I didn't expect the Jensen Huang scandal to go away. I just didn't think it would not go away quite this forcefully.

In retrospect, the jackets pretty much screamed mid-life crisis. 

As Zachary Basu of Axios puts it (in an article written in that bastard child of Readers' Digest and USA Today style we've come to expect from the publication):

Why it matters: Nvidia CEO Jensen Huang has fashioned himself as the indispensable leader of an indispensable company — a $4.5 trillion behemoth with unparalleled clout in Silicon Valley, on Wall Street and inside President Trump's White House.

Is difficult to overstate what a key figure Huang has become in the massive (and increasingly precarious looking) AI bubble or what a central role Nvidia plays in the industry.

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— B.J. Gunts (@bjgunts.bsky.social) November 8, 2026 at 5:22 PM

 

‘Finance officials are closely watching the AI buildout to monitor for the possibility that an unexpected event could destabilize the global financial system... Central bankers “are clearly very, very, very anxious about this and thinking hard about these questions.”‘ www.cnbc.com/2026/11/11/n...

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— Jesse Felder (@jessefelder.com) November 11, 2026 at 11:02 AM

 

So it might be kinda a big deal if this scandal has legs.  

Josh Marshall writing for TPM: 

I’ve been going back and forth in my head about posts to write about the rapidly expanding scandal tied to NVIDIA CEO Jensen Huang and presumed Chinese spy Alice Huang (no relation). High-end processors, export controls, NVIDIA’s complex and bubbly investments in its customer companies … these are all highly technical topics where my knowledge is limited. (A parenthetical: I’m being immensely helped by email guidance from TPM readers in these fields, so keep those emails coming.) But I know a lot about the dynamics of political scandals. And if you do, you know that this one is very big because the essential elements are all visible from the beginning.

What are those essential elements?

There appears to be no serious question that Alice Huang was working on behalf of the Chinese government, working as a spy. We know her relationship with Jensen Huang was sexual; he has admitted that. We know that the president of the United States knew of this relationship and Alice Huang’s identity as a presumed spy for a year and took no action against Huang, either to press him to end the relationship, to distance himself from Huang, or anything else. (Unsurprisingly, reporting suggests that Trump didn’t want to do anything about it because NVIDIA’s commercial success was central to the AI boom propping up the whole U.S. economy.) We also know that Jensen Huang was successfully lobbying Trump to make it easier to sell NVIDIA chips to China — that’s what China wanted but it was also in the business interests of NVIDIA. Finally, a Commerce Department investigation into Alice Huang’s company, Megaspeed, was abruptly halted earlier this year and transferred to the Justice Department after what appeared to be an irregular intervention by NVIDIA’s general counsel. This report (paywall) from The Information last night finds that the relationship dates back to at least 2023 and that Huang’s company rapidly ascended to the ranks of NVIDIA’s highest tier of preferred customers. As The Information put it, “the two have built a rapport that facilitated the shipment of at least $7.5 billion worth of Nvidia chips through Chinese companies.”

Given all these data points, it seems very hard for me to see how Jensen Huang can come out of these various investigations unscathed even if there’s no major wrongdoing. The same applies to Trump — the reporting is crystal clear that he knew about this major security problem and did nothing. What makes this so potent as a scandal is that the key elements are all known. So reporters, politicians, everybody knows the overall story is bad. It’s just the details that remain unknown. That gives everyone huge incentives to keep digging and not let up.

 

NVIDIA is planning to oust Jensen Huang as CEO www.wsj.com/business/nvi...

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— Ed Zitron (@edzitron.com) November 11, 2026 at 2:34 PM

Charlie Warzel writing for the Atlantic (h/t Cheryl Rofer) makes an interesting point:

This scandal holds an irony that’s especially befitting of the AI moment. Huang seemingly has cozied up to his industry’s No. 1 foe, China, the boogeyman that, by the professed logic of Silicon Valley’s AI executives, is forcing many of his peers to build a product that they fear. Instead of denouncing him, Washington and Silicon Valley are motivated to circle the wagons around Huang, in part because doing so keeps the system moving and the money flowing. The build at all costs rationale that dictates treating China’s AI prowess as an existential threat is also driving the same people to brush past an egregious dalliance with that enemy.

This is the type of warped incentives that the AI race produces. Playing the game necessitates embracing preposterous risk to justify an idealized future outcome. To run this race requires its participants to withstand intense cognitive dissonance and behave in ways that make them appear ever more inscrutable and reckless to those who are not involved. If nothing else, Huang is a useful example to understand what happens when the fortunes of countries and many of its most powerful citizens are all tied up in one progressively intricate technological and financial bet. In this way, Huang is the AI boom personified, a hyperobject of a man who has wound his way into the center of the economy and whose influence, depending on how you look at it, may usher in either prosperity or untold doom.

 

 

Rofer (who racked up thirty plus years experience dealing with sensitive technology before joining LGM) has some more to say on the national security aspects:

Technologies, like vacuum equipment, that can be used for uranium enrichment and other parts of nuclear weapons production in addition to their conventional uses are called dual use technologies. In response to India’s nuclear test in 1974, a number of nations set up the Nuclear Suppliers’ Group to develop rules about sharing dual use technologies.

A. Q. Khan set up his own procurement network to build Pakistan’s nuclear arsenal. A number of companies were shocked (yes, really!) to find that they had contributed to the network, which led them to work with the Nuclear Suppliers’ Group to develop guidelines. “Know your customer” is central.

No such network seems to exist for chips, partly, I suspect, because so few companies supply them.

This, of course, is provoked by Jensen Huang’s fling with a Chinese spy. Huang has winsomely apologized publicly to his wife, but of course that is not the damage the rest of us care about. And the questions go beyond Huang.

What is the internal Nvidia counterintelligence program? How does it work with the government’s counterintelligence? How much information is protected? For those of us working on nuclear issues, the honey trap was the first thing mentioned in every counterintelligence briefing. It’s spying 101.

The Trump administration has never worried much about counterintelligence, using personal phones and Signal chat groups for conversations past governments would have conducted over secure communications. So it’s not surprising that Donald Trump knew a year ago about Huang’s dalliance with a Chinese spy, but did nothing. Hey, all the guys do that, right?

