AI OVERPRODUCTION

China seeks to commoditize their complements. So, over the following months, I expect a complete blitz of Chinese open-source AI models for everything from computer vision to robotics to image generation.

Why? I’m just inferring this from public statements, but their apparent goal is to take the profit out of AI software since they make money on AI-enabled hardware. Basically, they want to do to US tech (the last stronghold) what they already did to US manufacturing. Namely: copy it, optimize it, scale it, then wreck the Western original with low prices.

I don’t know if they’ll succeed.
But here’s the logic:

(1) First, China noticed that DeepSeek’s release temporarily knocked ~$1T off US tech market caps.

(2) Second, China’s core competency is exporting physical widgets, more than it is software.

(3) Third, China’s other core competency is exporting things at such massive scale that all foreign producers are bankrupted and they win the market. See what they’re doing to German and Japanese cars, for example.

(4) Fourth, China is well aware that it lacks global prestige as it’s historically been a copycat. With DeepSeek, becoming #1 in AI is now something they actually consider possibly achievable, and a matter of national pride.

(5) Fifth, DeepSeek has gone viral in China and its open source nature means that everyone can rapidly integrate it, down to the level of local officials and obscure companies. And they are doing so, and posting the results for praise on WeChat.

(6) Finally, while DeepSeek was obscure before recent events, it’s now a household name, and the founder (Liang Wengfeng) has met both with Xi but also the #2 in China, Li Qiang. They likely have unlimited resources now.

So, if you put all that together, China thinks it has an opportunity to hit US tech companies, boost its prestige, help its internal economy, and take the margins out of AI software globally (at least at the model level).

They will instead make their money by selling inexpensive AI-enabled hardware of increasing quality, from smart homes and self-driving cars to consumer drones and robot dogs.

Basically, China is trying to do to AI what they always do: study, copy, optimize, and then bankrupt everyone with low prices and enormous scale.

I don’t know if they’ll succeed at the app layer. But it could be hard for closed-source AI model developers to recoup the high fixed costs associated with training state-of-the-art models when great open source models are available.

Last, I agree it’s surprising that the country of the Great Firewall is suddenly the country of open source AI. But it is consistent in a different way, which is that China is just focused on doing whatever it takes to win — even to the point of copying partially-abandoned Western values like open source, which seemed like the hardest thing to adopt.

On that point: they did build censorship into the released DeepSeek AI models, but in a manner that’s easily circumvented outside China. So, you might conclude they don’t really care what non-Chinese people are saying outside China in other languages, so long as this doesn’t “interfere with China’s internal affairs.”

Anyway —this is an area I’ve been watching, and my reluctant conclusion is that China is getting better at software faster than the West is getting better at hardware. I think China is taking an asymmetric approach.

In a reversal of last century, the West is going closed: closed source, closed markets, closed borders. For understandable reasons.

But China is going open because it suits them. For similar reasons to why Meta open sourced Llama.

https://twitter.com/deanwball/status/1900601413148811474

How did China go from Maoist to capitalist?
Well, Deng took power in 1978.
He inherited a brainwashed agrarian communist state.
And couldn't reform the whole country at once.
So...he set up a few key zones on China's coast.
He fenced them off, and introduced capitalism.
Of course, that worked.
With success, he gained political capital.
He used that to expand the special economic zones.
These zones had a new social contract.
He'd essentially refounded China — but fractally.
Those zones expanded till they took over the old China.
And that's how China went from Maoist to capitalist. The idea that "Deng refounded China" is obvious yet non-obvious.

It's obvious because China failed under Mao & succeeded under Deng. It's non-obvious because many want to maintain China is on the communist left, when it's really on the nationalist right.

https://x.com/balajis/status/1771899715191460187

Everyone wants to reindustrialize.
No one wants to remember why the US deindustrialized in the first place. Basically, tradeoffs exist.

The real problems of pollution and industrial accidents led to the proliferation of environmental and labor laws.

And after generations in the farms, mines, factories, and fields, many welcomed higher-paying and healthier work.

Of course, the cost of offshoring manufacturing is now clear. But it is important to understand that there were at least medium-term benefits in terms of reducing accidents and pollution. Because those benefits will go away if you naively reindustrialize.

Basically, mining and manufacturing were tough jobs that are now romanticized in the abstract but that can be difficult to recruit for in the concrete, *especially* if the resulting product needs to compete with China in a global market on price.

Your people need to work really hard, really smart, and really cost-effectively to compete. That is tough.

(Some are kind of talking about sending the effete intellectuals to the mines, Mao style, which is a “romantic” regression that does have many unfortunate precedents in history.)

Anyway, yes you can maybe increase safety or reduce pollution today with modern techniques — but physical risk will always exist. And without taking some physical risk you won’t ship a globally competitive product at a globally competitive price.

I like @bungarsargon but this is incorrect.

If it was just a matter of price, then maybe tariffs could work. Just bring those jobs home!

Except China isn't cheap labor anymore. They're highly skilled. And skill doesn't easily come home.

Tim Cook explained this in 2018:

https://twitter.com/EricAbbenante/status/1900743275117768788

Unfortunately, China is far ahead here too.
They have robotic dark factories with no humans.
The complete opposite of "slave labor."
Important to understand the real challenge.
You can't solve this with a quick tariff.
@billmaher @bungarsargon @bariweiss

https://x.com/ErikGroset/status/1900964107622510797

US universities were the best in the world when they sourced the best in the world. But now they don’t do that, because of DEI. And soon they can’t do that, because of visas.

So, they just become regional players.
And China takes the #1 spot.

https://twitter.com/eigenrobot/status/1899650875083145613

US universities were set up to skim the cream of the world. If they shut down recruiting of foreign students and faculty, they’ll be limited to working with the ~4% of the world that lives in the US.

Reducing the recruiting pool by 25X means it’s unlikely to retain global #1.

FROM MAGA TO CHINA
Here are four things MAGA is getting wrong, and why it's handing over the world to China.

(1) First, MAGA correctly understands that America’s economic position is in decline but thinks this is due to economic competition itself, rather than lack of competitiveness.

