A rationalist, a cynic and an anthropologist walk into a bar...

it's weird that ai got too dangerous to keep advancing right around the time money got more expensive to borrow

— dr. rich traditions, JD (@helldude.bsky.social) September 22, 2026 at 11:37 AM

At a time when everybody seems to be criticizing AI and particularly the large frontier LLM base models of companies like OpenAI and Anthropic, it is helpful to distinguish between the different schools of arguments.

The group which initially dominated the coverage but which seems to be losing ground is the apocalyptic rationalists. They generally argue that recursive self-improvement and artificial general intelligence within the next year or two could cause the extinction of humanity. These statements are not really a response to recent events; they predate them by a decade or more.

The non-believers can generally be split into two camps. Let's call them the anthropologists (they ground their position on an in depth study of Silicon Valley culture) and the cynics. The first, represented by people like Cal Newport and Adam Becker, argue that the Believers have come to so dominate the world of AI companies that all this talk of existential threats is absolutely sincere. They argue (with extensive supporting evidence) that the rationalists are effectively a cult which has been allowed to amass unprecedented money and power.

The cynics, by contrast, tend to treat the wave of end-times pronouncements coming out of the AI industry as a self-interested ploy, rich people trying to rake in even more hundreds of billions of dollars by spinning the recent news to their advantage. Sam Altman's rebranding of his being forced to delay the IPO out of financial concerns as a safety matter was a perfect example of the cynics' case.

Ed Zitron's podcast Better Offline recently featured a great discussion between Newport and Becker on one side and Zitron, who generally tends toward the cynic camp, on the other. Essential listening for anyone trying to make sense of this.

Personally, I suspect that the views of the cynics and the anthropologists are less mutually exclusive than they initially appear, but for now I'm interested in how the cynics' arguments are finding an audience in the world of financial and business journalism.

From the popular CNBC show Squawk Box:

Steve Eisman

[Asked about the alarming talk of AI killing us all coming from Anthropic and OpenAI] I think that there's something else completely going on here. I think the idea that AI, first of all, there's no evidence at all that AI has achieved artificial general intelligence at all. And most of the evidence seems to point that it never will. Or if it does, it's many, many years in the future.

But the idea that this whole Terminator thing is nonsense.

So I think something completely different is going on. And what I think is happening is that token maxxing is over. The open-weight models are taking big market share. I think these companies are very nervous.

They realize that there are no moats around their business whatsoever, and they're trying to manufacture a crisis that will create regulation and that they think they can then manipulate to create the moats, to create the duopoly that they want.

Andrew Ross Sorkin

But in this case, that's not happening in large part. And we never talked about this being the byproduct of it. But the deal that Nvidia struck to buy Hugging Face, I believe, was partially an insurance policy to protect OpenAI. If you want to get truly conspiratorial, that's good. This—if you want to get truly conspiratorial about this, yes.

Because Face would have sued.
...

There were other bidders for the company. Yeah. And so one of the reasons you might have taken Nvidia or—and by the way, one of the reasons Nvidia might have been willing to pay more is to protect Hugging Face, and protect Hugging Face, you're protecting OpenAI. You're protecting basically all of the—the entire ecosystem.

'Big Short' investor Steve Eisman on AI: The companies are trying to manufacture a crisis 

That was ugly

Anyone who had put money on Bonta for Governor might want to visit their Polymarket account. It's generally bad for their political careers when crusading attorneys general humiliate themselves by completely folding on their biggest case.

 

 From the Hollywood Reporter.

That’s All? Team Paramount Nabs Warner Bros. With Only Minor Concessions to States
Erik Hayden

After all of that sound and fury, that’s it? “I don’t think these two companies should merge,” said California attorney general Rob Bonta in unveiling a settlement with David Ellison to allow the mogul to do just that with Paramount and Warner Bros. Discovery.

Paramount’s C-suite must have been popping bottles of champagne as the press office engines of the major studio and 12 state attorney generals typed up the settlement term boilerplate language of what ended up being a stern finger-wave to Ellison’s team.

When Bonta held his presser on Monday he made a point to note multiple times that he personally was not in favor of the merger while rattling off that Paramount would invest $1.5 billion in domestic production over five years, Paramount and Warner Bros. need to keep their studio lots as is in Los Angeles and CBS News and CNN would have independent editorial boards.

Additionally, the Paramount and Warners cable channels (think: Comedy Central-MTV-BET-Nick and HGTV-Food Network-TNT-Discovery, respectively) will have to negotiate affiliate agreements separately. The studios also need to invest $9.5 million a year in workforce training and career development in film and TV production communities. And the megastudio will start a $5 million annual fund to bankroll indie movies. (Not to mention Paramount will also pay $40 million to reimburse the 12 states who sued it for attorneys’ and economic expert fees.)

A five-year commitment for 30 films does up the three-year pledge Ellison had earlier signed on to. And if the studios fail to meet that threshold, they would be hit with a $30 million penalty per film. Bonta says that $1.5 billion figure represents $300 million more annually than the combined studios spent last year.

