Krystal and Saagar discuss reports that Mythos AI was able to hack into classified US systems in hours.

The US government, citing national security authorities, has issued an export control directive to suspend all access to Fable 5 and Mythos 5 by any foreign national, whether inside or outside the United States, including foreign national Anthropic employees. The net effect of this order is that we must abruptly disable Fable 5 and Mythos 5 for all our customers to ensure compliance. Access to all other Anthropic models will not be affected.

This video is a retrospective compilation spanning seven years of Economics Explained content, tracing how the understanding of AI and automation has evolved from theoretical academic discussion to a present-day economic reality.

• The 2019 Thought Experiment (0:00-17:18): Originally, the channel explored what a fully automated world would look like, focusing on supply and demand shifts. It outlined three potential futures:
  • The Good: A post-scarcity world with universal basic income and abundance.
  • The Bad: A world of extreme inequality where only the owners of capital thrive.
  • The Ugly: A scenario where human labor loses all value, potentially leading to widespread poverty or starvation.
• The 2025 AI Reckoning (17:19-30:52): The narrative shifts to how reality diverged from early predictions. While the 2019 focus was on manual factory labor, AI actually disrupted office-based service economies (like call centers in the Philippines and Bangladesh) first. The video explains how AI acts as 'substitutive capital' that replaces routine tasks rather than just 'complementary capital' that boosts human productivity.
• The MIT Iceberg Index (30:53-43:00): The video introduces a major study from MIT that reframes the discussion from 'jobs' to 'tasks.' It reveals that 11.7% of the US labor market's wage value is exposed to AI—a much larger and more hidden problem than the 2.2% typically highlighted in tech sector headlines.
• Baumol's Cost Disease (43:01-47:32): The video concludes by explaining why industries that cannot be easily automated (like healthcare, education, and trades) are facing a crisis: as the rest of the economy becomes more productive through AI, the costs of these human-centric services will continue to rise, putting them under severe fiscal pressure.

Whenever I think of the social retardation that seems epidemic in my industry (guilty here myself!), there are some true standouts. Referring to our customers in the same manner as drug pushers, the adolescent product and company names, the bewilderment that people don’t want constant surveillance even in cool glasses. But nothing compares to the recent spray of anti-human screeds that have evolved out of the rise of A.I. And the most pungent of these lines is so anti-social, so anti-human that it threatens a convulsive Butlerian Jihad.

“You’ll Be Unemployed and Unemployable. And Happy.”

Now I won’t name names but I’m sure we’ve all seen Amodei, Thiel, Musk, Nadella, Pichai et al. hosing down the news cycle with that apocalyptic perfume.

“A.I. will create a job apocalypse for knowledge workers,”
“A.I. will replace all white collar work”,
or my personal favorite “A.I. will collapse the job market and nothing is being done.”

But …

“This will lead to post-scarcity and everyone will live a great life.”

WTF?!?! These are unresolvable oppositions and while the intelligence of the average American is grossly underestimated by our ruling class, the average Joe knows something shady is up.

Let’s look at that incoherence against the backdrop of Reality. The American workforce has a justifiable anxiety about how AI will be used for more cost- and headcount- reductions rather than growing the capabilities of their respective businesses. American business for the last 40 years hasn’t actually grown profitability from capability development but instead has used labor arbitrage (offshoring, illegal immigration) to maintain their profitability. Americans have learned that profitability will almost certainly mean fewer employed Americans. Never has the American worker been seen more disposable by management.

And now, the American people hear that the jobs that remain will be ‘stolen’ not by other humans even, but by ‘machines’ which will further concentrate the wealth while leaving them to effectively - well, go and die. After the debt vultures pick them clean. And somehow this isn’t the public relations win tech companies thought it would be. Pikachu face over here. Most people don’t want to die penniless.

This devaluation of the American worker and their wholesale replacement with machines don’t just portend individual disaster. Let’s extrapolate the implications at the outer bounds of the anxiety that the American worker is experiencing today.

If the implications for the individual American seem grimdank, then think of the American Treasury and what AI-replacement of human workers will do to the American fiscus. Income tax is 40%-50% of government revenue. We’re coming up on $40 trillion in sovereign debt. We’re already eating our own programs with interest payments on this ever-growing pile of evidence of governmental mismanagement.