(2) Second, MAGA also understands that the US has wasted trillions abroad in foreign wars, but thinks the problem is global leadership itself rather than poor leadership.

(3) Third, MAGA knows that their Blue American enemies have allies abroad, but has incorrectly overreacted to this by treating every non-Red-American as an enemy.

(4) Fourth, MAGA sees the billions of dollars flowing from the US to foreign recipients, but isn't grasping that the US can only print those dollars in the first place so long as it's the hub of a global empire.

When you put these together you can both understand MAGA's actions and understand why they will not lead to the intended result.

Basically: MAGA is hyperfocused on cutting off any apparent flow of funds from Red Americans to Blue Americans and non-Americans. And they only have ~500 days in power. So they're trying to quickly shut off imports, close down institutions, and exit all wars.

OK.

Except the reason the imports exist in the first place is because US products aren't competitive relative to Chinese products (or Fed printing). The reason those institutions exist is because the US set them up to run the world. And the reason those wars are happening is not because of American leadership per se, but because of the absence of good leadership.

If you shut all of that down at once — if you abandon global competition and global leadership — you shut down American Empire, and with it the ability to print money. And then everyone in that empire has a very bad time. With all that said, we should have a lot of sympathy for the turnaround attempt, because this is the Flight 93 Administration. They've bravely rushed the cockpit and taken control from the terrorists, but the ship of state might just be irreversibly vectored into the ground.

We are after all talking about decades of accumulated problems, from Social Security to lack of competitive industry. These problems may well be unsolvable. To mix metaphors, it's easy to Monday morning quarterback and extremely hard to quarterback.

Nevertheless, sometimes an outside perspective is helpful. So, let's go through the points above:

(1) The issue is lack of competitiveness, not competition itself. You'd know the US was successful if American cars were outcompeting Chinese cars in neutral third party markets. Tariffs won't do that, but maybe deregulation could. Otherwise you get this map, with China moving into Canada/Mexico/Western Europe now that they've been cut off by US tariffs:

(2) The issue is lack of leadership, not leadership itself. Yes, Biden blew up Nord Stream 2. But think about what that means — the US is in such control of Germany that it can blow up a key pipeline within the country with no consequence! So, obviously, you can't blame Germans for their domestic situation. Red America should simply assume control of the country and reform it rather than cutting it loose and having it fend for itself, with Blue-selected politicians in charge and China waiting in the wings. They should reprogram the Terminator. Basically, success doesn't look like cutting Germany loose. That will just result in a neutral or even hostile Germany down the line.

(3) The issue is the far left, not non-Red. It's extremely dumb for Red America to turn even Canadian conservatives like Pierre Poilievre into reluctant enemies. They just revived the left in Canada for no reason and now there is a hostile blue power on their border.

(4) The issue is mismanaged empire, not empire itself. Perhaps the deepest point is that MAGA really thinks American power comes from the 77M Red Americans and their muscle, as opposed to the 1B+ in the global American Empire. Even if you grant that they have a higher percentage of soldiers — the economic heft of Red America is far less than the 1B+, their political control over the other 200M+ Americans is fragile, and they're facing the 1.4B Chinese. It's just foolish to attack all allies and trade partners — that is how you lose trade wars, and wars.

CITATIONS
A few links you might find interesting, from previous posts, supporting various subparts of the thesis above.

[0]: Seymour Hersh on how the US blew up Nord Stream in Germany without consequence: seymourhersh.substack.com/p/how-america-…

[1]: Rather than cutting the EU lose, reprogram the Terminator: x.com/balajis/status…

[2]: Ten Points on why tariffs are bad: x.com/balajis/status…

[3]: Ukraine may actually be the climactic battle of the Thucydides Trap. Even if it shouldn't have been started in the first place, a precipitous surrender there changes the world order: x.com/balajis/status…

[4]: There are only 77M MAGA, but 1B+ in the Golden Billion / American Empire: x.com/balajis/status…

[5]: The fundamental strategic constraint is the decline in G7 share of world GDP relative to BRICS: x.com/balajis/status…

[6]: Rise in Chinese free trade agreements: x.com/balajis/status…

[7]: Why deregulation is better than tariffs: x.com/balajis/status…

[8]: How the West lost Suez to the Houthis: x.com/balajis/status…

[9]: Why exiting institutions means losing them to China: x.com/balajis/status…

Unfortunately, the US Navy has been decisively defeated in the Red Sea. You can see it from the IMF Portwatch graph:

This has been clear since Biden announced the failed Operation Prosperity Guardian in late 2023. The US now lacks the combined military and diplomatic strength to stop the Houthi blockade, for structural reasons that will be difficult for the Trump administration to reverse. Let's go through a few of them:

(1) Technological disruption of the Pentagon. First, the Houthis have 1/1000 the cost structure. They can counter $2M in US military spend with $2K in technology spend. This means the ~$800B Pentagon budget may not be as effective as we think. It could be like any lumbering big company with a big budget that can be disrupted by a startup with better cost effectiveness. Except this time the "startup" is a group of heavily armed fundamentalists.

(2) Diplomatic disruption of the State Department. Second, the Chinese have been on a diplomatic offensive since early 2023, negotiating a Saudi/Iran treaty (without US involvement!) that puts them at the pivot of the Middle East. This means China has leverage over Iran, who in turn has leverage over the Houthis:

(3) Geopolitical disruption of the Red Sea. As a consequence, the Suez Canal is now de facto controlled by China, Russia, and Iran. Western ships can't get through, but the Houthis are allowing their allies through:

There are many other factors one could enumerate:

- the high level of organization of the Houthis
- the political capital spent dealing with Oct 7
- the low appetite for US intervention in the region
- the energy the US is already spending in Ukraine
- the lack of US capability in domestic drone mfg
- the failure of Navy initiatives like the LCS
- the 200X+ Chinese advantage in shipbuilding
- the level of fanatical Houthi commitment

But the net is that the Pentagon lacks the military might to cost-effectively stop the Houthis, and the State Department lacks the diplomatic influence to halt the shooting.