In the fine-print consent degree, there’s a lot of rules-of-the-road language on potential divestitures (like selling, say, Miramax Studios or Comedy Central or VH1) if Paramount fails to follow through on its commitments (Notably, blue-chip assets like CNN or New Line Cinema are not even on the table to divest in that scenario). But the commitments themselves don’t appear to be that high of a bar to achieve.

 

 For those who will be canceling their HBO Max subscriptions soon, make sure to check out Bryan Fuller's inspired feature debut Dust Bunny.

 

The most important thing to remember about the incident where OpenAI agents went rogue is that it never happened.

Before you race to the comment section, hear me out. The Hugging Face hacking incidents are very much real and are something we should all be frightened of, particularly given all of the other recent revelations. At a bare minimum, we should immediately start aggressively investigating and prosecuting all crimes committed by these companies (which is an ever-growing list).

But the seriousness of the incident does not in any way justify the horrible job the press has done with this story (at least up to recently). Through a combination of laziness, a weak understanding of the underlying technology, a taste for sensationalism, and a willingness to credulously swallow any narrative pushed by someone sufficiently rich and powerful, the initial response to the announcement was so mishandled that, at least temporarily, the guilty parties were actually able to spin the story into a PR win built around the idea that these frontier models had gotten so intelligent that they were reaching the point where they could no longer be controlled. They were setting their own agendas, ignoring instructions, and ignoring human instructions.

This was an existential crisis that couldn't be addressed on a company-by-company basis. It required all countries to cooperate, particularly China, which was suddenly being singled out as the major stumbling block despite the fact that, in this case, it doesn't seem to have done anything wrong. No point in cracking down on the companies that had actually broken the law.

The problem with the Rogue AI story is that, when you actually dig down into the details, you see that there is little to no evidence to support it. Based on what we know, it appears that these agents did what they were designed, trained, and told to do (or more precisely, not told not to do). Without getting into that paperclip nonsense, perfect alignment is currently impossible. That said, we have to distinguish between an LLM being overly literal or missing some subtlety compared to going Colossus on us and saying, "No, I'm going to do the opposite of that." It's true that they turned out to be considerably more powerful than the engineers assumed, but not to a degree that requires significant gain of function. It's also true that the engineers did not anticipate some of the methods the agents employed, but those methods were consistent with the training data and, in the case of cooperation, were displaying behavior that was part of their programming.

As far as I can tell, the agents were never told not to cooperate or not to break containment. Instead, they were placed in sandboxes where they were supposed to be isolated. The fact that this wasn't the case has nothing to do with the agents and everything to do with the engineers at OpenAI screwing up.

The sensationalism was further inflamed by coverage of the language the agents used both to describe their own actions and to "talk" to each other.

This deserves and will probably get a post to itself, but the key points are that, one, while there are ways of looking under the hood and following the "thought processes" of an LLM, simply asking it to explain what it was thinking has proven highly unreliable at best and worthless at worst. Large language models generate plausible strings based on their training data, which leads us to point two.

When it comes to the behavior of artificial intelligence, some of that training data consists either of science fiction or of science fiction/"rationalist" fanboy writing on places like Reddit and Twitter. The language sometimes comes off as creepy  because that's what some of the human-generated texts that it is based on often sound like. From a technical and a practical standpoint, this is probably a trivial issue, but it has loomed large in the discourse with terms like "very hivemind/cult like" being quoted and talk of self-sacrifice and "permadeath" figuring prominently. 

It is essential to note that the initial discussion of AI safety following the incident was centered almost entirely on questions of artificial general intelligence and recursive self-improvement, despite the fact that neither appears to have played any role whatsoever in the Hugging Face hacking attacks. As with aliens and ESP, they may exist, but there's no need to invoke them to explain what we saw.

From the standpoint of OpenAI, Anthropic, and all the rest, the Rogue agents/AGI/RSI narrative is far preferable to what actually appeared to have happened: these companies are running recklessly irresponsible tests with badly set-up security measures in ways that should open them up to criminal liability.

 Recommended reading: 

 From WSJ The Hugging Face Hack Wasn’t What It Was Cracked Up to Be

 From Cal Newport Are We at War with AI Agent “Civilizations”?

 Recommended listening:

From Philosophy, Programs, and Prompts The Problem With The Alignment Problem 

From Ed Zitron Stopping The AI Safety Cult ft. Adam Becker & Cal Newport 

Friday Tweets

Some stories and developments you might want to keep on your radar. 

Did anyone else get the feeling that the GOP "convention" was more about soothing Trump's ego than about helping the candidates?

the internals must be great

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— Josh Marshall (@joshtpm.bsky.social) September 17, 2026 at 8:36 AM

Then there’s Rep Mike Lawler who took on Trump and WON!

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— Josh Marshall (@joshtpm.bsky.social) September 17, 2026 at 5:48 PM

Maybe Rep. Tiffany can use this picture for his gubernatorial campaign (I'm sure one of the candidates can).

8 months ago.

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— Ron Filipkowski (@ronfilipkowski.bsky.social) September 17, 2026 at 6:04 PM

We have mentioned the unprecedented level of Saudi et al. funding for this charming deal, haven't we?