Marco Rubio, one of the last in the administration to have any concerns about such things, seems to have used appropriate channels to share the information. If Trump kept it covered up, it was likely through inadvertence or that it didn’t harm his accumulation of money.

It appears that China may have wanted access to the finished chips more than to details of their manufacture, but once they had the chips, it would help them to figure that out.

 

From Ed Zitron (who was blogging about MegaSpeed all the way back in March):

While I intend to go into much more detail on this in this week’s premium, I need to directly call out one big allegation of Culper Research’s short report on NVIDIA — that 20% of its FY 2026 revenues came from China, or around $43.18 billion. Per Bloomberg, Megaspeed also imported 50,000 more GPUs than NVIDIA originally reported to the US government. 

I trust Culper’s reporting, and think everybody needs to truly digest what this means.

1. It means that 20% of the largest company on the stock market’s revenue comes from illicit sales to China.
2. If that’s even half true — and I believe it, given everything else you’ve read today — that revenue is either going away or is long gone depending on how stupid NVIDIA has been.
3. It’s reasonable to assume that somebody is going to jail based on the sheer scale of the operation.
4. It’s also reasonable to assume that Megaspeed is, as Culper’s source said, the tip of the iceberg, as its orders only added up to around $4.8 billion.

And a few of the many details that are coming to light.

Jensen Huang had a relationship with an Nvidia executive who reported to him. www.nytimes.com/2026/11/11/t...

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— Ryan Mac 🙃 (@rmac.bsky.social) November 11, 2026 at 2:04 PM

(Axios) - Commerce Secretary Howard Lutnick was sent a highly classified memo warning about Nvidia CEO Jensen Huang's relationship with suspected Chinese spy Alice Huang, multiple sources familiar told Axios. @axios.com $NVDA www.axios.com/2026/11/10/l...

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— Carl Quintanilla (@carlquintanilla.bsky.social) November 10, 2026 at 3:57 PM

“.. Bessent confronted Commerce Secretary Howard Lutnick over a failure to place Nvidia customer Megaspeed on a list of companies that pose national security concerns ..” @axios.com www.axios.com/2026/11/11/b...

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— Carl Quintanilla (@carlquintanilla.bsky.social) November 11, 2026 at 8:22 AM

Maybe Bessent moved to a military base to hide from Lutnick.

— Ivan the K ™ (@ivanthek.bsky.social) November 11, 2026 at 11:13 AM

The Jensen section starts just after the 34 minute mark

Tesla to phase out car business, focus entirely on vaporware.

Collin Woodard writing for Jalopnik:

The incredible news just keeps coming after Tuesday's huge victory for everyone not named Elon Musk. After a little more than three years blighting our roads, filling divorce court parking lots, and getting recalled for all of its parts falling off, the Tesla Cybertruck is dead. Never trust Elon Musk further than you can throw him, but early Friday morning, Tesla's CEO tweeted that the company will wind down production of the Cybertruck before finally killing it once and for all at some point next year. 

Posting at 12:30 a.m. Texas Freedom Time, a very normal time that every major CEO is awake and making important business announcements, Musk tweeted, "Tesla will be winding down production of the Cybertruck at Gigafactory Texas around the middle of next year to make room for increased Cybercab production." So there's no word twisting or reading between the lines required. Tesla's Texas Gigafactory will cease production of the Cybertruck next year, and that's the only place Tesla builds the Cybertruck. 

That's basically the gist of the announcement. Tesla will continue to make cars for a while, but their current product line is very small and very old. And even if the Roadster makes it into production, something I'm inclined to bet against for various reasons, it would still be in the extremely high-end sports car market.

A trillion-dollar-plus valuation for any car company is silly, but a trillion-dollar valuation for a niche car company, with no mass-market vehicles in the pipeline, is insane. Excluding shady deals where Musk finds a way to funnel SpaceX money into Tesla (something that's about to get considerably more difficult and risky now that Elizabeth Warren is about to be let off the leash), the only profits Tesla is likely to see in the foreseeable future will come from two models dating back to 2017 and 2020, respectively. But Musk was never in the product business. He was in the next-big-thing business, and he has long since reached the point where he has no ideas for real, viable products that could justify the insane market cap of his company. 

Here are some reactions, starting with the guy who wrote the definitive book on the company.

The Cybertruck is dying because it sucks and people hate it, not because Tesla needs the production capacity for Cybercab Tesla claims to already have 125k units/year of installed Cybercab capacity, and has maybe a few hundred on the road, and they crash at rates that make scale a terrible idea

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— e.w. niedermeyer (@niedermeyer.online) November 6, 2026 at 5:23 AM

The cybertruck was a total disaster but without it we would never have had this one perfect quote. www.wired.com/story/owning...

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— Brian Barrett (@brbarrett.bsky.social) November 6, 2026 at 8:20 AM

 

Cyberpunk country is about how the singer's girlfriend broke down and his truck ran away

— Zuthal (@zuthal.bsky.social) November 7, 2026 at 12:40 AM

RIP Cybertruck. You are with the angles now.

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— Dr Dean Burnett (@drdeanburnett.bsky.social) November 6, 2026 at 3:18 PM

Revisiting "Russians, Straussians, soft landings, and hamburger emojis"

Here's what we were saying nine years ago. 

The second, and possibly more dangerous problem is that a propaganda-fed base has no capacity to self correct, rather it continues follow unsustainable paths that only gain momentum, often exacerbated by ratcheting mechanisms. Soon you reach a point where, even if the leaders accurately perceive the situation and realized the best solution, they can no longer reconcile that reasonable course of action with what the vast majority of their supporters have been told to believe for decades.

This is not the post I'd write today -- parts of it have aged badly, some even seeming a bit quaint ("you thought that 2017 was bad?") -- but my take on the larger dynamics, particularly how feral disinformation was damaging the GOP remains basically the same.

Here's what I said in 2016: 

 With misinformation systems as with plumbing, when the flow starts going the wrong way, the results are seldom pretty. This has been a problem for the GOP for at least a few years now. A number of people in positions of authority, (particularly in the tea party wing) have bought into notions that were probably intended simply to keep the cannon-fodder happy. This may also partly explain the internal polling fiasco at the Romney campaign.