These are structural issues — rot that's set in for decades and generations — that the new administration will find difficult to fix. Fundamentally, undoing the Red Sea blockade isn't a matter of will, but of capability.

Wish it weren't so.


I know people will say "the US didn't try", but there was quite a lot of trying and quite a lot of shooting:

“This is the most sustained combat that the U.S. Navy has seen since World War II — easily, no question,” said Bryan Clark, a former Navy submariner and a senior fellow at the Hudson Institute.

apnews.com/article/us-nav…

Meanwhile, China is signing free trade agreements.

https://twitter.com/mattparlmer/status/1897046044963483737

China is just pursuing the exact opposite strategy. They're trying to expand into as many markets as possible, because they think they'll win the game of global technocapitalism.

Here's the list of their signed and ongoing FTA deals.
fta.mofcom.gov.cn/english/fta_qi…

In a military confrontation between the US and China over Taiwan, who has the upper hand? Unfortunately, more like Superman vs Clark Kent. In a non-nuclear confrontation over Taiwan, missiles run out within days.

https://x.com/heresyfinancial/status/1894500776531337546

AGENCY VS NPC

What are the limits of agency?

1) Until five minutes ago, the West was run by NPCs. You slotted into your role, waited decades to be president, propped up the postwar order, established the establishment.

2) Now it's run by high agency people. You can just do things people. Tech people, Trump people. Because the Internet increases variance. It means that small groups[1,2] of highly motivated individuals — as small as one, like Satoshi or Elon or Trump — can change the world.

3) But there are limits to agency. Historic forces, genetic constraints, physical limits. A high agency person can’t just grind their way into starting for the Lakers. They can’t intuit the preimage to a cryptographic hash. They can’t turn rye into wheat by pure willpower.

4) That way lies Neo-Lysenkoism. Lysenko was a communist who denied that genetic constraints existed at all — and executed Darwinists who thought they did. He believed rye could become wheat by pure willpower.

5) And, confusingly, the same NPCs that just ran the West also believe in a Neo-Lysenkoism where a Down's Syndrome patient[3] is only constrained by societal expectation rather than unfortunate chromosomal aberration. Genetics denial also underpins their insistence that XX=XY. And economics denial underpins most socialist policy.

6) So — wait. What then is the difference between the determined technocapitalist idea that “you can just do things” and the delusional communist idea that “constraints do not exist”? Does the far left also in some sense have a high agency model of the world?

7) To complicate this further, the technolibertarian view on agency often doesn't extend to the rest of the world. Deepseek can also just do things. As the military says, "the enemy also gets a vote."[4]

8) Moreover: high agency, taken to the ultra-alpha extreme, can impede large-scale cooperation. There is a reason beta cooperation arose[5]. Every man cannot be a leader on everything; indeed, he can only at most lead on one thing.

9) Steve Jobs' famous memo on how dependent he was on his species[6] acknowledged this. You are probably not leading the engineering of the screen you're looking at now. And you can't become a good leader till you've become a good follower, as you don't even know what good instructions look like.

10) As I think through this, I think the key distinction is numerical. The technocapitalist is soberly enumerating known constraints and calculating ways to solve for X=Y, while the delusional communist is simply asserting that XX=XY. And the technocapitalist also knows how to build teams, manage budgets, handle personnel, and generally acknowledge reality.

11) Or, to paraphrase Reinhold Niebuhr: may God give us the serenity to accept what cannot be changed, the courage to change what can be, and the mathematics to know the difference.

We can just do things.
But only if you can do the math. This post was spurred by the realization that:

(a) I generally agree with the high agency view of tech founders
(b) I generally disagree with the Neo-Lysenkoism of the far left
(c) I respect but am concerned by the high cooperation of the Far East, which is distinct from high agency
(d) I also respect physical laws greater than any man

And I just wanted to think through the issues.

CITATIONS
Some citations follow:

[1]: Good thread on Medicis: x.com/sporadicalia/s…

[2]: Good thread by @ADoricko on agency: x.com/ADoricko/statu…

[3]: Unfortunate Neo-Lysenkoist ad that is essentially genetics denial: x.com/the_beardedsin…

[4]: I don't think open source is the enemy. It's a turn of phrase to emphasize that the "high agency" model often doesn't account for other actors' high agency. High agency means high global volatility and high unpredictability.

[5]: China's cooperation game is a visual depiction of the complement to high agency: x.com/PicturesFoIder…

[6]: Steve Jobs was an extremely high-agency uber-alpha by anyone's definition, and even he acknowledged how dependent he was on the rest of his species.

FIRST CRYPTO PRESIDENT

Overnight, the vast majority of the net worth ($59B) of the next President of the United States is now held in cryptocurrency. This will hold true even with a 90% drop.

What are the implications?

1) First, President Trump just went from crypto being perhaps 1% of his net worth to 90%+. Many early Bitcoin, Ethereum, and Solana holders experienced the same thing.

2) Second, this phenomenon — the overnight relative devaluation of all non-crypto holdings — will be experienced by billions globally within our lifetime as fiat dies.

3) Third, every politician, influencer, and celebrity worldwide is watching mouth agog at the phenomenon. They’ll wait to see how it shakes out politically and financially, and if the memecoin shows staying power — big if! — they may do their own.

4) Next, if we do then get a large market with thousands of personal memecoins, it may actually be ok, because every buyer knows what they’re buying: the potential future brand value of the meme.

5) Much depends on how much value the TRUMP asset holds, if any. Other celeb memecoins went to zero quickly, but Trump is Trump, and has the unique qualities of (a) 100M+ followers, (b) daily non-stop coverage, (c) presidential immunity, and (d) unprecedented control over the government.

6) So, whatever form of political counterattack comes his way, Trump is now strongly incentivized to legalize cryptocurrency in the most aggressive way possible.

7) Of course, this will be attacked as a conflict of interest. But Biden took 10% for the big guy, and Pelosi traded her stocks, and Hillary monetized her speeches, and Podesta had his $300B climate slush fund, and Obama got his Netflix deal. All became millionaires via various deniable forms of payola for Democrats.

