America is spending on AI like Rome at its peak.
$155B next year — more than the entire U.S. education budget.
But instead of securing dominance, this AI arms race could set us up for strategic decline. 🧵
$155B next year — more than the entire U.S. education budget.
But instead of securing dominance, this AI arms race could set us up for strategic decline. 🧵
The Spending Trap
Wall Street cheers record capex. Washington calls it dominance.
But $400B+ by 2026 risks repeating the Soviet defense race, Japan’s tech bubble, and the dot-com bust: growth by brute force, followed by fragility.
Wall Street cheers record capex. Washington calls it dominance.
But $400B+ by 2026 risks repeating the Soviet defense race, Japan’s tech bubble, and the dot-com bust: growth by brute force, followed by fragility.
Efficiency Disruption
China’s DeepSeek trained a GPT-4-class model for $3M.
OpenAI’s GPT-4 cost up to $100M.
Europe’s Mistral and open-source entrants are proving:
80% of the performance at 10% of the cost.
Scale ≠ leadership. Efficiency wins.
China’s DeepSeek trained a GPT-4-class model for $3M.
OpenAI’s GPT-4 cost up to $100M.
Europe’s Mistral and open-source entrants are proving:
80% of the performance at 10% of the cost.
Scale ≠ leadership. Efficiency wins.
The Energy Drag
AI data centers could consume 12% of U.S. electricity by 2030.
That means higher utility bills for households already crushed by inflation.
An invisible “AI tax” passed onto families.
AI data centers could consume 12% of U.S. electricity by 2030.
That means higher utility bills for households already crushed by inflation.
An invisible “AI tax” passed onto families.
Labor Backlash
30% of U.S. jobs could be automated by 2030.
Four automation tax bills are already in Congress.
Both parties are converging on tech skepticism. Political risk here is real — and bipartisan.
30% of U.S. jobs could be automated by 2030.
Four automation tax bills are already in Congress.
Both parties are converging on tech skepticism. Political risk here is real — and bipartisan.
Geopolitical Fragility
90% of advanced AI chips come from Taiwan.
China controls 90%+ of rare earth refining.
One export ban on gallium last year rattled the world.
Imagine that multiplied.
90% of advanced AI chips come from Taiwan.
China controls 90%+ of rare earth refining.
One export ban on gallium last year rattled the world.
Imagine that multiplied.
Investor Takeaways
Risks: Capex overbuild, margin compression, regulatory backlash, fragile supply chains.
Opportunities: Minerals, grid tech, reskilling platforms, compliance/governance tools.
Risks: Capex overbuild, margin compression, regulatory backlash, fragile supply chains.
Opportunities: Minerals, grid tech, reskilling platforms, compliance/governance tools.
America doesn’t need to stop investing in AI.
But blind spending is a trap.
Resilience — not raw scale — is the real edge.
Spend smart, or spend your way into decline.
Full memo here 👉 open.substack.com/pub/thealethea…
But blind spending is a trap.
Resilience — not raw scale — is the real edge.
Spend smart, or spend your way into decline.
Full memo here 👉 open.substack.com/pub/thealethea…
AI isn’t just about GPUs and data centers. It’s about fragility vs. resilience.
Fragility = overspending, foreign dependence, energy strain.
Resilience = efficiency, secure supply chains, sustainable energy, adaptable workforce.
Which path are we on? 🧵👇
Fragility = overspending, foreign dependence, energy strain.
Resilience = efficiency, secure supply chains, sustainable energy, adaptable workforce.
Which path are we on? 🧵👇
Reminder: U.S. Big Tech will spend $155B on AI in 2025 — more than the federal budget for education & training.
Meanwhile, lean rivals like DeepSeek and Mistral are proving you can get 80% of the performance at 10% of the cost.
Scale ≠ strategy.
Meanwhile, lean rivals like DeepSeek and Mistral are proving you can get 80% of the performance at 10% of the cost.
Scale ≠ strategy.
The “AI Trap” is simple:
Outspend → Inflate costs → Trigger backlash → Hand rivals the edge.
The winners won’t be the biggest spenders.
They’ll be the most resilient.
Full memo here 👉 open.substack.com/pub/thealethea…
Outspend → Inflate costs → Trigger backlash → Hand rivals the edge.
The winners won’t be the biggest spenders.
They’ll be the most resilient.
Full memo here 👉 open.substack.com/pub/thealethea…
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