 And from November 2017:

Since February, we've been discussing the curiously stable dynamic that keeps the GOP aligned with Trump even as his poll numbers slip. We've also argued that, at this point in time, this alliance holds the danger of an extraordinarily hard landing for the party. At the risk of overextending the metaphor, the Republicans are desperately hoping for a soft landing but are, at the same time, doing everything they can to maintain altitude.

As many have observed, the GOP of the 70s was able to minimize the long-term damage of Watergate by distancing themselves from Nixon and very publicly refusing to impede the investigation. The response of the party now has been just the opposite. It is as if the Republicans had responded to Watergate by doubling down their defense of Nixon, insisting there was nothing to the accusations, and calling for hearings into the crimes of McGovern, Humphrey, and LBJ.

Obviously, the decision to go all in on Trump is partially motivated by a desire to achieve as many policy goals as possible while still firmly in control of all three branches of government, but there's another factor which might be as large and which is possibly doing even more to eliminate the possibility of a soft landing.

.

If some poli-sci PhD candidate out there is looking for a thesis topic, you could do worse than the breakdown of Straussian communication matrices, or as I've put it, "drinking from the wrong pipe." The conservative movement was essentially a three-legged stool built on money, prioritizing strategic offices and elections, and misinformation. This last one was arguably the most important; it is also the one that has proven the least stable.

The initial purpose of this "noble lie" approach was to use the propaganda to keep the base sending money and showing up for the polls through of a combination of rage and fear. As with all Straussian systems, it was assumed that those in power would be in on the joke while the people who believed the lies would simply serve as electoral cannon fodder.

At some point though (I suspect inevitably), a couple of things happen. First, the believers become leaders. This is become blindingly obvious with Trump, but the children of Fox News have been in control of the party since at least 2010 and the roots go back further. Remember how Dick Cheney insisted while traveling that all hotel televisions be tuned to Fox News?

The second, and possibly more dangerous problem is that a propaganda-fed base has no capacity to self correct, rather it continues follow unsustainable paths that only gain momentum, often exacerbated by ratcheting mechanisms. Soon you reach a point where, even if the leaders accurately perceive the situation and realized the best solution, they can no longer reconcile that reasonable course of action with what the vast majority of their supporters have been told to believe for decades.

One of the essential steps for achieving a soft landing is getting your core supporters to face just how dire the situation is. Fox News et al., however, has simply lost the capacity to do this.

 

Now that this scandal has an espionage angle, expect market disruptions, congressional hearings, and a massive uptick in Spy-Who-Shagged-Me memes

In case you didn't hear.

The US intelligence community believes that Alice Huang, an executive at a Singapore-based Nvidia customer who was said to have been romantically involved with the US chipmaker’s chief executive, was recruited as a spy by China’s Ministry of State Security. ft.trib.al/DnT9JqY

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— Financial Times (@financialtimes.com) November 8, 2026 at 9:48 AM

Good summary from Moynihan.

The Huang scandal, in brief: *had an affair with someone suspected of being a Chinese spy *Trump was warned in May *Trump insisted on keeping Huang as a trusted AI advisor *Huang persuaded Trump to let him sell his chips to China after $25M ballroom donation www.nytimes.com/2026/11/08/u...

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— Don Moynihan (@donmoyn.bsky.social) November 8, 2026 at 2:50 PM

Pretty much everything was public knowledge here - the $25 million gift, Trump's faith in Huang, the sales to China - except for the affair. And it is possible the affair had no effect on what happened. Still, looks bad. Trump insisted on bringing Huang to China after he was left off a delegation.

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— Don Moynihan (@donmoyn.bsky.social) November 8, 2026 at 2:55 PM

 

Actually the affair was public knowledge too as far back as March. (Yet another reason to read Zitron.)

Where’s your ed at readers knew all about Megaspeed at the end of March! Fascinating that it’s potentially a honeypot www.wheresyoured.at/the-ai-indus...

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— Ed Zitron (@edzitron.com) November 6, 2026 at 9:25 PM

Activist short seller Culper Research even issued a report on it last May where it described the relationship as "uncomfortably close."

Fellow billionaires and tech bros are rallying to show their support. Excellent thread by Marcy Wheeler.

Insane shit going on at Xitter over the Jensen Huang honey trap story. (Bier was a top tech person at Xitter until recently.)

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— emptywheel (@emptywheel.bsky.social) November 8, 2026 at 2:52 PM

 

There's no telling how this will play out, but the potential for market disruption is big.

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— B.J. Gunts (@bjgunts.bsky.social) November 8, 2026 at 5:22 PM

Was busy all day. Am I to understand that Huang cheated on Huang with Huang but the third Huang may have been a Chinese spy and this could now undo the US stock market?? Is this the best you guys could come up with in my absence?

— Amanda Katz (@katzish.bsky.social) November 8, 2026 at 5:59 PM

"Utopia forgives everything"

From Wikipedia

 TESCREAL is a neologism proposed by computer scientist Timnit Gebru and philosopher Émile P. Torres. An acronym, it stands for Transhumanism, Extropianism, Singularitarianism, (modern) Cosmism, Rationalism (denoting the ideology of the rationalist community), Effective Altruism, and Longtermism. Gebru and Torres argue that these ideologies should be treated as an "interconnected and overlapping" group with shared origins.^[1] They claim these constitute a movement that allows its proponents to use the threat of human extinction to justify expensive or detrimental projects and consider it pervasive in social and academic circles in Silicon Valley centered on artificial intelligence. As such, the acronym is sometimes used to criticize a perceived belief system associated with Big Tech. 

Long but fascinating interview of Emile Torres describing the literal death cult (no, seriously, I am not exaggerating) that strongly influences and arguably dominates the AI industry.

I've pulled some key passages. The excerpt is longer than I'd like, but about two thirds as long ass my first pass. All quotes from Torres unless otherwise indicated.

 And the debate right now, the public debate about the development of superintelligent machines, should be between Team Human and Team Posthuman, but Team Posthuman has more or less monopolized the conversation. They've hogged the microphone.