8) So, Trump’s rebuttal may be that he’s just doing everything in public. His claim may be that disclosure solves the conflict of interest problem.

9) And that may be true, but it doesn’t fully solve the *alignment* problem. As context: the CEO of a company is typically one of the largest shareholders, but he is aligned with all his employees because they hold the same shares. All holders rise and fall as one, ideally.

10) By analogy, you would ideally want the President to be aligned with his citizens, such that they all held (say) USA coin, which gave some dividend from the profits of the USA. Kind of like the Alaska Permanent Fund.

11) So, one way of solving the alignment problem would be for Trump to airdrop some TRUMP to every US citizen. However, it might be easier for him to just send an email in his personal capacity to every Trump supporter offering them some free TRUMP.

12) Specifically: he could give 72 hours notice and all kinds of Democrats would also sign up for his personal email list, just to get the airdrop.

13) Would it be legal? Well, it is certainly legal for politicians to email out *requests* for money. But to my knowledge no politician has attempted a personal airdrop before, to *give* away money — and certainly not at this scale.

13) At current valuations, Trump could give $100 of locked up TRUMP to all 77M Trump voters via airdrop and it would “only” cost him $7.7B in an asset that was worth zero two days ago. Heck, he could give $500 per person and still have $20B+ left over.

14) Yes, it would cost Trump some of his asset to do this. But if you needed to join his email list to get the coin, and if the airdrop could be effected without any cap gains, it would “pay for itself” by turning his base into even more rabid supporters.

15) It could even give him the political support necessary to completely destroy the Democrat patronage machine. Basically, by joining Trump’s email list and supporting his crypto policies you’d get a kind of UBI.

16) And if 77M Americans are also benefiting from TRUMP, charges of conflict of interest go away. It’d be a new kind of social contract, a personal relationship between President & citizen.

Worth thinking about. To defend the asset after a potential crash, you need a huge base of holders. Not 770k, but 77M in the US.

So, the ideas below are fine, but the scalable strategy is an airdrop by the issuer. It boils down to enlightened self interest. Will Trump airdrop TRUMP to his email list?

https://twitter.com/balajis/status/1881031195615740208

A memecoin is a zero-sum* lottery.

There is no wealth creation. Every buy order is simply matched by a sell order. And after an initial spike, the price eventually crashes and the last buyers lose everything.

* It’s actually negative sum if the platform takes a cut. If you want to gamble as entertainment, in moderation, like at Las Vegas, ok.

If you are a professional trader, ok.

But most should buy assets that retain their value over the long run.

It is sometimes possible to add use cases to a memecoin, or to keep it in the headlines to keep its value aloft indefinitely. And we’ve seen examples of that as well.

But in general, don’t invest anything you can’t afford to lose.

More broadly: AI + social + crypto leads to retribalization of the Western world.

AI fakes mean you only trust info from your tribe.

Social media fragmentation means you only talk to your tribe.

And crypto tribalism means you only trade with your tribe.

https://twitter.com/bryce/status/1869993085146673424

What does retribalization look like in the physical world? This is Germany before Bismarck.

Bangladesh was a stable country.

But it didn’t want to give up a military base or take sides on Ukraine.

So in retaliation, psychopathic Democrats backed a coup.

Then the White House lied about it, just like they lied about Hunter’s pardon.

Now it’s going fundamentalist.

https://twitter.com/jonfdanilowicz/status/1863204108208898387

Karine Jean-Pierre lied repeatedly about whether Biden would pardon Hunter. That was a “conspiracy theory” back then and a conspiracy reality today.

Now apply that to claims about other matters. Is it really a coincidence that both Bangladesh and Pakistan suffered coups?

Gautam Adani is an Indian magnate.
He’s built ports, roads — everything.
One of the most prominent men in India.
Now comes the Democrat DOJ.
Indicting an Indian doing business in India.
For some ostensible violation of US law!
Why? Adani is perceived as center right.
And Democrats are now far left.
So it’s just lawfare across borders.
Like their attacks on Elon.
And on Israel’s right.
And on European conservatives.
But…I doubt the Trump admin continues it. Adani is to Indian ports what Elon is to American space. That’s why Indian leftists hate him.

But the left is too weak locally to attack him, so they whistled for backup to US Democrats.

After the Trump admin takes office, let’s see whether this case is still around in a year.

https://twitter.com/rajeevsrinivasa/status/1859448891067740465

What comes after wokeness?
Democrats align with Communists.
Newsom shows the way.
He’s lost DC, but has Xi.
So: TikTok becomes the Democrat X.
And California defies Trump tariffs.
It’s unfortunately the obvious move.
And already underway. You might know that Xi visited Newsom in SF last year.

You might not know that Newsom visited Xi before. And promised to be China’s “long-term, stable, and strong partner.”
balajis.com/p/only-newsom-…

FRANCE IS FOR CRIME, AGAINST FREEDOM

François asks a good question. My answer is: France doesn't care about crime, they care about control.

1) First, Macron hasn't wiped out crime among 70M Frenchmen with all the power of the French State. So it's completely unreasonable to expect Durov to wipe out crime among 1B+ Telegram users with his minimal power of content moderation.

2) Second, the deeper point is that the French state is deeply uninterested in public safety! They allow violent crime, fundamentalist terrorism, and drug dealing to run rampant in France. Just compare Paris to what it was a few generations ago.

3) Third, is Macron held personally responsible for every beheading, rape, and robbery that occurs on French soil? Is he jailed when traveling for violating the human rights of French citizens by not "moderating" his community hard enough? No, he is not. Even though the tools of the French state are vastly greater than those of Telegram, over a vastly smaller userbase. Again: Macron has ~70M citizens to deal with, while Telegram has almost 1B users.

4) Finally, we already know what a real anti-crime policy looks like. It looks like @nayibbukele. And President Bukele is for encryption, and has invited programmers to build on El Salvadoran soil — an offer they'd be well-advised to take up.

5) So: France is an anarcho-tyrannical regime. It doesn't need sophisticated surveillance to stop drug dealing — because it's all happening in public! They know exactly where the criminals are, and the victims too. They are literally setting up spaces for them to do drugs till they die.

