Nine things that have caught our attention this week.
- China's Beats the AI Bust Rush
- Productivity for Some
- Attack vs. Defence
- Who Are You, Anyway?
- The AI Circularity Problem
- Where is the Anthropic IPO Love?
- Oracle's $220 Billion Invisibility Cloak
- Permanently Higher Plateau, 2.0
- Welcome to the Largest Debt Issuance Wave in History
1. China's Beats the AI Bust Rush
China's AI-heavy STAR 50 index rose 64% through June, then fell 40% by late October. Individual AI names have been hit even harder, like recent humanoid robot IPO, Unitree, off by half.
2. Productivity for Some
Revenue per employee at the largest tech companies is climbing—from a combination of layoffs and AI use—while the remaining S&P 493 are essentially flat in real terms since 2019. The AI productivity boom remains concentrated in the companies selling the technology, with little evidence so far of comparable gains among everyone else.
3. Attack vs. Defence
Cybersecurity stocks are up 61% this year, versus 8% for the Magnificent Seven. AI is making attacks cheaper and easier to scale, creating a lucrative arms race for cybersecurity companies (and insurance companies, which is a story for another day). Defending against AI-enabled attacks remains more rewarding for investors than much of the AI boom itself.
4. Who Are You, Anyway?
Researchers manipulated individual neurons in AI model Qwen3-8B, then asked who it was. In 34,220 cases, it regularly claimed to be something other than an AI, including the Great Wall of China, a thousand-year-old ghost, etc. We have grown (not engineered) models capable of remarkable feats of reasoning, while still understanding dangerously little about how their internal representations work.
5. The AI Circularity Problem
80% of the largest AI spenders are venture-backed, compared with 13% of median spenders. Venture capital is financing the companies buying AI services, while it and private credit finance the companies supplying them. A large fraction of the AI economy is investors financing other investors' customers.
6. Where is the Anthropic IPO love
Search interest in a SpaceX IPO exploded in June, before collapsing. Despite Anthropic's extraordinary growth and looming IPO, SpaceX was a far bigger speculative obsession. The difference in public attention is almost comical. Where is the love? What's wrong with the world?