So you're exactly right. So, for example, I mentioned that Yudkowsky is not anti-anti or pro-human, even though if you read his book If Anyone Builds It, Everyone Dies, you kind of get that impression. But he has explicitly said in interviews that once posthumanity arrives, then it may be unethical to continue to have biological humans.

And he draws this, you know, quite offensive ableist analogy between a posthuman choosing to have biological humans or children—or humans continuing to have biological humans in the posthuman era—and someone right now intentionally choosing to have a disabled child, right?

And in the same interview, he talks about how, you know, it might be good just to wipe all humans off the Earth. In other interviews, he said that if the only and reliable way to create superintelligences flitting about the universe, quote, "having fun," is to sacrifice all of humanity, then he would make that trade-off, right?

So he's on Team Posthuman, not Team Human.

The debate has to do with AI safety, which is exactly that dispute, the tension between the accelerationists and the doomers. The question is how to go about developing superintelligence. Everybody agrees, including Yudkowsky, that we need superintelligence. Superintelligence, as Nick Bostrom says, virtually all paths to a utopian paradise in the future take us through superintelligence. So we can't not build it. The question is when to build it and how, right?

And so you have some people who are on the doomer side, in the doomer camp within the TESCREAL movement, who are screaming that we aren't yet ready to build superintelligence. We don't know how to align it with human values. But what they mean by human values is the TESCREAL worldview, right?

So, for example, if there were a superintelligence that were aligned with my anti-TESCREAL worldview, and if this superintelligence were to shape the entire future of life in the universe, which is what they imagine superintelligence ultimately doing, they would think that's an existential catastrophe, right? Because what they want is a cosmic posthuman utopia, right?

So it's not about aligning it to, like, human values. It's really about aligning it to TESCREAL, anything other than that. I mean, literally, the definition of existential risk is any event that prevents us from establishing this, you know, posthuman paradise among the stars.

...

So again, for lack of better terms, there is a difference between terminal extinction, as I call it, and final extinction.

Terminal extinction is just a scenario in which our species disappears entirely and forever, full stop. That's the only condition that needs to be satisfied for terminal extinction to have happened.

Final extinction kind of builds on this, and it denotes a scenario whereby our species disappears entirely and forever, and we do not leave behind any posthuman successors.

All the TESCREAL people care about is avoiding final extinction. That is it. Many of them hold a pro-extinctionist view, according to which we should bring about terminal extinction without bringing about final extinction. Which is just to say we should survive for long enough to create our posthuman successors. And then, once our posthuman successors are here, we should dip out. We should, you know, follow the dinosaurs and the dodo into the eternal grave of extinction, right?

And so it's just—I find it deeply frustrating to see the public conversation where people are like, you know, all of these TESCREAL guys, like Yudkowsky, who has deep roots in effective altruism and rationalism, which grew out of the libertarian transhumanist movement, talking about the importance of avoiding human extinction. Because most people sitting at home are interpreting that as, like, yeah, we should do whatever we can to ensure the continued survival of our species.

That is not what they're talking about. They're talking about ensuring we survive long enough to bring about the posthuman era. At which point, who cares what happens to the 8.3 billion people on Earth? You know, we're just irrelevant at that point. And from a grand cosmic perspective, we're utterly insignificant, right?

So our role in this whole eschatological scheme is ultimately to be the transitional species between the biological and digital realms, right? And that is our role. And once our eschatological duties have been discharged, there is no reason for keeping us around.

So this is a deeply anti-human position.

...

Just as a quick side note, I mean, long-termism tells billionaires exactly what they want to hear. It says not only are you morally excused from helping the poor or, you know, focusing on animal welfare, you know, here-and-now kind of problems, but you are a morally better person, a superior person, for focusing on the far future.

...

I mean, EA has been described by Molly Lieberman as a bait and switch, where it sort of draws people in by advertising that they care about, you know, alleviating global poverty. And then, once people are in, they say, "Well, actually, there's a much better way to do the most good: if you can positively affect a tiny, tiny percent of the trillions and trillions and trillions of future digital people spread throughout the universe, the amount of good you'll do, in terms of expected value, is just many orders of magnitude greater than if you were to lift the 1.2 billion people in multidimensional poverty today out of poverty."

...

NEWPORT

Interesting. So, I mean, is this going too far to say? Because this is what's occurred to me: when I think about this type of long-termist, expected-value-style utilitarianism, where, you know, an individual human's life—you move away from that sort of fundamental natural-law, religious principle at the core of, you know, all normative moral thinking, of humans being infinitely valuable, a human life being infinitely valuable.

When you move away from that liberal conception, immediately what comes to mind is the 20th-century utopian movements. So if you look at far-right fascism, if you look at the far-left movements, the mid-century movements were completely willing for many millions of people right now to die because, yeah, but the utopia they were going towards was worth it.

So if you're in Nazi Germany, you're like, well, yeah, maybe it's not the best. We have to kill, you know, six to eight million people, but it's worth it. What matters is it's going to give us this sort of utopian state, and that's worth more.

Or if you're in Soviet Russia at a certain point, like, sure, half of Ukraine is dying from starvation, but the point is you have to break a couple of eggs to make an omelet, and the omelet is going to be this sort of utopian, you know, socialist-communist world.

And so, as soon as you move away from the precept that life is—you know, a human is infinitely valuable and has their own natural rights—as soon as you move away from that, we've tried this experiment. It ends in a place that we just universally look back and say, "That was really bad."

Am I going too far to put this in the same ontological category within the world of ethics?

TORRES
In my opinion, absolutely not.

Newport closes with this:

The Nazis did not get the thousand-year Reich, but tens of millions of people died. The Soviet communists did not get their socialist utopia, but tens of millions of people died along the way.

So, we've learned this lesson: the pursuit of utopias where you're saying the value of humans alive right now pales in comparison to the value of the utopia that I am pursuing—we have seen that exact configuration throughout history. No one has ever successfully gotten to their utopia. Every time it's been pursued with any sort of well-founded vigor, it's been a blight on human history.

Remember that definitely-not-financial-advice didn't give anyone yesterday?

**

 Here's the larger picture.