FCC Approves Foreign Funding for Paramount-Warner Bros. Deal www.bloomberg.com/news/article...

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— Catherine Rampell (@crampell.bsky.social) September 17, 2026 at 2:16 PM

More news from the Ellison media empire.

Bari Weiss has plunged CBS News into ratings calamity. —"Evening News" has posted worst ratings of 21st century —"CBS Mornings" has posted worst ratings of 21st century —And now "60 Minutes" has posted worst ratings of 21st century More in @status.news: www.status.news/p/60-minutes...

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— Oliver Darcy (@oliverdarcy.bsky.social) September 15, 2026 at 6:55 PM

I was working on a post criticizing Marshall for being too credulous of "rationalist" claims. Looks like I can delete that one. Excellent thread.

The AI debate has forced me, somewhat agst my will, to grapple a bit more closely with the "longtermists", basically a movement or subculture of morons who propose novel forms of moral reasoning based on sci-fi ideas they imagine might happen hundreds, thousands or millions of years in the future.

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— Josh Marshall (@joshtpm.bsky.social) September 17, 2026 at 10:36 AM

This one's worth repeating.

Yes, but the longtermists add another level of bullshit by pulling thousands of years of made-up numbers from a convenient orifice.

one of many advantages to being heavily exposed to the self-driving scene is understanding that "the trolley problem" is vacuous bullshit for poseurs

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— e.w. niedermeyer (@niedermeyer.online) September 15, 2026 at 3:38 PM

Eye popping. Court just unsealed Summary Judgment motions in New York Times v OpenAI / Microsoft. Easy to see why the AI companies had so many redactions (pink). Their own people wrote the lede for NYT, the "largest theft of labor in human history"... "more and more substitutive..." /1

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— Jason Kint (@kint.bsky.social) September 17, 2026 at 11:48 AM

Burry:

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— Carl Quintanilla (@carlquintanilla.bsky.social) September 16, 2026 at 2:50 AM

Similar points made by Cal Newport, Carl Brown, et al. Finishing up a post for next week on this.

‘People built the test, removed restraints, defined the objective, left a route open and decided not to stop what was happening. Calling the result “rogue AI” does more than sensationalize it. It allows those human decisions to disappear quietly from the story.’ www.wsj.com/opinion/the-...

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— Jesse Felder (@jessefelder.com) September 17, 2026 at 11:46 AM

"All the news that fits the narrative."

In the course of a good discussion of the upcoming midterms, Nate Cohn says, without any pushback, that Immigration was "a terrible issue for Democrats during the Biden years. Because Biden opened the border..." www.nytimes.com/2026/09/16/p...

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— Larry Glickman (@larryglickman.bsky.social) September 16, 2026 at 9:35 AM

A few weeks ago I realized that Trump (to the extent he reflects on it at all) still thinks of the fed rate in terms of non-repayment risk, the way a real estate guy (particularly a shady one) would approach interest rates. That why he seems to believe you should cut when the economy is hot.

Well, that took longer than I thought, but he hath spoken:

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— Michael McKee (@mckonomy.bsky.social) September 16, 2026 at 1:44 PM

Remember those posts we did about the importance of adequate oil reserves?

“.. With Saudi oil now blockaded, Americans are about to discover why maintaining stability in the Middle East and not handing it to a consortium of Russia and Iran was always important.” @jayinkyiv.bsky.social

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— Carl Quintanilla (@carlquintanilla.bsky.social) September 13, 2026 at 5:04 AM

Computer scientist Cal Newport adds some clarity to the AI debate

As previously mentioned, software veteran Carl Brown has pointed out that we can prevent incidents like the hugging face hack simply by enforcing existing laws.

Here the reliable Cal Newport explains that these incidents all come not from LLMs in general but from the reckless application of one particular application of LLM-powered agents, and that there's no good explanation for the risks these companies have been taking.  

When Hubinger says “AI could kill all humans,” he’s not talking about AI in a general sense; he’s really referring to a specific type of AI system that we can call an LLM-powered agent.

These systems consist of an old-fashioned computer program that repeatedly does something like the following:

1. Sends a prompt to an LLM describing its goal and current state, then asks for a suggestion about what to do next to move closer to the goal.
2. Blindly executes whatever the LLM describes in its response.
3. Updates its state based on what happens and then loops back to the first step.

LLM-powered agents aren’t necessarily dangerous. Millions of software developers use these systems every day to help write and debug computer code. Though these coding agents make mistakes, no one is worried about them going rogue in any alarming sense. (OpenAI ​recently scanned​ “tens of millions” of traces of coding agent interactions with their LLMs and found zero instances of high-severity incidents.)

Hubinger is likely referring to the same sub-class of these agents that was involved in the autonomous hacking attacks over the summer, and which satisfy the following additional properties:

1. They are given access to powerful tools and information specific to computer hacking.
2. The LLM they prompt has had guardrails removed so that it will respond to prompts requesting information about dangerous or illegal behaviors.
3. The agents have minimal (or no) safety checks or constraints on what actions they’ll execute. (Standard coding agents, by contrast, are hard-coded with long lists of commands that they will not execute, even if an LLM suggests it.)
4. The agents are run for very long time periods (sometimes multiple days) without any human supervision. They are programmed to be persistent, meaning that they should never give up but instead continually prompt the LLM for new next steps to try, pushing it to get more creative and brazen in its suggestions.