I mean, does France need to imprison the CEO of Telegram to stop this? France has fallen to fascism (again).
Build in a country like El Salvador.
Where crime is low.
And coding isn't a crime.

https://x.com/nayibbukele/status/1827502729402437924

THE NETWORK SCHOOL

We got an island.

That’s right. Through the power of Bitcoin, we now have a beautiful island near Singapore where we’re building the Network School. We’re starting with a 90-day popup that runs from Sep 23 to Dec 23, right after the Network State Conference. Rent is only $1000/month with roommates or $2000/month solo. And we have plenty of day passes for visitors.

So, go apply online at ns dot com! Then read more below.

THE DARK TALENT
As motivation, I’ve always wanted to expand equality of opportunity around the world. Because my father was born in a desperately poor country, but with the right opportunity he was able to make something of himself. Like dark matter, he was dark talent. And for more than a decade I’ve been thinking about how to give others who are similarly situated the chance to make something of themselves. That is: I’ve been thinking about how to empower the dark talent of the world.

US universities used to fill this role, even imperfectly, and I loved Stanford when I taught there years ago. But the data shows they’ve declined in recent days. And they’re just not affordable or accessible to most of the world. So, it’s time for a new approach. And thanks to Saraswati and Satoshi, I have the resources to endow a new Internet-first institution: the Network School.

The purpose of the Network School is to articulate a vision of peace, trade, internationalism, and technology…even as the rest of the world talks about war, trade war, nationalism, and statism. To revitalize democracy for the internet era, with digital polities and verifiable votes. To train the next generation to be not just leaders of companies, but inspirations for their communities. And to pursue truth, health, and wealth by leveling up our attendees personally, physically, and professionally.

Let me now describe in more detail how the Network School works, who it’s for, and how to apply.

HOW THE NETWORK SCHOOL WORKS
The Network School is for people of all ages, not just the youth. And it’s meant to be lifelong rather than one-off, with both a structured and and an unstructured component. The structured part is about continuous daily self-improvement: learning skills, burning calories, and earning currency. Meanwhile, the unstructured part is about having fun and hanging out with people of similar values.

For short: learn, burn, earn, and fun.

Learn
The first part of the Network School is about learning technologies and humanities.

As motivation, the existing model of US undergraduate education is broken. You pay $100k+ for a four year degree, and then budget nothing for maintenance over the course of your life. It’s like paying $100k+ for a new car and budgeting nothing for maintenance.

By contrast, the Network School is about continuous education. It’s for remote workers, engineers, creators and digital nomads who want to integrate learning into their lives, rather than stopping everything to be a full-time student.

Here’s how that works. We set up mini-classrooms where you can drop in to see the problem of the day.5 You solve that problem and a proctor awards you a cryptocredential, a free non-transferable NFT sent to your crypto wallet that establishes “proof-of-learn.” Often your solution will involve putting code on GitHub/Replit (to show you understand a concept), or posting content to your social media profile (to show you understand a new AI tool). And over time, these cryptocredentials actually build up a cryptoresume proving what you know.

Our initial material focuses on founding tech communities, as distinct from tech companies. As such it touches on everything from crypto, AI, and social media to history, politics, and filmmaking. It should be useful even if you’re just growing a traditional company or building a following. Over time, of course, every branch of the sciences and humanities becomes relevant when building a community. So if this initial experiment works, we can expand branch-by-branch to build a new kind of university.

But we’re intentionally starting with something simple. Our learning is about continuous education, about solving the problem-of-the-day.

Burn
The second part of the Network School is about burning calories.

Longevity is important, but 20th century communities just aren’t physically set up to maximize physical fitness. Quite the contrary: the default mode of Western society is sedentary and sugary. Those who want to escape this need to roll their own nutrition and workout program, which takes time, money, and energy.

We’re changing that. I’ve teamed up with my friend @bryan_johnson to set up Blueprint-inspired food and fitness for the entire Network School community. Bryan will be on campus to set up the program, and then his designates will maintain it on a daily basis. Like many of you, I’ve been both fit and fat at various times, so this is a product I want to use myself.

Every member of the Network School gets a daily workout slot with a semi-personal trainer, much like a group fitness class. You run and lift in the morning at your chosen time, getting a proof-of-workout from your trainer. Your group holds you accountable for showing up. Then you get a box with your Blueprint-optimized healthy meals and head to work. The whole point is to provide willpower-as-a-service, where the community6 provides the discipline.

We’re starting with the basics of running, lifting, eating, and sleeping properly. The initial goal is to hit the limits of your genetics. But if all goes well, the biotech founders that come to the Network School will eventually help us all surpass our genetic limits, to live much longer than we otherwise would.

But again, we’re starting small! And so the “burning calories” part is about lifelong health and the workout-of-the-day.

Earn
The third part of the Network School is about earning currency.

We’ll have crypto prizes of the day for open source projects, AI content creation, and microtasks. There will be $1000 bounties every day for the duration of the program, similar to the various prizes I’ve posted on Twitter and Farcaster. And community members will post their own prizes.

Next, in keeping with the overall theme of self-improvement, we’ll have office hours to help with your job, your career, your visa status, and your funding. We’re much more invested in you than a typical college career center because our interests are aligned: the more you earn, and the stronger you are financially, the more you’ll eventually have to reinvest in the community.

Finally, we’ll have visitor hours with famous visiting technologists. As my friend Sriram noticed, when investors come through Singapore I typically do a podcast with them. Many will also visit the Network School to meet attendees, invest in them, or hire them. Others will give remote talks. And you can see the quality of visitors from the speakers in our conference and podcast.

So, earning is about constant career development and the prize-of-the-day.

Fun
All work and no play makes Jack a dull boy, of course. So the fourth part of the Network School is about fun.

This is the unstructured component. It’s most of what you’re here for. It’s just about assembling great people in one place: positive-sum people who believe in technological progress, internationalism, and capitalism. It’s your internet friends, coming from URL to IRL. Stanford introduced the concept of residential education, but this takes it to the next level.

