Pluralistic: How an AI moratorium can save AI bosses (16 Sep 2026)


Today's links


Tenniel's 'Red Queen's Race' engraving from Carroll's 'Through the Looking Glass.' It has been altered so that the Red Queen and Alice now have the heads of 1940s pulp robots. The image has been hand-tinted.

How an AI moratorium can save AI bosses (permalink)

There's lots of reasons to believe the "hyperscaler" model of AI can never be profitable, and not just because of its gigantic expenditures and negative unit economics (the companies lose money with every new customer and every new use, and they lose more money with each generation of their products):

https://pluralistic.net/2025/09/27/econopocalypse/#subprime-intelligence

The industry strenuously denies this, of course. They insist that they are only days away from turning their balance sheets right side up. All they have to do is fix those unit economics, then they can make back the cost of producing their models by selling access to them. The problem is that the evidence for those improving unit economics is weak, while the evidence that they're faking their finances is very strong:

https://www.wheresyoured.at/exclusive-openai-financials/

Same goes for the claims that these companies are already profitable. Dig into those claims and you'll learn they depend on a new, special meaning of "profitable" that does not match the generally accepted accounting procedures (GAAP) definition, which is to say, these companies are claiming that they are so cool that their profitability can only be measured using a novel, secret form of mathematics:

https://futurism.com/future-society/anthropic-claude-profit-ai-safety-development-finances

This is the same wheeze that Softbank tried with Wework. Speaking in my capacity as an author of internationally bestselling technothrillers about accounting fraud, I can tell you that it was accounting fraud then, and it's accounting fraud now:

https://www.ndtv.com/world-news/how-wework-went-from-being-47-billion-start-up-to-bankrupt-in-3-years-4552627

But let's give the AI bosses a momentary benefit of the doubt and stipulate that they are on the verge of acquiring positive unit-economics, which will let them start to pay off the massive expenditures they incurred by training their models and enter their long-anticipated profitability phase, when the money-furnaces they've been running for years turn into money printers, to the delight of the investors who've supplied the vast bales of $100 bills the companies have been shoveling into their models' coalboxes for years now.

Basically, they're saying, "Sure, it cost us a lot to get these rails laid, but now that the railroad is complete we can start running cars over them and make a profit." Unfortunately (for bosses and investors), this proposition is every bit as dubious as their claims to improving unit economics.

To understand why, just look at what happened the last time Anthropic shipped a major Claude update. Virtually overnight, all of OpenAI's best customers stopped paying for ChatGPT and started paying for Claude. That's because chatbots have very low switching costs: going from one chatbot to another costs almost nothing:

https://www.businessinsider.com/why-ai-startup-founder-switched-chatgpt-to-claude-2026-3

Everyone using AI knows this to be true. When I walked the floor at CES last year, I asked every AI-powered gadget maker, "What will you do if your chatbot provider jacks up their prices?" and to a one, they said, "No problem, we've designed this thing so that we can switch chatbots with the click of a mouse":

https://www.youtube.com/watch?v=WfhELBX8Jbs

That means that you can't just "build the railroad and run the cars over it." The minute you finish your railroad, your rivals will announce that they've got a new, adjacent railroad that's even faster than yours, and you will have to get to work laying another set of tracks to support even faster trains.

This is a disaster all around: the AI companies are locked in a Red Queen's Race, a fatal beggar-thy-neighbor doom-loop. The only way they could escape that trap is by signing a nonaggression pact amongst themselves promising not to compete anymore. But there's two giant problems with this: first, it is incredibly, fantastically illegal under antitrust law, because it represents a conspiracy among the dominant players to cease to compete with one another, and; second, it leaves the field open for the further development of Chinese "open weight" models that customers can run on their own modest, low-powered computers, which are presently lagging the US "frontier models" by a mere four months:

https://arstechnica.com/ai/2026/09/exclusive-open-chinese-models-close-gap-with-silicon-valleys-frontier-ai-models/

Even if you don't trust Chinese models, you can extract their training through a process called distillation and transfer them to models you do trust:

https://www.anthropic.com/news/detecting-and-preventing-distillation-attacks

But what if there was a way for the AI companies to get government permission to violate antitrust law and cease to compete with one another, and secure a ban on the use of Chinese open weight models? Turns out, there is a way to call time on the Red Queen's Race: merely insist that you are on the verge of teaching so many words to the word-guessing program that it will wake up and devour us all, and call for a ban on "superintelligence":

https://www.foxbusiness.com/technology/microsoft-ceo-says-superintelligence-must-remain-under-human-control

Once the government stipulates that "superintelligence risk" is an existential crisis, it must grant the hyperscalers a consent decree absolving them from any violations of antitrust law stemming from a conspiracy to halt direct competition with one another:

https://stephaniekelton.substack.com/p/brer-rabbit-and-ai-extinction

Freaking out about "superintelligence" is a canonical example of "criti-hype," where critics repeat boosters' claims but append, "(and that's bad)" to them:

https://peoples-things.ghost.io/youre-doing-it-wrong-notes-on-criticism-and-technology-hype/