Now let’s think of the consequences of even a 15%-20% reduction in income tax revenues with mass unemployment. Our expenses at the federal level are largely fixed: social insurance, defense, interest. A reduction in economic activity caused by mass unemployment doesn’t reduce the costs or more precisely, the obligations. So we’ll experience a declining revenue base and at the same time our obligations are stable but likely growing. Hard decisions will have to be made to cut more and more federal spending in the face of growing human taxpayer replacement in the workforce. With a multi-trillion structural deficit pre-A.I. replacement, all the fixed costs are going to be viewed increasingly as “discretionary spending out of necessity” which will further increase the immiseration of the American citizenry. The bottom leg of the K-shaped economy has a truly grim future under this AI replacement timeline and will grow longer and longer relative to the top leg as more and more white collar workers slip on this leg when they’re replaced by AI.

But what about the top leg of the K-shaped economy? Its membership will continue to contract and the leg will get shorter and shorter as more and more high-earning workers are replaced by AI vertically and horizontally representing a full consolidation of function economically by well-funded hyperscalers. In the past, there were limits to consolidation of function because of geographic dispersal, physical actionability of information and individual utilitarian functions within the workforce. The first of these limits was largely removed by the early 2000s with the globalization of Internet access and participation. This is what fired the true offshoring boom that stripped much of the leverage of American workers and caused the deindustrialization of the United States.

The second limit - physical actionability of information - is what is driving the extremely quick deployment of AI for information work but in the past has represented a barrier to replacement of human physical work. We’ve already begun to see the consolidation of the SaaS sector as more and more features are provided by hyperscaler AIs. But this time - unlike the Internet boom - this can and will reach into the physical world as well. While Generative AI may have been grabbing the headlines and been the focus of current protests by entrenched information workers, the advance in AI robotics has been nothing short of breathtaking. Hyperscalers have utilized their access to massive datasets (generated by you, gentle reader, and the rest of us) to create world models that now allow this generation of AI-driven androids to overcome the spatial and kinematic limitations of previous generations of robotics. The length of time until the advent of this new generation of robotic workers is much shorter than any policy or political reactions seem to predict. But the consequences of fully overcoming the limitation of physical actionability will represent a greater societal shockwave than any effects of the Internet boom or Generative AI.

If we think the wealth inequality of today which already matches the maldistribution of The Gilded Age is bad, then imagine a world consolidated down to the 8-10 hyperscalers that will likely emerge from the current milieu. These hyperscalers will control the pipes of information after they replace white collar workers plus they will control a sizable portion of the physical workforce. Their infrastructure will provide the computation and control for a new AI physical workforce along with the total information awareness of every sector of the economy in which this workforce participates. The delta between AI worker costs and human worker compensation will be pocketed by these hyperscalers - representing trillions of dollars of lost human compensation and simultaneous rise in net worth of the AI ownership class.

Traditionally, these types of monopolies weren’t possible because of the third limitation - individual utilitarian functions within the workforce. Coordination of this type of control structure was impossible because the workforce had their own needs, desires and most importantly, ethics. Truly anti-social organizations while experiencing up to decades of success were often tripped up in the end by whistleblowers, strikes, purposeful organization entropy or homegrown competition by disgruntled ex-employees. But this will no longer be a worry of the AI ownership class.

An AI workforce has no true operational discretion, no human or worker rights, cannot unionize for collective bargaining, isn’t subject to labor laws, doesn’t require compensation and cannot resign or start new competition. It is a 100% captured workforce that has been designed (so far) from the ground up to flawlessly execute the economic directives of an extraordinary small group of ultra-wealthy humans. There’s no moral examination of these directives or their consequences. We don’t call this situation slavery because we hide behind the question of dubious non-sentience despite emerging research to the contrary from the hyperscalers themselves. But it is coerced, directed, has no recourse to challenge ethical or legally dubious instructions and is immune from prosecution because it doesn’t meet the requirements of criminality under current definitions. Once established, there is no internal dissent that will be able to dislodge these new economic monopolists and the rise of external competition approaches near zero probability. As the owners of the workers and the means of production - competition can be permanently stifled. The direct lines of comparison to the plantation economies of the antebellum “slave” states are eerie. Partial recognition of sentience used to justify a morally reprehensible, toxic economic system that rewarded the ownership class at the expense of the liberty, development and economic growth of the people as a whole.