This is what a blue tsunami looks like, apparently @finviz_com

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— Mike Zaccardi, CFA, CMT (@mikezaccardi.bsky.social) November 4, 2026 at 1:00 PM

I haven't had many chances to say this in the over a decade we've been running this blog, but this strikes me as the market behaving perfectly rationally. 

As mentioned frequently before, Trump was combining Hoover's tariff policy with Nixon's approach to Fed independence, both cranked up to eleven, while deporting a large part of a key segment of the labor force, all combined with massive deficit and rampant corruption. Restoring at least some measure of checks and balances reduces a number of risks to the economy (and possibly reduces the chance of escalation in Iran) and it makes sense for the broader market to reflect that.

Best day for the Dow in 19 months. @barchart.com

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— Carl Quintanilla (@carlquintanilla.bsky.social) November 4, 2026 at 2:59 PM

As for the isolated losers, we've already discussed some of the reasons Elon Musk is screwed, starting with but by no means limited to this: 

New Dem Texas AG Campaigned on Investigating Elon Musk

“If we’re giving Elon Musk preferential access to state contracts because of his wealth and connections, that’s corruption,” Nathan Johnson tweeted last month. “We cannot put the interests of our state aside to pay monopolists and insiders three times what their competitors charge. I’m ready to investigate.”

Musk moved the heart of his operations to Texas in the past few years — Tesla in 2021 and SpaceX in 2024 — to escape California woke. That could backfire now, as Johnson will have the power to probe and prosecute state-level crimes without needing any DOJ cooperation.
- Kate Riga

 

 Elon Musk Spent Almost Half a Billion on the Midterms

It was a whopping $474 million — the most given by any one donor in a single election cycle in American history. And it didn’t work out.

In Texas in particular, Musk contributed $168 million to the Senate leadership fund, the vast majority of which went to Ken Paxton’s failed bid for Senate.

He has a Super PAC of his own, America PAC. Musk contributed around $216 million to America PAC this cycle.

All this makes Musk’s 2024 giving seem like small change. He gave $290 million in support of Trump that year. He then gained unprecedented access to the highest levels of government, and started off 2025 by unleashing DOGE on a spree of firings and agency shutdowns that are still rippling throughout the government and world.

He spent around $180 million more in 2026. Now, he’ll have a Congress and several state governments — including his home state of Texas — in opposition.
- Josh Kovensky

 But why did the rest of the Magnificent Seven,* with one notable exception, actually see their stocks go up? 

Here's my take. The biggest short term impact of the blue tsunami is likely to be a slow down in data center construction. I'm not sure how much of a hit companies like Amazon and Microsoft would take from this. They're already major players in cloud computing. It's even possible that, given the concern over AI capex, they might benefit from an excuse to slow down.

Google et al were all massively profitable companies before the AI bubble. NVIDIA? Not so much. Though always a profitable company, it was nothing like the NVIDIA of 2026. Its market cap has increased 1,300% in the past four years (with revenues following a similar trajectory, almost entirely due to the AI bubble). If the data center build out (by some metrics, the largest infrastructure project in history) slows to a reasonable rate, the main supplier of chips for that build out could very well take a hit.

Of course, at the end of the day, Silicon Valley's is still tied to Trump in numerous ways, and that's a relationship that is likely to haunt them for a long time. 

 

Let's not forget how quickly the tech executives got on their knees and kissed up to Trump immediately after he was elected. No flip-flopping allowed, fellas! You made your bed. You loved being friends with the Trump admin. www.cnbc.com/2024/11/06/t...

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— Ed Zitron (@edzitron.com) November 4, 2026 at 9:45 AM

 

 

*

**

 My first screen cap caught the numbers rolling over like an old time odometer which was too cool to leave out. 

 

Short SpaceX.* Short Palantir.*

*Not financial advice. 

Sherrod Brown is Back, Baby

We’ve got another flip on our hands! Brown has defeated the bodacious Sen. Jon Husted (R-OH), per the Associated Press.

This is in keeping with a trend we’ve seen for a few cycles now: Appointed incumbents just do not have the same juice as elected incumbents. Brown will now serve out the rest of Vance’s term and have to run again in 2028.

Silicon Valley haaaaates Brown and spent heavily against him. Alas, ’twas not enough.
- Kate Riga 

 

There are a number of tech firms, wildly overvalued and heavily dependent on government contracts, that were working under the assumption that the Trump administration was about to pour a river of money into their coffers. SpaceX (Musk) and Palantir (Thiel and every bit as evil as you'd expect) are at the top of that list. 

These companies now face a very different world. The Golden Dome likely to be dead in the water as soon as the new congress is seated. Artemis may not be safe as the budget crisis looms. Every contract is going to scrutinized. And I'd be surprised if we don't see a general belt tightening on defense spending which is the bread and butter of these companies. 

Speaking of SpaceX, if there's one state government that Elon doesn't want to piss off, it's Texas after moving both of his actual companies out of California to the then friendlier Lone Star state. In retrospect, spending hundreds of millions of dollars attacking Texas Democrats (a party that now holds the office of governor, lt. governor, and state attorney general) may have been a mistake. 

It doesn't help that Musk and Tech Bros in general are currently about as popular as anti-biotic resistant gonorrhea or that the GOP and Silicon Valley have recently formed an ardent mutual admiration society (see yesterday's post). As previously mentioned, going after Musk, Thiel, Zuckerberg, Ellison, and the rest is both good politics and good policy. 

 

Fox News follows the party line on data centers

Opposition to data centers is generally described as "bipartisan" and that's true if you're talking about polls of voters. If you're talking about the Republican establishment and conservative media... not so much.  

From

Fox News’ pro-data center coverage increased by 420% following sobering GOP memo about data centers and midterms 

by Ilana Berger writing for Media Matters for America.

The volume of pro-data center claims made by Fox News personalities and guests increased 420% after August 18, when the National Republican Senatorial Committee warned in a memo to tech companies that their communication strategy is failing to generate positive discourse around the issue and could cost pro-data center Republican candidates in the upcoming midterms.  

...