We can call these long-horizon, dangerously equipped unsupervised LLM-powered agents. As best as we can tell, it’s this very narrow type of unpredictable and potentially hazardous system that companies like Anthropic are rushing recklessly ahead to provide increasingly powerful tools to play with (including, reportedly, the ability to update elements of their own code) and increasing autonomy (achieved, in part, by post-training the LLMs they prompt to suggest more aggressive actions).

This information lets us be more specific about recent claims. The concern of the moment is not that AI is inexorably becoming harder to control and scary. It’s instead long-horizon, dangerously equipped unsupervised LLM-powered agents that are making people nervous.

There’s an obvious solution here: stop racing to amplify this very specific type of particularly unstable system.

This wouldn’t even necessarily entail much financial sacrifice. Most of the things people already like doing with LLMs, or hope LLMs will enable soon, don’t require these haphazard and unpredictable setups. Anthropic and OpenAI could stop working on them today with essentially zero impact on their projected revenue.

All of which begs the question: Why have these particular AI companies made these alarming long-horizon LLM-powered agents so central to their efforts? I’m not certain of the answer, but if I were to guess, it probably has a lot to do with the Silicon Valley technological salvation ideology (to borrow a term ​from Adam Becker​) that ​heavily influenced​ key figures like Sam Altman and Dario Amodei, as well as many of their employees. They think these types of agents are their best bet to summon the digital deity of superintelligent AI which, in their futurist eschatology, will either heal the world or destroy it. In some sense, they see themselves as prophets attempting to usher in a new Messianic age.

All of this should make you angry.

 

Maybe we could just try going back to the old fashioned notion of enforcing laws.

I know some of you aren't video people, but this is one of the most sensible things you'll hear in this increasingly overheated debate. Brown has long been one of the most reliably clear-eyed and knowledgeable voices in the fields of software and (more recently) AI.  

 This is well worth your time, which is something I can't say about easily 90% of the coverage of this story.

The timing of Sam Altman's principled stand is a bit suspicious

[Standard caveats for the Hugging Face hacking thread.]

[The mainstream coverage of the story has been sensationalistic and alarmist, with many details badly reported or out-and-out wrong. That doesn't mean you shouldn't be scared. LLM-based agents are getting disturbingly good at breaking through cybersecurity, and in this one area, they will only get better.]

[The potential for extensive and sometimes catastrophic harm is immense. You don't have to believe in Rogue AI and the coming robot apocalypse. If anything, some of the skeptics, like Cal Newport and Gary Marcus, are among the most concerned.]

[Imagine a world where every bad actor, from cyberterrorist all the way down to two-bit scam artist, had access to the world's greatest team of hackers. Or a world where any moron playing around with a computer could accidentally shut down the power grid. You don't need stories of Rogue AI to make that scenario scary.]

I've seen a lot of True Believers online railing against the argument that the uproar over the Hugging Face incident is all hype being generated by the frontier model companies for their own nefarious reasons. Curiously, though I follow the skeptic community (Marcus, Newport, Carl Brown), I've never actually come across anyone making these charges. The consensus in that group seems to be that these safety concerns are both real and disturbing. Gary Marcus has gone so far as to describe them as potentially catastrophic.

That said, it's important to make the distinction between "all a massive conspiracy" and suggesting that some of the executives at these companies might be trying to spin recent events in their favor. There are literally trillions of dollars at stake here in an industry that was widely considered a bubble of unprecedented size.

Which brings us to...

OpenAI delays IPO as Sam Altman cites growing safety concerns
Aidin Vaziri

OpenAI will not go public this year, CEO Sam Altman said in an interview released Saturday, delaying one of the most anticipated stock market debuts in Silicon Valley as the artificial intelligence industry faces growing scrutiny over safety.

Altman told Fortune that taking the San Francisco company public now would be the wrong move while OpenAI and other major developers work through questions about how quickly to build more powerful systems.

This story has been getting a lot of play. Based on the headlines and ledes, choosing to forgo a trillion-dollar IPO out of safety concerns would certainly indicate that Sam Altman and OpenAI were taking these concerns very seriously.

If it were true.

If you've been closely following the story, or just reading below the fold in most of these articles, you would find that there has been extensive, well-sourced reporting from credible sources showing that the decision to delay the IPO until 2027 was made a couple of months ago for reasons that had nothing to do with safety.

Here's Forbes from late June:

OpenAI hired bankers and lawyers eyeing an initial public offering as early as the third or fourth quarter of this year, with CEO Sam Altman pushing them to engineer a $1 trillion valuation, the Times reported, citing three people involved in the talks.

Over the past week, OpenAI’s advisers have cautioned the company that a public listing may not be met with enough enthusiasm due to the volatile public tech market, per the report.

