must have a registered agent, which is a human or a registered agent service.

So, to answer your question specifically, yes, current laws allow them to sue. More specifically, the companies themselves can sue or be sued. The AI software itself is not the suable entity. The corporation is.

Because of this, the legal entity (not the agentic AI) would be served. If the company (the LLC) ignores a lawsuit, the court can enter a default judgment. However, in theory, the agentic AI could be given a court service and attempt to defend itself, most likely with the support of the registered agent.

In reality, if there was in fact a substantial monetary dispute between two agentic AI-led corporations, the court would almost certainly look to discover the humans that were responsible for setting it up, providing initial funding for it, etc.

I’m sure that today, most judges would be very skeptical of fully autonomous zero-human corporations, so they will almost certainly look for origin and accountability by some human party/parties.

Aside from how a lawsuit might actually be managed, the bigger issue will likely be collection of any settlement. Assuming the agentic AI is the only holder of the private keys, and there is no other way to reach any assets held by the agentic AI, collection may be impossible.

It’s worth noting that this exact problem exists today when entities involved in a lawsuit have offshore entities and/or the company being sued is undercapitalized. There is often no recourse possible, or the expense of collection exceeds the value of the assets to be collected.

Either way, the courts will soon be forced to tackle issues like these, and there will be legal precedent set regarding zero-human corporations.

But so long as the law doesn’t recognize an agentic AI as a legal person, these LLCs can enter lawsuits, but the registered human agents will almost certainly be pulled into the mess.

Thanks for the interesting question. 

“The End of the American Dream”?

Dear Jeff,

What if, when all this industry has been built, there will be no market for its products because the people have been replaced by robots, and [humans] have no money to buy them? That will be the end of the American Dream!

– Thomas D.

Hi Thomas,

It’s not unusual to have the kind of feeling that you’ve expressed. That sense that if/when robots can do everything that we humans can do, what’s left?

But that line of thinking assumes two things…

First, that there is an endpoint, some kind of static point in time where “all this industry has been built,” and it’s all done. Second, that society and economics will function in the same way that they do today.

Both assumptions are incorrect.

There is no endpoint, no static equilibrium for technological advancement.

Intelligent robots, task-specific robots, and artificial superintelligence are all tools, enhancements for human productivity. These technologies will free up time, allow us to live more balanced lives, enjoy far higher quality of life, and affect an even faster pace of technological breakthroughs.

Human motivations, drive, and creativity won’t die in that kind of environment, it will thrive. And that’s especially true of the American spirit. We love to improve, to invent, to build, and leave our children with a better life than the one that we had.

What will happen is that money, as we understand it today, will have less relevance. Advanced technology has a particularly deflationary impact on the cost of goods and services. I’ve written many times about how the cost of any good or service will distill down to the cost of energy and raw materials required to produce that good or service.

And when automated systems and robots are capable of mining, extracting, and processing raw materials, the reality will become that the cost of anything will be the cost of energy required to produce it.

Equally important is that new forms of energy like fourth-generation nuclear fission (small modular reactors, or SMRs) and nuclear fusion reactors will eventually result in even lower costs of energy production than the lowest available today. Purchasing power will increase significantly, and future low-income earners will be able to afford things that millionaires can’t afford today.

Humans who have the desire and motivation to work, be productive, learn, and contribute to society will still have a role in this inevitable future that is racing towards us. And humans who wish not to participate, have no desire to work, and only want to take from others, will have far fewer interesting outcomes.

Thomas, I would argue that the American Dream is more alive than ever.

When I look around the world at so many of the policies leading to economic decline, industrial weakness, cultural erosion (or elimination), the elimination of freedom of speech, the removal of personal rights and freedoms, and the destruction of the very fabric that originally made those countries strong…The United States is a bright beacon on the planet for opportunity, freedom, innovation, capital formation, and the staunch support for personal liberties and property rights.

U.S.-based companies are leaning in and building the future right now. There is nowhere else on Earth where more innovation is happening.

The American Dream is very much alive for anyone willing to lean in, commit, and contribute. And as long as the U.S. Constitution is defended, law and order are maintained, and the U.S. government maintains policies that support economic growth, the American Dream will stay alive.

Thomas, I have some suggested homework for you. I recommend reading Isaac Asimov’s Foundation series and the Robot series. Arthur C. Clarke is another one to read. Robert Heinlein is also a lot of fun. And Iain M. Banks and his Culture series are also worth exploring.

These are all obviously science fiction, but they’ll help bring to life what a distant future might look like when money, in the way that we know it right now, is no longer relevant.

As long as we (the global population) don’t end up in WWIII of some kind, or we experience some catastrophic event (like a massive asteroid hitting Earth), we are currently headed towards a world of abundance which is being led by U.S.-based companies.

We have an amazing future to look forward to, as long as we don’t let a small number of evil politicians and lunatics screw it up for all of us. And we the people are going to have to fight to make sure that doesn’t happen.

We have so much to look forward to,

Jeff