In fact, our initial location is very similar to Stanford. It’s beautiful and sunny, and less than an hour from a major city (Singapore) with an international airport (Changi). That means you can be heads down during the week, head into the city on the weekends for fun, and get to just about anywhere in Asia within the same day. This is convenient for the >50% of the world that lives within the Valeriepieris circle.

We’ll do some group outings too, but most of the fun will be up to you.

WHO THE NETWORK SCHOOL IS FOR
Who is the Network School for? There are four lenses on this: demographical, ideological, professional, and personal.

Demographically
As mentioned, our focus is the dark talent. The more respect you have for legacy institutions, and the more respect they have for you, the less suitable you’ll be as an applicant.

So: the Network School is for Indian engineers and African founders, for makers from the Midwest and the Middle East, for Chinese liberals and Latin American libertarians, for Southeast Asia’s rising technologists and Europe’s remaining capitalists.

It’s for everyone who doesn’t feel part of the establishment. But it’s definitely not only for tech, because a community does not run on tech alone.

Ideologically
Ideologically, the Network School is for people who admire Western values, but who also recognize that Asia is in ascendance, and that the next world order is more properly centered around the Internet — around neutral code — than around either declining Western institutions or a rising Chinese state.

For example, the Network School is for those who understand that Bitcoin succeeds the Federal Reserve, that encryption is the only true protection against unreasonable search and seizure, that AI can deliver better opinions than any Delaware magistrate, and that democracy can be rejuvenated with cryptography. It is for those who believe in technology, harmony, internationalism, and capitalism. It’s for those who want Silicon Valley without San Francisco. And for those who want to found, fund, and find not just new companies and currencies — but new cities and new communities.

Professionally
Our ideal applicant is capable of remote work, or has enough savings to support themselves while at the Network School. For our initial cohort, we’re seeking three major groups of people in particular:

- Writers, artists, influencers, and filmmakers
- Trainers, athletes, coaches, and clinicians
- Founders, engineers, designers, and investors

These are, roughly, the demographics focused on learning, burning, and earning respectively. Of course, if you fall outside those categories but still think you have something to contribute, you should still apply to the Network School.

Personally
I should mention that the Network School is a “product” that I built for the young version of myself — the aspiring young engineer. This is the community I want to live in: a technocapitalist college town, a Stanford 2.0 that’s globally affordable and genuinely meritocratic.

So, I’ll be on campus full time. Bryan Johnson and I are supervising the setup of everything from bench press to French press. And we’ll eventually be recruiting faculty in the form of content creators, fitness influencers, and angel investors for the learn, burn, and earn portions of our program respectively. But all that in due time.

APPLYING TO THE NETWORK SCHOOL
Ok, so how do you apply to the Network School?

Just go to ns dot com and click "apply." We’ve set up a simple Luma page where you can apply in a few minutes. Then, if you pass review, we’ll send a second application where you pay rent. As mentioned, our monthly rent is $1000 (with roommates) and $2000 (solo). We also have daily and weekly rates too, but short-term visitors still need to apply.

The rent gets you an air-conditioned room on a beautiful island, with internet, gym, and access to all courses and community services. You’ll still need to handle your flights and pay for your food, but we think the overall package is extremely affordable. And so the Network School could be an amazing option for individuals or small teams looking to save money, get fit, and level up while living in paradise.

I’m looking forward to seeing you there! Just fill out the application at ns dot com, also linked in the tweet below. Go apply to the Network School at ! ns.com/apply

Indians will never be fighting for Taiwan because *Americans* will never be fighting for Taiwan.

Reason: the US military is made in China.

https://twitter.com/sidhant/status/1811459524198564318

Men like Garcetti are fooling themselves about the capability of their military just like they did about the senility of their presidency.

In reality, the US Navy is losing to the *Houthis*, who are China’s proxy’s proxy. They cannot beat China in a conventional conflict.

CHEVRON DOMINANCE

Technology is about to accelerate.
Because Chevron deference is over.
And regulators can't just make up laws anymore.
So, countless new startups just became feasible.
This is often spoken about in the abstract, so let's do three examples and two visuals.

THREE EXAMPLES

1) Genomics. Did Congress explicitly give FDA authority to regulate genetic tests in a bill like Kefauver-Harris (1962) or PDUFA (1992)? No, it did not. But in the early 2010s, FDA attacked 23andMe and forced them to take personal genomic tests offline. Implicitly, this was under Chevron.

2) Nuclear power. Did Congress explicitly give EPA and NRC the authority to implement ALARA? No, it did not. But these agencies came up with this "as low as reasonably achievable" standard, forcing nuclear energy to become as expensive as other energy sources by spending all the cost-savings on "safety." Implicitly, this was under Chevron too.

3) Cryptocurrency. You guessed it. Did Congress explicitly give the SEC authority to regulate crypto? No, it did not. Cryptocurrencies didn't exist when the 1933 and 1934 acts were written. However, the SEC says it has regulatory authority over crypto, even when Congress is deliberating on bills to the contrary. Implicitly, that claim of SEC authority too was under Chevron.

In other words: if a regulator can't point to the law that gives them the power, they may not have the power. And you might be able to win in a court of law.

So! For technology, the overruling of Chevron could literally reopen innovation in the physical world. This is on par with the 1991 opening of the Internet to commercial traffic. It deprecates the 20th century regulatory state. All the safety theater and security theater that they optimize for sounding good while actually being bad now has to face judicial scrutiny.

TWO VISUALS
How to visualize something as abstract as Chevron reversal? Well, Chevron is the company on which the 1984 Chevron deference case is actually based. And its logo had the arrows pointed down. But now that Chevron has been reversed, we're headed up.

And that's one way to visualize what reversal means: from Chevron deference to Chevron dominance. Because rule-of-law now dominates the lawless regulatory state. If the regulator isn't specifically authorized by statute, they can't invent some regulation to stop your innovation.

But there's a second way to visualize the reversal of Chevron: regulators just got disarmed, in the most literal sense. Because ultimately a regulation is a threat of state force. If you disobey one of a regulator's made up rules, they eventually get a cop to point a gun at you, implicitly or sometimes very explicitly.