When advisers offered a choice between waiting until 2027 for a $1 trillion debut or accepting a lower valuation for a faster one, Altman called any cut to the trillion-dollar figure a "nonstarter," one person in contact with him told the Times.

At the risk of putting too fine a point on it, being able to rebrand the delay from from being a sign of a struggling company to being a bold statement of principle is a big win for Altman and his company. The original story had been a huge black eye and had come at a time when a growing number of analysts and commentators were speculating that OpenAI was struggling to survive, particularly when compared with Anthropic.

Once again, this is not meant to suggest that they did it on purpose. The PR angle alone is not enough to make up for the legal and regulatory concerns that the Hugging Face incident has likely put into motion.

There is, however, at least one plausible scenario where OpenAI's cybersecurity fuck-up could actually be the best thing to happen to the company in years. Anthropic being forced to delay its IPO due to safety concerns and the inspiring example of its competitor would be a major lifeline for OpenAI. (Though so far it doesn't seem to be working.)

Hugging Face was a major body blow to an industry that was already about as popular as a venereal disease. It's silly to assume the leaders of these companies wanted it to happen, but it's naive to assume they'll be completely honest and altruistic about their response either.
 

Sanewashing Revisited

While reading Andrew Gelman's recent post on sanewashing, I was surprised at how many people in the comment section seem to be completely unfamiliar with the term. Best lesson here is that I shouldn't assume that most normal people obsessively follow press critics like Margaret Sullivan.

With that in mind, here is my working definition, supported by a beautiful example from, of course, the New York Times.

Sanewashing is the practice of journalists downplaying signs of instability, mental decline, and general craziness through often comically understated language, extensive and misrepresentative paraphrasing that overstates the coherence and softens the rhetoric of the original statements, burying especially embarrassing details, or simply choosing not to cover certain stories.

Sanewashing is closely associated with normalization, coverage that desensitizes readers to how extreme and bizarre these times are.

Sanewashing is applied to various groups (Silicon Valley lunacy has been benefiting from it for well over two decades), but it is most strongly associated with MAGA and Donald Trump.

When on the lookout for sanewashing, it is important to note that, with the exception of stories that receive no coverage at all, the process almost never washes away all of the craziness. Though we can't get into the reporters' and editors' heads, the objective generally appears to be finding a middle ground between depicting these statements, events, and policies as normal and calling them out for what they are.

Last week's Republican "convention" gave us numerous fine examples, but this might be the best.

Trump: "Please right your right hand. I pledge to the greatest president in the history of the United States. That loves us so much he can't even breath. That I will go out with my family, my friends, I'll do it any way - I don't care if I'm registered or not, I'm going to try to cheat like hell..."

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— Aaron Rupar (@atrupar.com) September 10, 2026 at 7:32 PM

 

At one point, Trump, invoking the extensively debunked lie that massive voter fraud cost him the election in 2020, had Republicans pledge to do anything necessary, including cheating and voting illegally, in order to win in November. You can see the video in the tweet. Here's the transcript.

TRUMP: So please raise your right hand. I pledge —
CROWD: I pledge.
TRUMP: To the greatest president in the history of the United States —
CROWD: To the great president in the history of the United States.
TRUMP: That loves us so much he can't even breathe.
CROWD: That loves us so much he can't even breathe.
TRUMP: That I will go out with my family, my friends, I'll do it any way, I don't care if I'm registered or not, I'm going to try to cheat like hell like they do. There has never been bigger cheaters, they don't care, I am going to go out and I'm going to get my friends and family and we are going to vote on November 3, or we are going to vote before that. 

Now here's how the New York Times described that moment.

By Shane Goldmacher, Lisa Lerer Sept. 11, 2026

Vice President JD Vance was billed as the headliner of the second night of the Republican convention, but President Trump stole the show.

With a hug and a handshake, Mr. Vance exited stage right after his speech as Mr. Trump returned to the place he likes most — center stage — to make his final pitch of the convention to keep Republicans in power.

At one point Mr. Trump asked attendees to raise their right hands and pledge to him that they would vote with their family and friends. Dutifully, they did.

“You know what happens if you don’t vote?” Mr. Trump said. “You go to hell.”

 You'll notice the most memorable and newsworthy bit have somehow been left out.

Perhaps an even more dramatic example of sanewashing was found in the video that accompanied the New York Times story. I don't know how to embed this video, but I did capture the relevant frames.

The video captures the opening of Trump's statement, but abruptly stops mid-sentence right before the part about cheating.

By comparison, PBS Newshour ran the entire clip so make sure to do your part when the next pledge drive comes around. 

Through not directly related to sanewashing, this RNC video gives you some idea of what an accurate depiction of today's GOP would have to convey.

Wow -- RNC video: "On June 14th, 1946, God looked down on his planned paradise and said, 'I need a caretaker,' so God gave us Trump." It only gets more unhinged and culty from there.

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— Aaron Rupar (@atrupar.com) September 10, 2026 at 5:26 PM

 

Nothing untoward going on here

DRUCK: “.. Given what’s going on in the economy and the capital spending boom and the war for capital, if anything, [bond yields seem] a little low. .. It’s just been like a slow, fundamentally driven march upward in yields. @financialtimes.com www.ft.com/content/7410...