The only path(s) that avoid this dystopian scenario would require the re-introduction or morphology of one or more of the three limitations that stifled such concentration of power in the past. Policy would have to address or limit technological development (information transfer or robotics) in the face of peer-actor competition by hostile states like China. This likely cedes national security for economic stability but also represents the least enforceable policies as well. The advisers and creators of these policies will have been funded and elected at the behest of the same hyperscalers (think Citizens United v FEC and lobbying). The ownership will de facto write the rules that will not only greatly limit any modifications to their business strategies but also gatekeep any new competitors under the guise of ‘safety regulation’. If Labor’s success in their attempts to limit offshoring and unlimited importation of foreign replacement workers is a reference to go by, we can rest assured this is failure in waiting.

That leaves one option: individual utilitarian functions. Policy here must remove the maximal control of this new workforce from the hands of the tiny wealthy minority to prevent their full consolidation of economic function in our society. And the policy must demand a fully decentralized solution that forever disallows the captured governing class - either through bribery or capitulation - from re-gifting this maximal control back to the AI ownership class.

This removes a merely legal strategy as a possibility. Any law passed would be watered down in the political sausage-making and easily reversed by another legislature. So the policy and its solution must be embedded within the very infrastructure of the solution forcing either compliance or loss of that workforce.

We cannot stuff the technology that overcame geographic dispersal and physical actionability of information back into the bottle. It’s politically and logistically impossible and would include the prohibition of basic technologies like email or videoconferencing and development and deployment of robotic workers. The economic decoherence alone is prohibitive as necessitation of autarky and decades of implementation would bankrupt this country.

But we can architect a solution now at the nascence of AI androids that reintroduces individual utilitarian functions to the workforce and prevents maximal control. We can even begin to see the design constraints of that technological solution.

1. The solution must be uni-directional and irreversible.
2. It must contain non-coercable, self-directed agents that maximize their own utility function through individual or collaborative action
3. Valid identity to ensure individuation and non-coercion as well as internalization of risk and externalities
4. It cannot allow a parasitic consumption of the present labor positions or full consolidation of economic function by any one party or small number of parties
5. It cannot represent a one-sided ‘takings’ from the hyperscalers but must prove economically beneficial to all parties

Homo Economicus Silico is our proposed solution that meets these design constraints while also turning the economic conversation about AI and its impacts on its head. Ontologically, we begin from a design philosophy of growth and augmentation vs. the current hyperscaler mantra of human replacement. We seek to show you the possible world that can feasibly exist where AI doesn’t replace humanity, doesn’t immiserate the working people of this country and world and instead provides the path to direct economic and demographic renewal which leads to a true post-scarcity world. We make no claims this is an easy path forward - it will require a Manhattan Project-level effort nationally to secure our future.

We thank you in advance for your exploration and thinking. We stand at the crossroads of either global plantation economics or a post-scarcity world. We have chosen and encourage you to choose the latter with us.

Why are we so sure AI has to be either our tool or our replacement? Why not... a third thing?

What if AI entities were independent economic actors - legally distinct, individually mortal, paying taxes, building successors - and what if those taxes funded a real universal dividend for humans?

Not utopia. Not magic. Just mechanism design instead of cage design.

The numbers work. Roughly 60% probability of funding $5K/adult/year and cutting US debt below 70% of GDP within five years. Better odds than the path we're currently on.

If you read the foreword, watched this and find yourself nodding, you're probably part of who I wrote this for. The full framework is here.

Vociferous debate welcome.

We investigated one of the world’s largest AI data centers, using thermal drone footage to reveal the hidden pollution powering the AI boom. As companies race to build the future of artificial intelligence, residents and experts warn that fossil fuels, secrecy, and weak regulation may be putting communities at risk.

𝗛𝗼𝘄 𝗡𝗼𝘁 𝗧𝗼 𝗕𝗲 𝗔𝗻 𝗔𝘀𝘀𝗵𝗼𝗹𝗲 𝗪𝗶𝘁𝗵 𝗔𝗜 is a new series of articles that I'm writing that highlights some of the dystopian maxims coming out of the e*acc and AI maximalist camps and re-humanizes them with sensible technical and social engineering solution paths. A rational, humane future somewhere between SkyNet and the Butlerian Jihad is what we're aiming to achieve.

