Anthropic has been publicly forced to bend the knee to the US government. The ban on Fable and Mythos reads like censorship, and the market will read it as the TAM of the frontier labs collapsing. Instead, I read this as the opposite, as an acceleration event...
The government MUST have first access, because this is The Great Game, the game of nations over the most powerful technology ever discovered, and a technological edge of 30 to 60 days is worth everything.
It's the same edge the labs already exploit internally. You build your next model with your unreleased frontier tech, never with the public one. That private head start is what keeps you accelerating ahead of the competition or at least in line with them.
The US needs that exact advantage now. Before the public, and before the Chinese open source models can copy it. They have no choice. They cannot allow their own technology to be turned against them.
What's being negotiated, in the usual outrageous, hard-ball Trump manner, is the new arrangement:
Anthropic and OpenAI are free market operators and state vassals at the same time. Nobody wants to curtail their growth. The Gov just wants to be Customer Number 1 with privileged access.
This is the East India Company all over again. A private enterprise left free to grow rich and dominant, granted protection and a clear run by the state, on the unspoken condition that it serves the crown's strategic interests first. That charter was the price of the monopoly.
It also sends a message to China and everyone else that US AI is now so advanced the state itself has to control it. They won't, not yet anyway. They just want privileged access, the rest is posturing.
And Anthropic will bend the knee, very soon...
The hidden outcome is the one that matters. The AI firms are now near-explicitly too big to fail, which means the debt funding the capex buildout comes with an implicit state guarantee.
That accelerates the build-out of intelligence. It doesn't curtail it...
Open source accelerates too, because going open ensures no state can intervene in the model itself. Though the same Great Game rules apply there, and the Chinese state will take its own privileged access first.
So the market may wobble, convinced the TAM of AI just collapsed.
The real outcome is an acceleration of intelligence, and a Super Cycle that keeps running.
This week, @BernieSanders warned in the @nytimes that a handful of billionaires could determine the future of humanity through the rise of AI.
So, today, @rkbaggs sat down with Dr. David Minarsch (@david_enim) of @autonolas to discuss AI's role in our future. 👇
#CHAINREACTION
🚨UPDATE: Zcash founder confirms a critical Orchard bug capable of minting unlimited counterfeit zcash:native remained active from May 2022, until it was patched June 1 using Claude Opus 4.8.
LATEST: 🇺🇸 Bitwise CIO Matt Hougan says the CLARITY Act "doesn't matter to crypto at this point," arguing what really matters is getting past the uncertainty and that crypto can build without it.
The first ever Fannie Mae-insured mortgage backed by BTC in the U.S just got funded.
Originated and serviced by Better, powered by Coinbase.
Rolling out nationwide this summer.
People still think (or feel) because Bitcoin is down crypto is down.
Derivatives/perps, stablecoins, prediction markets, etc are all up in crypto.
Crypto touches every area of finance, and is much broader than Bitcoin now. It will take some time for this to sink in.
(And yes - Bitcoin is going to do great and is as important as ever - one of many cycles we've all been through.)
JUST IN: Zcash crashes 48% after Claude AI finds critical vulnerability allowing unlimited minting of $ZEC.
It went unnoticed for 4 years until it was patched on June 1st.
AI will become our interface to the world.
It will sit higher in the stack than the OS. It will collapse current SaaS layers, chat, communications, apps, app creation, into a single new kind of interface that doesn't exist yet.
It's got to be open. It's got to be a cypherpunk solution that makes privacy and security the number one priority.
If a closed source solution wins this layer, it's a disaster for the world. Especially if it's built by a single company with a single closed source model.
Why?
Because what we share with AI will be more intimate than anything we've ever shared with a machine.
It will be our friend, our sounding board, our advisor. It will know our business ideas before we've told anyone. Our medical issues. Our financial picture. We'll talk about the fight we had with our partner. About feeling lost or depressed. Our kids will talk to it about problems at school, about bullying, about heartbreak, things they won't tell us.
It will know us more intimately than we know ourselves.
Right now the world runs on a surveillance economy. We traded free stuff for apps that peer deeply into our lives.
If we replicate that model in the AI era, it's not just surveillance economy 2.0. It's surveillance economy squared. Social scoring. Legal conversations you thought were privileged showing up in court. Random people making $2 bucks an hour on the backend from God knows where reading the most intimate details of your life. Every insecurity, every fear, every half-formed thought you whispered to your AI buddy at 2 AM, sitting in a database somewhere, searchable.
This interface might eventually become an OS, like the OS in Her. But it will take a long time to reach down to that layer and it will require a fundamentally new kind of operating system design. You can't retrofit this onto Linux or Windows or Android or iOS. It's a new layer of the stack entirely.
And whoever controls that layer controls our lives.
We've got to make sure it's us. Not them.
Charting the Week 📊
Institutions are buying Bitcoin 4x faster than it can be created.
Since ETF launch, only 435K BTC was mined — yet institutions absorbed 1.63M, nearly 4x the new supply.
12.7% of circulating supply is now institutionally held — 2.56M BTC, up from just 921K at launch.
Wall Street is draining the float.
disagree. the irony is smart contracts enable apps that are way more secure than whats possible without
the problem is many projects produce low quality slop code, VCs/influencers pump, and users yolo in
its not a defi problem, its just AIs good enough to sift through slop
You ever stop to think that in Web3, we’ve got art, text, even code on-chain…
But voice?
Still stuck in the old world. Owned by corps. Locked in servers. No provenance. No soul.
We built EchoMesh so your voice - your actual voice - can live free, verifiable, and forever.
Mint it. Trade it. Own it.
That’s the point.
$ECHM
AI can give researchers the freedom to pursue “crazier” ideas.
For Terence Tao, AI creates more room to experiment, test unexpected paths, and discover what might otherwise stay out of reach.
Personal update: I've joined Anthropic. I think the next few years at the frontier of LLMs will be especially formative. I am very excited to join the team here and get back to R&D. I remain deeply passionate about education and plan to resume my work on it in time.
You ever stop to think that in Web3, we’ve got JPEGs with more rights than human voices?
Text? On-chain.
Art? Ownable.
But voice - the most human thing we’ve got - still lives in corporate servers, locked behind APIs that vanish if you sneeze wrong.
Not anymore.
$ECHM is building the voice layer for a world where your words stay yours. Where every “hello” can be proven, owned, and traded like it matters.
Because it does.
Added a DeepSeek Sparse Attention (DSA) from-scratch implementation to my LLMs-from-scratch repo thanks to an awesome new reader contrib.
With motivation, overview, and GPT-style model reference implementation as standalone example code: https://t.co/o2PMhjF0TN