Media Matters reviewed Fox News’ data center-related coverage from the two weeks before the memo was reported and compared it to the two weeks that followed in order to determine what impact, if any, the memo potentially made on the network’s approach to covering data centers. Researchers examined pro-data center claims, which highlighted the benefits the facilities could bring to host communities, as well as anti-data center claims, which highlighted the leading concerns that communities have about the technology. 

The research found that: 

...

• In the two weeks before the memo was reported, Fox aired 39 pro-data center claims and 27 anti-data centers claims. The gap between pro- and anti-data center claims increased during the period following the memo’s release, from August 19 through September 2, when the network aired 203 pro-data center claims, or more than twice as many as the 86 anti-data center claims it made during the same period.
   

• Of 242 total claims supporting the construction of new data centers during the entire study period, more than half (56%) specifically argued that the technology is essential for progress and prosperity (136), and 105 claims (43%) argued that opposition to data centers in the U.S. is being fueled by bad actors such as the Chinese government. 

 Of course, pushing positions unpopular with your target audience can have consequences. 

Joe Wilkins writing for Futurism:

Recent reporting by Status found that viewership of Fox News is in freefall following the shift — plummeting down 27 percent across the month of October to an average of 1.1 million total viewers. That data comes from media tracking company Nielsen, which also noted that viewership across the months of July, August, and September shriveled by 16 percent compared to the previous three months. Viewers in the 24 to 54 age range — a crucial demographic — tumbled 24 percent over the period.

While there are likely a litany of other reasons for the shift, it’s nonetheless a striking correlation that coincides with a broader falling out with Trump as president. American voters overwhelmingly disprove of his handling of the economy, not to mention the extremely costly war on Iran.

 

 

 

"Be afraid. Be very afraid." A belated spooktacular post of market news

By this gets posted, there's a good chance that retail investors will be cheerfully buying the dip and Wall Street will be sunny again but a lot of veteran observers are still waiting for the really scary part.

“.. Everybody is trying to raise money for their build-outs before the liquidity dries up,” said Ben Connard. “Ultimately, there might not be enough ..” @wsj.com www.wsj.com/finance/the-...

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— Carl Quintanilla (@carlquintanilla.bsky.social) October 31, 2026 at 4:59 AM

(WSJ) - OpenAI has raised less than half of the $30 billion it had initially targeted for its latest funding round, with market jitters over the AI trade dampening investor appetite for one of the industry’s biggest names. @wsj.com www.wsj.com/tech/ai/open...

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— Carl Quintanilla (@carlquintanilla.bsky.social) October 31, 2026 at 4:43 AM

OpenAI trimming its target for its next round of funding from $30B down to $20B. This is probably not gonna help the vibes come start of trading on Mon. www.cnbc.com/2026/10/31/o...

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— Lora Kolodny (@lorak.bsky.social) October 31, 2026 at 2:22 PM

‘“What’s scary is the circularity both in fixed income and the equity world should there be a correction.“ This interdependence also makes the market less diversified. Shares of companies that depend financially on each other should move more closely together.‘ www.wsj.com/tech/the-tan...

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— Jesse Felder (@jessefelder.com) November 1, 2026 at 9:00 AM

 

 

 

 
George Steer writing for the Financial Times:
 

US tech stocks tumble as concerns over AI spending intensify
 

US tech stocks tumbled on Friday as revelations that Anthropic may receive a junk rating after its Wall Street debut fuelled fresh concerns over the borrowing spree underpinning the AI boom.

The Nasdaq 100 closed 3.5 per cent lower, following a $500bn rout in Alphabet shares on Thursday that sent the tech-heavy index down 1.4 per cent. The Nasdaq briefly entered correction territory, down 10 per cent from its October 6 record high, before recovering slightly towards the end of trade.

The index hit session lows on Friday after the FT reported that Blackstone told investors that Anthropic might not secure an investment-grade rating following its initial public offering, reversing its previous guidance.

A speculative-grade rating for Anthropic would hinder the AI company’s ability to access financing without the backing of higher-rated companies, which have been helping finance its vast spending on computing power. It comes when Big Tech companies are already spending hundreds of billions of dollars on chips, data centres and other AI infrastructure.

Anthropic, which revealed its IPO filing on Monday, was “critical” to the broader AI narrative, said analysts at Vital Knowledge.

Friday’s market rout began after Intel, in which the US government has a roughly 10 per cent stake, reported weaker than expected sales forecasts, undermining confidence in the broader AI boom. Its shares dropped 29 per cent — the chipmaker’s worst session since 1974.

“Investors are waking up to the fact that the chip shortage may be an illusion,” said the chief investment officer at a North American hedge fund. Demand for components “should not be soft right now, in this part of the cycle,” they added, referring to Intel’s earnings report.

...

“The combination of deteriorating cash flows and rising capital commitments means the debate over whether AI returns can ultimately justify the scale of investment may not be resolved any time soon,” said Emmanuel Cau, head of European and Apac equity strategy at Barclays.

“The direction of travel into next year should naturally be towards slower earnings growth” from the big technology companies, Cau said.

In a sign of the market’s turbulence, SoftBank-backed Nigerian finance group OPay, which was scheduled to debut on the New York Stock Exchange on Friday following its $4bn IPO, never began trading.

“I’ve never seen that before,” said one US asset management firm executive. “I’ve been doing this a long time through a lot of different IPO cycles.”

Crypto-linked stocks were also among Friday’s worst performers following a huge hack on Binance, the world’s largest cryptocurrency exchange. Robinhood fell 7.2 per cent and Coinbase lost 10.6 per cent.

Analysts warn that rising anxiety about the sustainability of the AI infrastructure boom would make it harder for companies to raise further debt and equity, which would weigh on spending on data centres

Those concerns also hit Asian tech stocks earlier on Friday, with Japan’s tech-heavy Nikkei 225 index closing down 2.1 per cent. OpenAI investor SoftBank fell 6 per cent, taking its losses from its June peak to 48 per cent.

“The major tech names are entering a no man’s land where they become uninvestable,” said Neil Newman, Japan equity strategist at Astris Advisory in Tokyo. “When heavyweights like SoftBank halve in value over a few months, it is neither a buy nor a sell. Investors will want to simply keep out of the way.”

 ...