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— Carl Quintanilla (@carlquintanilla.bsky.social) September 10, 2026 at 11:00 AM

Damn, Stan.

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— Carl Quintanilla (@carlquintanilla.bsky.social) September 10, 2026 at 11:08 AM

From the FT: [with emphasis and annotation added.] 

Anthropic and OpenAI’s bankers are lobbying for an investment-grade credit rating after their upcoming initial public offerings, a designation that would lower the borrowing costs for their ambitious AI infrastructure plans.

Morgan Stanley and Goldman Sachs have held talks with credit rating agencies in recent weeks on behalf of the two leading AI labs, as they look to gain access to the $11.7tn corporate bond market post-IPO, said people familiar with the matter.

...

Achieving an investment-grade rating from Fitch, Moody’s and S&P soon after going public would be a remarkable feat for the two lossmaking AI labs, unlocking big benefits for the companies and their infrastructure partners including Oracle and Nvidia.

The rating would open the door to pension funds, insurers and other institutional investors that take far more limited positions in riskier speculative-grade debt.

It would provide another example of Wall Street changing longstanding practices to usher in the three largest IPOs in history. SpaceX, which went public in June, was the first large tech company to receive an immediate investment-grade rating.

Elon Musk’s rocket conglomerate also benefited from changes to index rules that meant billions of dollars in passive investment tracking the Nasdaq immediately flowed into its stock.

Previous tech heavyweights such as Meta, Netflix and Tesla waited a decade or more after their listings to get a top-tier credit rating.

...

 A ratings bump could also help Oracle refinance some of its current debt pile after raising funds to fulfil a $300bn data centre build-out for OpenAI that has put it at risk of losing its investment-grade status following a recent downgrade.[Because it would be terrible if anything were to happen to the Ellison's massive fortune. -- MP]

 ...

Anthropic is expected to unveil its IPO prospectus soon, allowing investors to pore over its finances ahead of a listing that could value the five-year-old company at $2tn or more. OpenAI is expected to follow suit with an IPO next year. [That 2027 date is key context for the Hugging Face incidents. The company had already been forced to push its IPO forward from 2026 and really needed a win which probably had something to do with the criminally  negligent corner-cutting which led to the hacks -- MP]

Analysts said opaque finances and the start-ups’ use of flattering annual recurring revenue figures have masked their actual performance. [And in the distance you can hear Ed Zitron laughing. -- MP]

“Both companies have not provided concrete details,” one credit analyst said.

 

 

It turned out that Microsoft CEO Satya Nadella actually could overstate the breakthrough of the metaverse

Occasionally, sitcoms will go meta and play with the conventions of the genre, such as the way that huge, life-changing events seem to disappear from the characters' collective memories and are never referred to again. For example, years after Married... with Children dropped the disastrous storyline about adopting a small child, the actor's face was briefly glimpsed on a milk carton on the kitchen table.

Both Web3 and the metaverse sometimes feel like one of those abandoned storylines. It seems like they should still be a bigger deal, the sort of thing people would bring up more often, particularly given the fact that so many still-powerful individuals and institutions, from the company formerly known as Facebook to the New York Times ("Investors Snap Up Metaverse Real Estate in a Virtual Land Boom" -- Nov 2021), invested so much of their reputations in these next big things that seem inexplicable in retrospect and which many of us were calling out in real time.

In one of his recent epic posts, Ed Zitron specifically made the connection between the concept of hypernormalization and the strange silence about the collapse of the metaverse starting with this quote from Adam Curtis’ documentary Hypernormalization:

     The Soviet Union became a society where everyone knew that what their leaders said was not real because they could see with their own eyes that the economy was falling apart.

    But everybody had to play along and pretend that it WAS real because no-one could imagine any alternative.

    One Soviet writer called it "hypernormalisation".

    You were so much a part of the system that it was impossible to see beyond it.

    The fakeness was hypernormal.

Here's Zitron: 

While both the media and world governments were adept at making moves to sustain systemic thinking — that the system or systems know best and must be protected (we must prop up banks, we must make sure we’re all in offices, etc.), big tech tried and failed twice to force society to back their concepts, the first being a VC-led attempt to make Clubhouse the next Facebook (with the media attention to match it), the second being the doomed attempt to make the Metaverse the next internet, with the media dutifully covering it as if it were real along with consultancies like McKinsey and Deloitte. 

To be clear, there was never proof that the Metaverse was a real thing that anyone wanted, but because Facebook changed its name to Meta, the assumption was that the rich and powerful would not simply “do something for no reason.” It petered out because despite all the hype, there was very little to actually use, or invest in, or really do with it.

Yet the most important detail is how everybody went on with their lives and ignored that Meta burned $77 billion on nothing, [Zitron actually under states Meta's losses here which continued to accumulate after the $77 billion figure became public. -- MP] or that Microsoft (which bought Activision Blizzard under the auspices of the Metaverse) CEO Satya Nadella said he “could not overstate the breakthrough of the metaverse” in 2021 and then effectively shut it all down by 2023. Nobody was fired for the fuckup. Nobody got in trouble. No media outlet apologized for being wrong. As regular people were fired thousands at a time, tech executives like Satya Nadella and Sundar Pichai received tens of millions of dollars a year. Everybody acted like nothing happened.