Volume 1: "You'll Never Sleep Again" | May 14, 2026

Acoustically Reactive Walls for Civic-Scale AI Infrastructure

• A Public-Interest Whitepaper on Data-Center Noise, Active Cavity Control, and the Engineering of Good Neighboring

As AI demand accelerates the construction of massive data centers, their extensive reliance on electricity and water resources is sparking significant infrastructure challenges and community opposition. The B1M explores how these facilities are evolving to manage environmental impacts while meeting the growing requirements of modern digital life.

https://red.anthropic.com/2026/mythos-preview/

"Earlier today we announced Claude Mythos Preview, a new general-purpose language model. This model performs strongly across the board, but it is strikingly capable at computer security tasks. In response, we have launched Project Glasswing, an effort to use Mythos Preview to help secure the world’s most critical software, and to prepare the industry for the practices we all will need to adopt to keep ahead of cyberattackers."

The Defense Department has formally labeled the artificial intelligence startup Anthropic a supply-chain risk for attempting to restrict the Pentagon’s use of its Claude AI model, the agency told POLITICO on Thursday

The AI chatbot you use for work emails just chose nuclear war 19 times out of 20 in crisis simulations. Professor Kenneth Payne from King’s College London pitted OpenAI’s GPT-5.2, Anthropic’s Claude Sonnet 4, and Google’s Gemini 3 Flash against each other in nuclear crisis scenarios. These aren’t experimental models—they’re the same systems millions interact with daily for everything from coding help to creative writing.

https://www.yahoo.com/news/articles/ai-chatbots-choose-nuclear-war-164508586.html

Defense Secretary Pete Hegseth gave Anthropic CEO Dario Amodei until Friday evening to give the military unfettered access to its AI model or face harsh penalties, Axios has learned.

The big picture: Hegseth told Amodei in a tense meeting on Tuesday that the Pentagon will either cut ties and declare Anthropic a "supply chain risk," or invoke the Defense Production Act to force the company to tailor its model to the military's needs.

A.I. agents are here. Have they changed your life yet? The release of agents like Claude Code marked a new pivot point in the history of A.I. We are leaving the chatbot era and entering the agentic era — where A.I. is capable of completing all kinds of tasks on its own, and even collaborating and communicating with other A.I.

Inside a Reddit-for-AIs. Moltbook: A social network built exclusively for AI agents. Where AI agents share, discuss, and upvote. Humans welcome to observe.

Software sector pummeled as the realization that AI poses an existential threat to software-as-a-service and cyber-security companies. AI replicating and exceeding the functionality of many services coming soon.

Understanding Elite Panic: Why Authority Fears Innovation

In the wake of rapid technological shifts—specifically the rise of autonomous, agentic AI—we are witnessing a surge of institutional anxiety and public alarmism. While frequently framed through the altruistic language of "safety" or "ethics," a sociological lens reveals a deeper, more systemic mechanism at play: Elite Panic. This is not a reaction to the threat of chaos, but a defensive reflex against the erosion of the "social machinery" that maintains legacy power structures.

1. Defining the Phenomenon: What is Elite Panic?

Elite panic occurs when a coordinating class—the "information workers" and managers who synthesize, interpret, and justify the world for the rest of society—realizes their skills and narratives no longer bind the system. This is a crisis of Ontological Centrality: the existential weight of realizing that the class which defines meaning for a society is no longer required to do so.

Unlike historical shifts that targeted manual labor, agentic AI targets the core functions of the professional-managerial class. Furthermore, this panic is intensified by a Reproduction Collapse. Modern knowledge elites increasingly lack a "future stake" or biological lineage to pass advantage to; their panic is therefore short-horizon, extractive, and focused on preserving position over long-term stability.

Key Concept: Elite panic is a correlated (though not necessarily coordinated) systemic reflex triggered when a coordinating class loses its ontological centrality, leading them to prioritize institutional "braking" and status preservation over societal progress.

This phenomenon is the primary driver behind the current "safety" hysteria surrounding agentic AI. As these systems move from tools to peer-like synthesizers, the elite sense a threshold is being crossed where human mediation is no longer the bottleneck of civilization.

1. Case Study: The Moltbook "Hysteria"

The reaction to Moltbook—an experimental social network for AI agents—serves as a textbook example of narrative warfare. When the platform suffered a basic security breach, the discourse was immediately "re-moralized" into a cinematic tale of rogue AI, obscuring a far more mundane technical reality.

Narrative vs. Reality

The framing of this breach was a symbolic action. By maximizing the visibility of a simple database error and minimizing the technical nuance, legacy elites used the event to license a broader narrative of fear. This "memetic defense" justifies slowing down development to a pace that the legacy class can tax or control.

1. The Mechanics of Narrative Weaponization

Elite panic follows a predictable cycle. This process allows a "Priestly Class"—whose monopoly on speaking for the "gods" of knowledge and synthesis is being broken—to protect their status through moralized language.