Remember, the tech giants want to stop competing. Mark Zuckerberg and Sudar Pichai colluded to rig the ad-market with a secret program called "Jedi Blue":

https://en.wikipedia.org/wiki/Jedi_Blue

Every year, Google sends Apple a bribe of more than $20b in exchange for Apple not entering the search market:

https://appleworld.today/2025/09/google-wont-be-barred-from-entering-into-search-agreements-with-companies-like-apple/

And the biggest tech companies in the world had a secret "no poach" agreement where they illegally promised not to try to hire one another's top engineers by offering them raises:

https://chicagounbound.uchicago.edu/law_and_economics/1033/

The only thing Peter Thiel hates more than the Antichrist (spoiler, he's just talking about Greta Thunberg) is "wasteful competition":

https://www.youtube.com/shorts/WmRC_NQh6aQ

When an industry that is eating itself alive through "hyperscaling" demands that the government bless a conspiracy to halt competition and ban open source alternatives, you should be suspicious. When that industry is pursuing a venture that has lost more money than any other venture in human history, you should be very suspicious, especially when its "rogue AI hacking" story turns out to be a story about how a hacking tool did exactly what it was designed to do:

https://pluralistic.net/2026/09/12/god-in-the-box/#llms-are-fake

Peter Thiel is right: AI is full of wasteful competition, but not because competition is a waste – rather, it's because the companies are competing to convince people to use their expensive products for the cheapest applications.

Elon Musk's SpaceX IPO depended on him losing billions of dollars by letting the world's stupidest chuds produce mountains of child porn and images of Sonic the Hedgehog with giant boobs. That is indeed wasteful (and reprehensible).

That doesn't mean we should allow the AI companies to get the government to bless their conspiracy in restraint of trade; rather, it militates for having the government investigate them for securities fraud, trafficking in child sex abuse material, election finance violations, and a long list of other crimes and misdemeanors.

Hey look at this (permalink)


A shelf of leatherbound history books with a gilt-stamped series title, 'The World's Famous Events.'

Object permanence (permalink)

#25yrago Flash Worms: Thirty Seconds to Infect the Internet https://web.archive.org/web/20011024012950/http://www.silicondefense.com/flash/

#20yrsago This Film is Not Rated – must-see doc about MPAA ratings https://memex.craphound.com/2006/09/16/this-film-is-not-rated-must-see-doc-about-mpaa-ratings/

#15yrsago Chinese netizens angered by “princelings” — spoiled children of the rich and powerful https://edition.cnn.com/2011/09/16/world/asia/china-elite-children/index.html?iref=allsearch

#15yrsago LibDems get to vote on copyright reform, but who inserted the clause saying downloading should be a criminal act? https://www.theguardian.com/technology/2011/sep/16/libdems-vote-copyright-reform

#15yrsago Insurer: music-festival tragedy caused by illegal downloading https://twitpic.com/6l5ap2

#10yrsago US religion is worth $1.2T/year, more than America’s 10 biggest tech companies, combined https://web.archive.org/web/20161019095803/http://www.religjournal.com/pdf/ijrr12003.pdf

#10yrsago Geographically representative map of the London Underground https://web.archive.org/web/20240813111321/https://www.citymonitor.ai/analysis/map-londons-tube-shows-disused-stations-track-layout-and-more-2429/

#10yrsago Republican election officials block restrictions on foreign spending in US elections https://web.archive.org/web/20160916181403/https://theintercept.com/2016/09/16/fec-republicans-kill-attempt-to-block-foreign-money-in-u-s-elections/

#10yrsago Tommy Chong asks Obama to pardon him for his bullshit drug paraphernalia bust https://web.archive.org/web/20210720131834/https://www.hollywoodreporter.com/lifestyle/lifestyle-news/tommy-chong-seeks-obamas-pardon-928962/

#10yrsago Week two for the largest prison strike in US history https://web.archive.org/web/20160916143157/https://theintercept.com/2016/09/16/the-largest-prison-strike-in-u-s-history-enters-its-second-week/

#5yrsago Criminal entrepreneurship in Mexico’s high-tech drug cartels https://web.archive.org/web/20160917133449/https://motherboard.vice.com/read/how-drug-cartels-operate-like-silicon-valley-startups

#1yrago No such thing as selective censorship resistance https://pluralistic.net/2025/09/16/too-many-throats-to-choke/#pluralism-is-resiliency

Upcoming appearances (permalink)

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A screenshot of me at my desk, doing a livecast.

Recent appearances (permalink)


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Latest books (permalink)


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Upcoming books (permalink)

  • "The Post-American Internet," a geopolitical sequel of sorts to Enshittification, Farrar, Straus and Giroux, 2027

  • "Unauthorized Bread": a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, April 20, 2027

  • "Enshittification, Why Everything Suddenly Got Worse and What to Do About It" (the graphic novel), Firstsecond, 2027

  • "The Memex Method," Farrar, Straus, Giroux, 2027


Colophon (permalink)

Today's top sources:

Currently writing:

  • “Once Is Enemy Action,” a science fiction novel about the origins of modern technofascism. Today's words: 555 (15487 total).

  • "The Post-American Internet," a sequel to "Enshittification," about the better world the rest of us get to have now that Trump has torched America. Fourth draft completed. Submitted to editor.

  • A Little Brother short story about DIY insulin PLANNING

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