^ The photo above is from the 2010 FDA raid on Rawesome Foods for selling raw milk to club members that consciously opted in to eating and drinking foods of their own choice. This may have also been done under Chevron deference because FDA only has the right to regulate interstate commerce, and not commerce within one state (which is all that Rawesome was apparently doing at that time).

To be clear, I don't have a position on raw milk other than I do think people should be able to choose their own foods. In their lawsuit against the Farm To Consumer Legal Defense Fund, FDA strongly disagreed, contending that "there is no generalized right to bodily and physical health" and you "do not have a fundamental right to obtain any food they wish.” These are real quotes from the now-defanged regulators; see the PDF link below.

Anyway — now you get a sense of how big a deal the Chevron reversal is, and how out of control regulators can get. The Chevron reversal strips regulators of the ability to make up random rules. It calls all their existing made-up rules into question. And it gives you the power to ask where in the law it says they can make up some new rule.

You know that saying — the only way they can stop you is to shoot you? Well, now they can't shoot you as easily. So we're going from Chevron deference to Chevron dominance.

I can already feel the T-levels across tech increasing.
Many people encountered insane regulators during COVID. I regret to tell you they've been insane for some time.

As mentioned, here's the FDA's official legal opinion[1] in the 2010 case with FTC LDF[2]. They explicitly contend that "There is No Right to Consume or Feed Children Any Particular Food" and "There is No Generalized Right to Bodily and Physical Health" and "There is No Fundamental Right to Freedom of Contract."

They aren't kidding, it's not quoted out of context. Chevron reversal defangs these guys. Very big day.

[1]:
[2]: farmtoconsumer.org/blog/2010/05/0…
farmtoconsumer.org/litigation/ey1…

DEMOCRATS ARE DESTROYING DEMOCRACY

The Democrat primary ended on June 8[1]. So why wasn’t Biden’s age openly contested?

It’s simple: Democrats are intentionally destroying democracy. They all knew Biden was infirm. But they waited till after the primary to acknowledge someone would need to succeed him. They waited till the people no longer had any say in who the Party would nominate. In other words, they waited till there wasn’t any shred of democracy involved in picking the leader of the Democrat Party.

What they want instead is a one-party state like California[2], where “elections” are held but a Party member always wins. They want intra-party selection, not competitive multiparty election. This is why Democrats seek to jail the opposition — so they can run without opposition. And this is also why they seek to control the Internet — so that the Internet doesn’t threaten their control.

All the Party really wants is to steal money and give it to their loyalists. That’s what the millions in student loans[3] and billions for nonfunctional trains[4] and trillions in printed bills[5] are all about — the greatest robbery in history. They just want the public's money, they don’t want the public to have any say over whether they're in power.

Unfortunately for them, the public Internet is outside their power.

Thus, social media circulated clips of Biden’s infirmity[6], even as regime media insisted he should be in charge of the country[7]. And prediction markets bet that Biden would be officially swapped out[8], even as officials tried to shut prediction markets down[9].

So, once again the Network triumphed over the State. Biden loyalists did their level best to control the debate in the smallest and largest senses of that term — by excluding RFK, excluding other outlets, muting Trump, “fact checking” one side, and attacking internet debate itself — but that faction within the regime just couldn’t hide the truth from Twitter.

THE PARTY DECIDES
Now everyone agrees that the hot swap is on. Because only Biden's faction wanted Biden to run.

Recall that after the Democrat primary ended on June 8, Obama very consciously put Biden on stage, let him stumble and mumble, and then held his hand[10] to usher him off stage.

That was the act of a savvy politician: Obama was ostensibly appearing with Biden to help him, but was really there to help finish him. He intentionally ushered the old man off in that way to visibly (but deniably) show the world how powerless the “most powerful man in the world” was.

That primed his team for an intra-party contest, and foreshadowed what just happened. The Party put Biden on stage for the debate, let him stumble and mumble, and is now very firmly ushering him off stage.

So, as often happens these days, internet “conspiracy theory” anticipated the regime’s now-consensus reality. Solzhenitsyn[11] put it well: we knew that they were lying, they knew that they were lying, they even knew that we knew they were lying…but they were still lying.

It suited the Democrat Party to lie, to keep an aged and infirm man as their nominal head, just as it suited the Communist Party to have Andropov and Chernenko[12] in nominal command towards the end of the Soviet era. With no one man in charge, each Party apparatchik can quietly loot the public blind, while letting the walking corpse take the public blame.

PRESIDENT NPC
Remember also: the nature of the NPC is that any one man is dispensable. The NPC’s role is to just repeat the party line, strengthening the Party in return for the support of the Party. The person is nothing, the Party is everything.

Biden simply took this principle to its absolute limit. With no onboard cognition whatsoever, he was the NPC President, and has been for years. A mindless mouthpiece for party propaganda, a hollow shell of a man, a Potemkin[13] president. He was nothing without the Party. And now, without the Party, he is nothing.

AMERICAN KREMLIN
So, what happens next? Well, in the late Soviet Union, there was a discipline called Kremlinology[14]. It was about inferring what that opaque and undemocratic system would do, about reading internal factional conflict from public hints.

Today the free world is online, while Washington itself is the Kremlin. So we do Kremlinology through digital prediction markets[15] that the state can't stop. There you will see the Obama faction, the Newsom faction, the Clinton faction, the Warren faction, and the likes of AOC and Bernie all viciously clash and contend for who will succeed President NPC.

Needless to say...there will be no democracy in those smoke-filled rooms. No public input into those Party struggles.

But there will be at the end. Because despite the Democrats’ best efforts to destroy democracy — despite all the show trials and Internet censorship and dissident prosecution — unlike the Soviet system, there does remain that extreme inconvenience of a presidential election.

So, it’s quite possible they pick Newsom. If the Party needs someone completely without conscience to succeed Biden and make centrist noises, he can do it.