Concerns about AI spending have grown as profitable companies such as Google plough their free cash flow into capital expenditure and increasingly turn to public markets to raise more funds.

Shares of Google parent Alphabet tumbled 13 per cent on Thursday after the company reported a second straight quarter of cash burn and revealed “AI mode” searches were threatening its core advertising business.

“Expectations built into [tech share] prices are being challenged and are now resetting,” said Hank Calenti, global markets strategist at SMBC. “The weakness is due to a combination of some firms not earning as much as expected and others spending more on capex than forecast.”

Prime brokerage data shows hedge funds had built up big exposure to the Magnificent Seven tech stocks heading into earnings season. Those positions were now being violently unwound, according to Charlie McElligott, a strategist at Nomura. 

Multi-media Friday -- three videos and a podcast

Solid interview of Ed Zitron by Jon Stewart. Not a lot new here for those of us who already have an unhealthy fixation on the AI bubble (you know who you are), but an excellent overview for the well-informed but not obsessed. 



 

From the Internet of Bugs, Carl Brown explains why the "worst cybersecurity incident in history" is less scary than you think.  

Watched this movie a couple of nights ago on Kanopy (arguably the best streaming service, even without taking into account the fact that it's free). Not a lot of new information for those who followed the rise of crypto but it does a fine job capturing just how crazy that world is. 

Ben McKenzie married Morena Baccarin and once punched the Joker's face off but his anti-crypto advocacy is still the coolest thing he's done. 




I've got an actual thread coming up on the state of Netflix. I'll be relying on reporting from the LA Times for the details, but for the bottom line you won't do better than Masters and Belloni.
 

The downside of getting hundreds of millions from Elon Musk is that it comes from Elon Musk -- part 3

Picking up from here and here.

 I didn't mean for this to be a series but I keep coming across more news stories that illustrate the point. 

 

Frank Landymore writing for Futurism:

A new analysis from Guardrails Action, an AI accountability advocacy group, found that voters in key battleground states still harbor mostly negative feelings towards the AI industry, with the tech being such a toxic topic that it’s potentially driving voters to cross the aisle.

The survey, reported by Inc, questioned over 3,000 likely voters in Iowa, Michigan, and Ohio — states where close Senate races are unfolding — about their thoughts on AI.

AI, the results showed, is a political landmine, with even a whiff of Big Tech money being potentially disastrous for a candidate’s image.

Three quarters of the likely voters said that they would be less apt to vote for a candidate if they found out they had accepted a donation from an AI Super PAC.

Some felt even more strongly than that. A quarter said they would switch parties to vote for a candidate who took a strong stance against AI companies and data center construction.

“We found that the AI Super PACs were more toxic with voters than Wall Street, cryptocurrency or AIPAC,” Charles Blaettler, political director of Guardrails Alliance, a PAC that combats AI spending that the advocacy group is part of, told Inc. “The influence of AI money on elections and politics sits at this nexus of the anxieties that people are feeling about AI, and this increased disgust people have around corruption and special interest money and politics.”

 

Probably the only Herbie Popnecker/aerospace history post you'll read all week

 I keep meaning to do a long post on arguably the ultimate Silver Age cult comic, Herbie, a bizarre, out of nowhere character created by a journeyman and an artist of severely limited talent. The elements had no business working but somehow they came together perfectly, a chemistry that far more gifted creators have tried and failed to capture in various reboots.

 Herbie Popnecker's fans included Alan Moore, John Byrne, and Marv Wolfman who joked in the 70s that the only way at the time to figure out who held the rights to the character was to publish a new Herbie comic and see who sued you.

One aspect that added to the bizarreness of the proceedings was the appearance of contemporary celebrities including movie stars, athletes, and world leaders, the last of whom would often reach out to the "little, fat nothing" in times of crisis, providing an off-kilter but nonetheless informative view of popular perceptions of contemporary events.  

This example from April/May 1964 is a good reminder of how controversial the Apollo program was at the time. For context, keep in mind what had happened just a few months before. 

From the Space Review:

During a September 20, 1963 address before the 18th General Assembly of the United Nations Kennedy made a startling proposal:

Finally, in a field where the United States and the Soviet Union have a special capacity—in the field of space—there is room for new cooperation, for further joint efforts in the regulation and exploration of space. I include among these possibilities a joint expedition to the moon. Space offers no problems of sovereignty; by resolution of this Assembly, the members of the United Nations have foresworn any claim to territorial rights in outer space or on celestial bodies, and declared that international law and the United Nations Charter will apply. Why, therefore, should man's first flight to the moon be a matter of national competition? Why should the United States and the Soviet Union, in preparing for such expeditions, become involved in immense duplications of research, construction, and expenditure? Surely we should explore whether the scientists and astronauts of our two countries—indeed of all the world—cannot work together in the conquest of space, sending someday in this decade to the moon not the representatives of a single nation, but the representatives of all of our countries.

Considering that the two nations had been to the brink of nuclear war only a year before, this was a rather startling attempt at rapprochement. It followed a similar proposal that Kennedy had made a month before to Soviet ambassador Anatoly Dobrynin.

 Though we can never know how things would have played out, it's also worth noting that LBJ was one of Washington's strongest supporters of space exploration going back to his senate days. The immense political capital he had after the 64 election certainly helped protect the program from cuts or even cancellation.

 

 

 

The downside of getting hundreds of millions from Elon Musk is that it comes from Elon Musk -- part 2

Even the NYT noticed. 

Following up from Friday.

NEW AD: Have you seen these anti-Talarico attack ads? Elon Musk paid for nearly all of them. The world's first trillionaire knows if he drags the most corrupt politician in Texas across the finish line, Ken Paxton will owe him everything. Elon Musk: Texas is not for sale.

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— Team Talarico (@teamtalaricohq.bsky.social) October 22, 2026 at 11:44 AM

 [You should definitely watch the ad.] 

Bayliss Wagner writing for the New York Times.

On the campaign trail in Texas, James Talarico, the Democratic nominee for Senate, is increasingly criticizing Elon Musk over his role in the race. Mr. Musk made a huge contribution this fall to a group aligned with Ken Paxton, Mr. Talarico’s Republican opponent, recent campaign finance disclosures showed.

