Over the past several weeks, the AI sector has become a magnificent anthropological study in collective hysteria—a caricature of a serious industry completely unmoored from reality. As self-important executives across the globe rush to microphones to sound the alarm, the line between saving humanity and saving a stock price has entirely evaporated. If you’re confused, you’re not alone.

To understand the current state of artificial intelligence, you must look past the dense fog of corporate PR and institutionalized fear. Strip away the math and the jargon, and you find a time-honored Silicon Valley tradition: a high-stakes financial theater where truth is the damsel in distress, tied to the train tracks, while a band of billionaire eccentrics plays the roles of both the villains and the caped crusaders chasing the elusive stone.The “stone” at the heart of this multi-billion-dollar romance is Artificial General Intelligence (AGI), a theoretical silicon messiah that tech titans dangle before the public to keep stock prices high and regulators at bay.

Consider the stage-managed grandiosity of recent weeks. On one side of the valley, Greg Brockman and Nvidia’s Jensen Huang pace the floors of heavily air-conditioned auditoriums, hands waving like television evangelists, heralding the imminent arrival of Artificial General Intelligence (AGI). It is a beautiful, cinematic pitch: the silicon messiah is coming, and it will cure disease, solve climate change, and incidentally justify Nvidia’s dizzying, gravity-defying market capitalization.

But then, the script takes a sharp, theatrical turn. Suddenly, the very priests who built the temple are rushing out into the street, shouting that the altar is on fire.

Within days of each other, young prodigies and weathered executives began sounding the alarm. Jacob Coxon, a brilliant, terminally earnest safety researcher, dramatically walked away from his keyboard, leaving behind a viral trail of warnings that the industry is casually gambling with human survival. A quick confirmation by Evan Hubinger alongside OpenAI’s Jakub Pachocki’s essay, An Alien Mind, the message was clear and terrifying: the machine is becoming too powerful, self-improving beyond our control, and it might just destroy humanity by the end of the decade.

The chorus rose to the executive suites. Dario Amodei of Anthropic published a sweeping essay pleading for a synchronized pause. Sam Altman of OpenAI nodded in solemn, public agreement, while Elon Musk of xAI chimed in from the digital ether, all calling for a coordinated industry slowdown to save humanity from itself.

It was a masterclass in what a cynic might call “existential marketing.”

To the casual observer, it looks like a boardroom full of Oppenheimers weeping over their creation. But if you follow the money, an entirely different, far uglier picture emerges. Over at David Sacks’ firm, the venture capitalist didn’t buy the tears for a second. Sacks took to the microphone to slam the top executives, bluntly accusing them of trying to bypass antitrust laws to form a classic market cartel.

And why would they want a cartel? Because behind the closed doors of San Francisco boardrooms, the sweat is beginning to bleed through the custom-tailored hoodies.

This isn’t the first time the Valley has tried to pull off this kind of regulatory theater. We’ve seen this script before. Back in 1995, Bill Gates looked out from his fortress in Redmond and realized Netscape’s web browser was about to turn Windows into a glorified, irrelevant set of plumbing. Gates didn’t panic by engineering a better product; he panicked by trying to rewrite the rules of the road. Microsoft executives famously marched into Netscape’s Mountain View headquarters and tried to slice up the internet market like an afternoon cake, politely suggesting that Netscape stick to Mac and Windows 3.1 while Microsoft took everything else. When Netscape refused to play ball, Microsoft simply suffocated them by tying Internet Explorer to the operating system and cutting off their oxygen. Altman, Amodei, and Musk are playing the exact same game, just with a modern, apocalyptic twist. When you can’t guarantee you’ll win a fair fight on product merit, you try to partition the market. Except this time, instead of using operating system monopolies to choke out the competition, they are trying to use the threat of a science-fiction apocalypse to trick Uncle Sam into building the moat for them.

The cold, hard truth of the AI business is that it depends on a terrifyingly small handful of customers. These are massive corporations buying bulk compute to figure out what, exactly, they are supposed to do with it. For the past two years, the spending only went up. But recently, the data scientists at corporate spend-management platform Ramp noticed a chilling anomaly in the ledger. For the first time since the boom began, spending among the top 1% of AI buyers has begun to contract. The enterprise customers, having spent millions on automated chatbots that occasionally lie about the company’s return policy, are quietly cutting back.

When you see AI labs suddenly increase their frantic pressure for government regulation, it isn’t because they are frightened of a science-fiction Terminator waking up in a server rack. It is because the financial picture is getting worse by the day. They are begging for government-mandated “safety” fences because fences keep out competitors. They want compliance costs so astronomicallyhigh that no scrappy startup can ever challenge their territory. They are trying to lock in their market share before the venture funding dries up entirely.

But the ultimate joke—the real house of cards—is that even if the U.S. government grants them their cartel, the frontier cannot be paced.

Enter the eccentric misfits from across the Pacific. While Silicon Valley was busy calculating how many billions it takes to train a model to write corporate emails, a Chinese startup called DeepSeek quietly changed the laws of economic gravity. In September, DeepSeek rolled out models priced so aggressively low that it made the American labs look like they were selling landlines in the age of the iPhone. DeepSeek’s models are priced cheaper without prompt caching than Anthropic’s or OpenAI’s are with it. On a blended price index, DeepSeek’s inference costs arrived on the order of 200 times cheaper than Anthropic’s average pricing.

The brilliant, eccentric hackers proved that you don’t need a hundred-billion-dollar sovereign wealth fund to build frontier intelligence; you just need better engineering and a complete disregard for Silicon Valley’s margin expectations.  Adding to the geopolitical friction, the Chinese government asserted that “Fear mongering, confrontation, competition will just disrupt [the] process of global AI governance.”

This leaves the Western tech titans in a catastrophic squeeze. Their domestic customers are tightening their purses, a foreign competitor has commoditized their only product by a factor of two hundred, and their massive infrastructure debts are coming due.

So where does the truth lie?

It lies exactly where President Donald Trump suggested when he breezily dismissed the existential warnings as “things that won’t happen,” declaring that the United States must simply push ahead to win the geopolitical race. China’s Minister of State Security, Chen Yixin, echoed the sentiment, saying AI has become “the main battleground for global technological competition and a new arena for strategic rivalry among major powers.” In a world governed by raw hubris and nationalist competition, a polite corporate agreement to slow down is an illusion. Besides, the federal government isn’t about to suspend the Sherman Antitrust Act just so a handful of venture-backed tech barons can legally collude on market supply.

The existential threat isn’t that a super-intelligence is going to turn humanity into batteries. The threat is that the entire, multi-billion-dollar apparatus is built on bad math, artificial scarcity, and a desperate desire to build a regulatory moat before the world realizes that the emperor has no clothes.

The tech barons aren’t trying to save us from the stone; they are just desperately trying to figure out how to keep bromancing it until the check clears.

FDEs have the hottest job in AI. Labs, startups and PE firms are all hiring engineers to sit inside their customers’ operations and solve their problems. Almost none of them agree on what those engineers are supposed to accomplish, or what the strategy underneath the hiring actually is.

I’m Vinoo, CEO of Kepler, the deterministic infrastructure for AI. I’ve built pieces of the forward deployed function three times, at three different institutions, over the course of over a decade. Here’s what I’ve seen work, what I’ve seen fail, and where I think this goes. — Read More