Newsom is after all a 6’3” tall, handsome white guy with a beautiful wife and four children. Visually, he's a candidate from central casting. Sure, running him would be a completely unprincipled throwback for a Party that nominally opposes “white privilege” — but all that matters is that the Party retain control to loot the public, so they may get behind him regardless.

And what would Newsom do if he wins? Well, he was mayor of San Francisco and governor of California. So he will bring San Francisco- and California-quality governance to America — complete with dysfunctional million dollar toilets[16] and nonfunctional billion dollar trains[17].

Even more ominously, as you can see from the screenshot below and citations here[18-21] Newsom has already strongly committed in Chinese state media to be "China's long-term, stable, and strong partner". That's why Xinhua welcomes more Newsoms to come:

Moreover, as many in San Francisco saw to their dismay, Newsom personally welcomed Comrade Xi to California by escorting him from the plane, cleaning up the city, and (as you can see above) symbolically handing over the Golden State to Xi with a giant smile[22].

In short, Newsom has very publicly committed to reversing the last eight years of US resistance to China and completely conceding DC to Xi. If he is the candidate, that is the likely consequence.

FROM DEMOCRACY TO ONE-PARTY STATE
So as the journos keep saying, this election may in fact end America's democracy...but for reasons completely different from what has been publicly discussed. It's not the Republican who could end democracy, but the Democrat, in the sense of ending competitive multiparty elections and erecting a one-party state.

Newsom wouldn't acknowledge it, of course. His party will lie without apology just as they lied about Biden's senility. As Democrat Party leader he'd just maintain the pretense of democracy, just as the PRC calls themselves the "People's Republic" of China.

But in practice, as in his home state, and in many blue states, all multiparty elections will be replaced with de facto intra-party selections. They'll accomplish it through court-packing[23], gerrymandering[24], persecuting[25], and prosecuting[26] — as they've actually already done and promised to do!

So the threat to democracy is real. But it comes from the left. If Newsom wins, there is a real risk that he'll succeed in destroying democracy and replacing it with a one-party state.

As they've already done in California, and in China.


CITATIONS

[1]: Guam and US Virgin Islands were the last primaries, on June 8, 2024:

[2]: California is not a democracy, it's a one-party state:


[3]: Student loan forgiveness is a political bribe to Democrat Party supporters:

[4]: Not a single mile of track laid as of May 2023 for the $100B California train:

[5]: We don't even really know how many trillions they printed. That's all just seizure by the state — because as Milton Friedman said "inflation is taxation without legislation."

[6]: See for example the clip of Biden at the G7:

[7]: Remember how they called these "cheap fakes"? They even doxxed one of the RNC staffers for doing this. Regime media defended Biden to the hilt just days ago:

[8]: Polymarket is a prediction market that had a nonzero price of Biden getting swapped out even before the debate:

[9]: US Senators attacked prediction markets just last year:

[10]: Here's the video of Obama leading Biden off stage:

[11]: The full Solzhenitsyn quote:

[12]: Andropov and Chernenko were two Soviet leaders elevated at a late age that died within a year of taking office. They were then replaced by the much younger Gorbachev, who ended up ending the Soviet Union:

[13]: A Potemkin village in the Soviet Union was a fake facade erected for the purpose of fooling outsiders. In Woke America, given his now-acknowledged senility, Biden has been a Potemkin President — a fake cardboard cutout to fool the public.

[14]: Kremlinology:

[15]: There's now almost $60M in volume on who will be the Democrat Nominee in 2024, with Biden crashing:

[16]: It was a $1.7M public toilet in San Francisco:

[17]: California spent billions on a high-speed rail train, spending it all on "jobs" but not actually building the train. See here:

[18]: Xinhua: “Welcome more Newsoms to come”


[19]: China Today: “Newsom said he is willing to push California…to be China's long-term, stable and strong partner”


[20]: CGTN: “Newsom's visit…strengthen the relationship between China and the US”


[21]: CGTN: “California governor says China's success to benefit the world”


[22]: Here's Newsom symbolically handing over the Golden State to Xi:

[23]: Democrats proposed packing the court in 2021, one of the few remaining institutions that they don't fully control:

[24]: Here's ProPublica on how "Democrats fooled California's Redistricting Commission". It's a hint of the gerrymandering to come:

[25]: The Democrat Party has been persecuting Elon relentlessly with lawfare for opposing them:

[26]: Even Cuomo, former New York State attorney general, admitted the Trump prosecution was a show trial, a case that "should never have been brought" and would not have been brought if his "name was not Donald Trump":

And here are a few supplementary references.

[27]: Only Newsom Can Go To China.
This details how Newsom/Xi is shaping up to be the new Nixon/Mao:

[28]: Here's Newsom greeting Xi as he comes off the plane, a visit that only happened after Newsom visited Xi personally in China, and a visit that many other Democrat Party members tried to make happen without success:

[29]: And finally, and most importantly, here's video of Newsom admitting they removed San Francisco's drug addicts for Xi's visit...thereby conceding that Democrats had the power all along to clean up the city. But they did it for Communists, not for Americans.

apnews.com/article/presid…
balajis.com/p/california-i…
aei.org/op-eds/student…
cnbc.com/2023/05/17/why…
mises.org/power-market/h…

https://x.com/thevivafrei/status/1801347846974661062

apnews.com/article/biden-…
polymarket.com/event/democrat…
ft.com/content/9108f3…

https://x.com/chrissgardner/status/1802239454314410096

goodreads.com/quotes/1075742…
britannica.com/place/Soviet-U…
britannica.com/topic/Potemkin…
merriam-webster.com/dictionary/kre…
polymarket.com/event/democrat…
archive.is/5OHSb

https://x.com/CaHSRA/status/1785798979222925439

english.news.cn/20231027/fbab3…
chinatoday.com.cn/ctenglish/2018…
news.cgtn.com/news/2023-10-3…
news.cgtn.com/news/2023-10-2…

nbcnews.com/politics/supre…
propublica.org/article/how-de…
wsj.com/articles/elon-…
thehill.com/regulation/cou…
balajis.com/p/only-newsom-…
ourchinastory.com/en/10775/Xi%20…

https://x.com/balajis/status/1724666626006815214