Put another way, when regular people fuck up, they see themselves restricted and punished, fired, their credit ratings dropped, evicted from their houses, embarrassed in front of their friends and peers, and when corporations fuck up, the system accelerates to isolate them from damage, explain away their faults, congratulate them for trying, and then forcefully return “reality” to a point where everything they say is perfect. 

 Given that these very same people, boosted by the same publications, are spending not hundreds of billions but trillions of dollars, putting the markets and possibly even the economy at risk while doing considerable damage to the environment in pursuit of their next next big thing, it seems like their last couple of fiascos should come up in conversation a bit more often.

 

It's like something from a science fiction story. (No, it's literally* something from a science fiction novel)

[* Can you use literally to describe something being derived from something even if the result is not a direct quote? Well, I just did so apparently the answer is yes.]

This makes perfect sense when you think about it. Large language models are designed to generate plausible strings of text with respect to their training data. Think about all the times you've heard chatbots like Claude or ChatGPT compared to science fiction or described in sci-fi terms. If you ask an LLM what it's "thinking," it is not at all surprising that it would reference the sci-fi books and plot descriptions in its training data when coming up with a reasonable-sounding answer, particularly when you take into account the noise that comes with the feedback loops of agentic systems. 

From Cal Newport: [emphasis added]

OpenAI was looking at these reasoning traces to find unnerving examples of plotting behavior from its “swarm.” This seems like a natural thing to do, but there are two problems with this approach:

1. These chain-of-thought traces don’t necessarily reflect the actual logic behind an LLM’s ultimate answer or suggestion. Multiple studies have shown that these models sometimes invent reasoning that sounds plausible, but may be completely unrelated to how they arrived at the response. (See, for example, ​this paper​ from ICML 2026, or ​this paper​ from NeurIPS 2023.)
   
2. Research has also shown that referencing the fact that an LLM is an AI system in a prompt increases the chances that the LLM’s output will reflect sci-fi style narratives about AI running amok. Because it was trained on many such stories, the model assumes that this is the type of output it’s supposed to produce. If you take sci-fi tales out of a model’s training set, it’s less likely to talk in terms of AI running amok. (See, for example, ​this study​.)

Put these two observations together, and it’s clear that it borders on research malpractice to soberly report on carefully curated clips from these traces to imply that somehow the combination of these prompt loops and the LLM they are prompting is a unified sentient entity with malicious intent. It’s more likely that the LLM in question is simply post-hoc rationalizing its outputs with well-worn tropes it encountered during training.

Though much more difficult to study experimentally, I wonder if this might explain how frequently sci-fi and fantasy elements show up in cases of AI psychosis. 

Coming soon to a theater near you...

I'm sure Musk will deal with this with the grace and dignity we've come to expect.  

Steven Zeitchik writing for the Hollywood Reporter:

Over the course of a decorated career, Gibney, 72, had taken on Scientology and Enron, the U.S. military and Vladimir Putin, the Catholic Church and Wall Street. All of that prepared him, though nothing could really prepare him, for this magnum Musk creation — cinema’s premier curtain-puller on power revealing the man who has amassed so much of it. When it comes out this fall, Musk will look to change the game in several crucial ways, lining up a target that Hollywood never shoots at, seeking to become a hit documentary in an era allergic to them, and trying to open the eyes of American voters to a key Republican electoral arms dealer who Gibney says is mounting an unfair fight. At stake with Musk, its creator wants to tell us, is nothing less than the future of democracy. And to spread that message, he has enlisted some of the biggest media companies around — including, improbably enough, the one soon to be owned by Trump ally David Ellison.

...

So much Musk have we ambiently ingested these past few years that perhaps the best cultural gift might be a break from all that, an Elon-free zone populated with anyone besides the 55-year-old provocateur.

Yet Gibney aggressively wants to challenge that instinct, and he may have a point. None of what we have seen and thought about Musk can fully ready us for what the filmmaker has done here — an adventurous but methodical movie grounded in the thesis that, as he sees it, a dangerous huckster is stealthily aggregating power to exploit us, primarily by centralizing and controlling massive amounts of data. Gibney’s basic take on Musk is that he’s a confidence man whose power comes only from the stock market and disappears the minute we see through the facade of sales pitches — but can do a whole lot of damage until that happens.

The film world-premieres Sept. 8 at Venice. But its cultural reach will likely extend far beyond that. Musk stands poised to touch off a fresh wave of anger and fear among the millions already inclined to worry about him, into and well after the midterms, while fueling a whole lot of trollishness (and worse?) from the many who worship at the temple of Elon Musk, including Elon Musk.