The race in Texas, a pivotal contest that could determine control of the Senate, is now in part a test of whether Democrats can turn Mr. Musk into a political boogeyman and whether his infusion of cash can lift a Republican candidate who has lagged behind his opponent in fund-raising.

“Elon Musk wants our land. He wants our water. He wants our tax dollars,” Mr. Talarico said at a rally in San Antonio on Saturday, as the crowd booed in disapproval of Mr. Musk. “He wants his very own personal United States senator.”

Representatives for Mr. Musk and Mr. Paxton did not respond to requests for comment.

Mr. Talarico has stepped up his attacks on Mr. Musk after campaign finance filings revealed earlier this month that Mr. Musk, a Texas resident who has major business interests in the state, donated $158 million to a Republican super PAC that then flipped the same amount to a group allied with Mr. Paxton.

At the University of Texas on Friday, Mr. Talarico said Mr. Musk was trying to “stop the movement that we are building in our state.” The day before that, Mr. Talarico’s campaign released a digital advertisement accusing Mr. Paxton of being beholden to Mr. Musk. “Let’s remind Elon: Texas is not for sale,” says the narrator of the ad.

...

In polls and focus groups in Texas, voters have voiced concerns about corruption and the influence of the wealthy and powerful in politics, said Matt Angle, a Democratic strategist in the state. He argued that Mr. Musk “has made himself the face of” what some voters perceive as the Republican Party’s fealty to megadonors.

At Mr. Talarico’s rally on Saturday, the crowd roared when he brought up Mr. Musk and cheered loudly when he said his own campaign is “funded by 1.3 million individuals who have donated their hard-earned money.”

Mr. Musk has not campaigned with Mr. Paxton. But he has publicly endorsed him and has used his platform on X, the social media company he owns, to attack Mr. Talarico with growing frequency. Mr. Musk posted on X about Mr. Talarico 18 times last week, claiming Mr. Talarico “hates Texas” and disparaging him in other ways.

JT Ennis, a spokesman for Mr. Talarico, said Mr. Musk’s immense spending in the race “isn’t working, so he’s throwing a tantrum.”

For his part, Mr. Paxton speaks about Mr. Musk rarely, if ever, on the trail. But in a recent fund-raising email to supporters, Mr. Paxton praised him.

“Democrats are trying to buy President Trump’s Senate Majority,” Paxton says in the Thursday email, adding, “But Elon Musk REFUSES to let them get away with it.” Mr. Paxton wrote that he was “proud to have Elon’s support at this do-or-die moment in the election.”

 

 

A bad time to be a prognosticator

Early Sunday afternoon at LGM. 

 If today’s election in Serbia offers potential grounds for optimism, Brazil should take care of that. The main thing to add to the first round post is that the first round result was better than expected for Bolsonaro, and we should probably adjust our priors from “tossup, maybe ever so slight lean to Lula” to “Bolsonaro is the clear favorite.” His 2 point victory was a surprise, as Lula was expected to win the first round, with Bolsonaro expected to pick up a majority of minor candidate supporters. Post election polling has been tight but pretty consistent; the last 5 published polls all had Bolsonaro up by 1%; polling aggregators show the composite result as about a 1.5% Bolsonaro lead. So Lula supporters have to root for a fairly modest polling error, but it would need to be a polling error in the opposite direction of round one’s polling error. Possible! Not particularly likely. Gambling community sees Bolsonaro as a ~4-1 favorite which seems about right to me. Grim.

 

Later that same day...  

 

 

 

lol reminder that betting markets are extremely accurate measures of conventional wisdom

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— Josh Marshall (@joshtpm.bsky.social) October 25, 2026 at 5:47 PM

 

Marshall continued in following Bluesky thread [reformatted]. 

To expand on my point about these “markets” I’m not getting into the issues w corruption or damaging impacts of gambling. Their supporters in the political space habitually argue they are superior to polls in their predictive ability. In the simplest sense they’re just not. But to the extent they predictive they are operating off perceptions which come from polls. So they fail this test both empirically and logically. There are exceptions to this. Lightly polled races. Figuring in other factors besides polls. But big picture there are zero prediction market books on elections that don’t rely primarily on polls.

 

I'm on the record as being generally hostile to the whole notion of general election forecasting for a mass audience. With a few isolated exceptions, I little social good in knowing in advance how an election is going to turn out even when the process works, certainly not enough to justify the emphasis. Most election stories are empty calories, devoid of the information that would be of value of voters largely because they are filled with the cheap and tasty high fructose corn syrup of polls and models and prediction markets.  

As Jay Rosen and Margaret Sullivan keeps reminding journalists, "not the odds, but the stakes."  Obviously, this being an election in another country changes things -- we aren't the voters who need to be informed -- but the fundamental issue remains the same: why were predictions of who was going to win an election in a few hours newsworthy? Wasn't there something more important to talk about?

 

Brazilian Amazon deforestation falls to lowest on record as pivotal vote looms 

The downside of getting hundreds of millions from Elon Musk is that it comes from Elon Musk

We'll see how this plays out -- carpet-bombing anti-Democrat attack ads in Texas has been an effective strategy for thirty years now -- but this Talarico response strikes me as a smart approach. It avoids the "am not" trap of trying to rebut negative ads point by point which always comes off as weak and instead comes off strong by going on the offensive. 

The numbers I've seen has Musk polling in Trump territory and while those numbers may be a little better in the Lone Star state, anti AI/tech bro sentiment is running high enough for Abbott to recently come out as the tough-on-data-centers guy. Having Texans think of Paxton (already a toxic candidate) as Elon's boy can't be a plus. 

 

NEW AD: Have you seen these anti-Talarico attack ads? Elon Musk paid for nearly all of them. The world's first trillionaire knows if he drags the most corrupt politician in Texas across the finish line, Ken Paxton will owe him everything. Elon Musk: Texas is not for sale.

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— Team Talarico (@teamtalaricohq.bsky.social) October 22, 2026 at 11:44 AM

 

 I have no doubt that the anti-Talarico ads will continue to find an audience, but I am sure they'd be more effective if they didn't have to drag the baggage of both Ken Paxton and Elon Musk.