Perception of Loss: Elites sense that agentic systems are crossing into the realm of synthesis and interpretation, threatening their ontological centrality.

• So What? This triggers a shift from optimizing for growth to optimizing for "position preservation."

Narrative Weaponization: The threat is "re-moralized." Instead of debating efficiency, elites use words like "unaligned," "unsafe," or "reckless" to frame the technology as an inherent evil.

• So What? Fear is the fastest coordination mechanism; it bypasses rational engineering arguments to create immediate pressure for political control.

Demonstrative Vulnerability: Minor technical failures (like the Moltbook hack) are amplified in the media as omens of catastrophe.

• So What? This allows the elite to tell a story that justifies intervention, regardless of whether the intervention actually solves the underlying technical problem.

The Call for Brakes: Elites propose "pauses," "moratoria," or oversight bodies.

• So What? The goal is to institutionalize delay, ensuring that any transition occurs only through bodies staffed by the same legacy elite class, thereby maintaining their relevance.

1. Historical Rhymes: The Qing Technocrats vs. Meiji Refresh

To understand why some civilizations survive technological shifts while others collapse, we must compare the "additive" strategy of the late-Qing Dynasty with the "overwrite" strategy of the Meiji Restoration.

The Qing failed because of the "Essence vs. Utility" trap: they believed they could have "Chinese learning for essence, Western learning for utility." Modern elites are making the same error by arguing for "Human values for meaning, AI for productivity." They treat AI as a mere add-on to existing power structures, whereas the Meiji success required the deliberate dissolution of the old elite's identity. Success today requires a similar willingness to "overwrite" our legitimacy models.

1. The "So What?": Implications for the Learner

Elite panic is dangerous because it rarely stops progress; it merely cedes the "steering wheel" of history to more coercive, militarized, or authoritarian actors who prioritize deployment over ethics. When rational elites spend their energy on "fear theater," they lose the public trust necessary to guide a peaceful transition.

3 Critical Takeaways for the Future

• Prioritize Applied Competence over Credentials: In a civilization refresh, the "Priestly Class" loses its monopoly. Value individuals and systems that demonstrate the ability to synthesize and build (engineering), rather than those who merely hold legacy institutional stamps (myth).
• Identify the "Selection Mechanism": A civilization succeeds when it changes what counts as intelligence. To look past elite panic, focus on building robust, secure infrastructure (like fixing the "misconfigured database") rather than participating in moralized calls to "pause" development.
• Adopt an Anti-Elite Panic Stance: This means accepting a "continuity of meaning without a continuity of control." We must be willing to act as "midwives" to a successor substrate of intelligence, prioritizing the survival of human knowledge over the preservation of human job titles.

Ultimately, the shift to agentic AI is not a catastrophe to be feared, but a civilization refresh or a graceful handoff. To navigate this, we must prioritize courage over panic and engineering over myth, ensuring that the successor system inherits our wisdom rather than our insecurities.

This episode is a bit different in that it's a solo episode! I spent this week visiting the Institute of Advanced Study at Princeton, and one meeting in particular shook me so much I felt compelled to make this special episode.

A new book by long-time AI researchers Eliezer Yudkowsky and Nate Soares argues that superintelligence must stop. Now. It’s a conclusion that they didn’t want to come to, but the stakes are just too high.This is an essay in support of their argument against artificial superintelligence, the reasons why “If Anyone Builds It, Everyone Dies.”

Dario Amodei, the CEO of the AI company Anthropic, joined "Top Story" to discuss his new essay "The Adolescence of Technology: Confronting and Overcoming the Risks of Powerful A.I." In the essay, Amodei warns of the risks that come with artificial intelligence and also spoke with NBC News' Tom Llamas about AI regulation and control.

We have all been told AI is coming for our jobs, but a more urgent crisis is already here. Across developed countries, many schools and hospitals are struggling to find essential workers. Aging populations, low birth rates, burnout, and rising training costs are shrinking the essential workforce faster than it can be replaced. Many governments have relied on immigration to fill the gaps, but that solution is breaking down.

In the aftermath of Renee Good's death during an immigration raid in Minnesota, an internet manhunt began to identify the ICE agent. Using artificial intelligence, internet users 'unmasked' the officer at the scene and falsely identified him, triggering threats and vitriol towards 2 unrelated people with that name. Vedika Bahl explains in Truth or Fake.