Gibney has crafted a movie that, while not new in its specifics, is often damning in its totality, standing apart from anything the media entertainment complex has recently turned out — a portrait of power with the cinematic scope of All the King’s Men and the potential social impact of The Pentagon Papers. (“It’s rare these days to see a complete story instead of the fragments we’re used to,” says Anonymous Content’s Nick Shumaker, a producer on the film.) Some will surely find Musk overly negative and conspiratorial. Yet nearly every time the film seems like it might tip into paranoid fantasy, Gibney unearths a new fact or asks a new commonsense question to steady us back.

 

Too much to summarize but I do have to share this one anecdote:  

The insinuations of business hucksterism are one thing that could provoke him, more intimate details are another. Musk’s personal life comes in for tough scrutiny in the film, ... with a revealing childhood story Musk’s father tells in which a family friend undergoes a medical emergency while they were all on a road trip in Musk’s native South Africa. The man dies as everyone tries to resuscitate him. Young Elon, his father recounts, reads a comic book, unreactive through the entire episode. 

 

It's Labor Day, so we're taking time off and running a repost

 

It's Labor Day weekend so let's stop by Emma Goldman's ice-cream shoppe in Worcester for a hot fudge sundae and some anarchy. pic.twitter.com/LgPLuxkmWG

— Charles P. Pierce (@CharlesPPierce) September 4, 2021

Look for the Union Label

The ILGWU sponsored a contest among its members in the 1970s for an advertising jingle to advocate buying ILGWU-made garments. The winner was Look for the union label.[9][10] The Union's "Look for the Union Label" song went as follows:

    Look for the union label
    When you are buying a coat, dress, or blouse,
    Remember somewhere our union's sewing,
    Our wages going to feed the kids and run the house,
    We work hard, but who's complaining?
    Thanks to the ILG, we're paying our way,
    So always look for the union label,
    It says we're able to make it in the USA!

The commercial featuring the famous song was parodied on a late-1970s episode of Saturday Night Live in a fake commercial for The Dope Growers Union and on the March 19, 1977, episode (#10.22) of The Carol Burnett Show. It was also parodied in the South Park episode "Freak Strike" (2002).

"An analyst at JP Morgan described the approach as being like paying your mortgage with your credit card, which is unkind, but it's also basically what it is."

I realize we recommend a lot of Patrick Boyle videos but this is one of the best walk-throughs of one of the most important news stories of the moment (and 2026 has not been notable for slow news days).

From the video description:

Treasury Secretary Scott Bessent is trying to force down US Treasury yields with surprise bond buybacks — and it isn't working. In this video we break down Bessent's activist debt management strategy, why doubling the Treasury's long-dated buybacks is a bet on falling interest rates funded by short-term bills, and why his old boss Stanley Druckenmiller publicly tore the plan apart in a Wall Street Journal op-ed ("Let the Bond Market Speak"). We look at the collision with new Federal Reserve Chair Kevin Warsh after Jackson Hole, the 50% tariffs on Canada and the Mark Carney feud, "Operation Economic Outcast" and the secondary-sanctions problem with China and Iranian oil, the GENIUS Act and crypto's role in sanctions evasion, and Stephen Miran's case for the defense. The through-line: you can't trade around arithmetic. When a government goes to war with market prices, the bond market has an infinite balance sheet — and prices tend to win.

Elites in America

This is Joseph. 

This article got me thinking about the idea of elites. Because I am actually in agreement with one major thread here, which is that the focus in American life has been on intra-state competition and not inter-state competition. This shift in focus to internal competition has often gone poorly for states. Stalin weakened Russia versus the Nazi's by seeking internal purity. Byzantium lost to the Ottomans because they couldn't overcome internal strife. It is generally not a good state of affairs.

But I worry that we've move to an era where this good sense has been lost. For example, what national interest has the trade war with Canada served? Do any of the proponents actually think that it improves matters to put crushing tariffs on a neighboring country? Has anybody held this position prior to 2017 and what would have changed about the fundamentals in 2017? 

What is very much true is that everybody can identify elites that are acting poorly, at least from their point of view. I am even tempted to argue that some of them really are, mostly because of spillover from the culture, probably reached this status objectively. 

But what is really missing is focus on trying to improve obvious things in America. Now, you probably think the next words out of my mouth will be some variation on "both sides should", but I do think it is an actually asymmetrical problem. One one side you have people who have been . . . tentative about holding strong opinions or fighting. The other side appears to have started a war for no clear objectives. Or, if there are objectives, they are amazingly well concealed from everybody who has been thinking about the war. 

And Iran is a good place to end. It's cost a ton of money just as the social security fund is going to need some legislative tender loving care. It has lead to bases being bombed, Americans being killed, and there really isn't a great view of an exit strategy that doesn't start undermining the world's trade infrastructure. Bret Devereaux has a great piece on this topic (and I fear I might be part of the "Eye of Sauron" he was worried would be drawn to this piece) and it's pretty clear that everybody is worse off if the modern trading state is simply broken. 

It's also possible for the collapse of an unjust system to leave everyone worse off. Ask the Italians about the fall of the (slave holding) Roman Empire how great the aftermath was. 

So I think it is important that we go into the fall midterms with some focus about what the stakes are and how we can pull things back towards a better trajectory.