Pushing electrons thru silicon at scale doesn't scale ... efficiently

 Angular Momentum

How to gin up the IPO. You got to fund us to protect you from US. The Twilight Zone applies.

The Securities and Exchange Commission‘s publication on Monday of Anthropic’s S-1 form—ahead of a heavily anticipated initial public offering—has led to plenty of discussion of whether the company’s quickly ballooning revenues will be able to overcome its even higher costs. But amid the numbers and forward-looking optimism about AI “rapidly transform[ing] every sector of the global economy in ways greater than the impact of industrialization, electricity, semiconductors, and the internet,” Anthropic also spends an inordinate amount of time in its S-1 laying out the myriad risk factors that could bring the company down.

Across 93 pages and over 70,000 words, Anthropic’s S-1 “Risk Factors” section discusses literally hundreds of potential problems that could negatively impact its business in the coming years. Many of these potential risks are the kind of standard worries about competition, costs, customer acquisition, and potential regulation that almost any business must worry about. But some risks highlight interesting potential points of failure for Anthropic specifically and the hype-filled AI bubble more generally.

The smell of desperation applies when you factor in an 80 billion loss against 16 billion in profits Think 64 billion as net loss, and combine this with a possible 750 billion needed to keep the system running does not portend a happy ending because the bond guys are starting to get twitchy and for good reason. 

It's the ultimate Silicon Valley protection racket, and it is Dr. Strangelove writ large. Anthropic's built a computational Doomsday Machine, and now are holding a multi-billion-dollar funding round to figure out how to build the off switch but they don't have one. Rod Serling couldn’t have scripted a better episode.

But if we cut through the IPO hype and look at this through a purely architectural lens,
this 93-page apocalyptic disclaimer is actually a confession.

Why are the creators of this technology terrified of it? Because they have absolutely no structural control over it. Anthropic, much like DeepMind and OpenAI, has bet the house on probabilistic brute force. Their models are statistical guessing engines, floating in a digital void with no physical constraints, no geometric boundaries, and no anchoring in physical reality. When you build a system that relies entirely on hallucinating the right answer, of course you lose sleep worrying about what it might hallucinate next.

The emperor has no clothes. The problem is the fact uninformed investors don't know this but they will. Physics doesn't care. Pushing electrons through silicon at scale doesn't scale ... efficiently.

As proof ...

A Google data center in Nevada.
Credit...Bizuayehu Tesfaye/Las Vegas Review-Journal/Tribune News Service, via Getty Images

Tech companies are struggling to find enough electricity for all the new data centers they need for artificial intelligence, and lately they’ve explored ideas such as restarting old nuclear plants and stringing together off-grid gas engines.

Now Google is trying a different approach: paying, at least indirectly, for homes and businesses to use less electricity at times to help free up power for data centers.

On Thursday, Google announced a deal with a company called Voltus to set up what’s known as a “virtual power plant” in the large Mid-Atlantic grid known as PJM. Voltus will provide Google with up to 1,070 megawatts of electric capacity when needed — roughly as much as the output from a large nuclear reactor.

That electricity won’t come from new power plants. Instead, Voltus will sign up homes and businesses and give them financial incentives to curb their usage when local power demand is high or the grid is strained. Many of these reductions could occur automatically, such as through smart thermostats that dial back air-conditioning during peak summer hours or batteries that can provide temporary on-site power.

Again, pushing electrons through silicon at scale doesn't scale ... efficiently. 

The Spider's Web

Leon Neal//Getty Images

Popular Mechanics nailed it in terms of powerful cheap tech and what it can do to legacy systems.
In reading the PM post, the connect to The Center of Gravity/Rev II rings true
if the US stupidly attacks Iran yet again. 

To wit

The Bones could have been caught in the Spider’s Web.

That might read like a sentence from a Stephen King novel on the surface,
but if you parse through the military parlance, what it says is far more haunting.

The “Bones” in question are the U.S. Air Force’s Rockwell B-1 Lancers, a supersonic bomber that airmen affectionately call a “Bone” (as in “B One”). In early October, the USAF had to quickly evacuate a contingent of 12 B-1s from an English airbase when the Pentagon suspected they were vulnerable to an attack modeled on Ukraine’s Operation Spider’s Web.

The Air Force moved so fast that there wasn’t even time to pull together a refueling plan, according to a Carnegie Endowment for International Peace commentary by Steven Feldstein. The aircraft represent “one-quarter of Washington's B-1 arsenal”— an estimated $3.8 billion in hardware. The concern was that these supersonic bombers were acutely vulnerable to a threat parked just outside the fence: unmarked vans.

 A 28th Bomb Wing B-1B on the ramp in the early morning at Ellsworth Air Force Base, South Dakota

But it wasn't.

But the strategy behind the attack wasn’t the IRGC’s. In fact, similar strikes have been successfully carried out by a number of U.S. allies in their own ongoing conflicts, a reminder both that war always evolves, and that the weapons wielded by your friend will inevitably find their way into the hands of your enemies too.

In June 2025, Ukraine launched Operation Spider’s Web, a drone attack the New York Times described as
“a signature event on par with sinking the Russian flagship Moskva early in the war.” Instead of vans, Ukraine used “custom-made wooden modular cabins,” per a West Point report, concealing 150 drones and 300 explosive payloads in their roofs.

A Rockwell B-1A in 1984

Serious airplane, serious vulnerability.

The fate of the world ...

In final polls published Friday, Netanyahu’s coalition is expected to be neck and neck with – or trail slightly behind – the opposition bloc led by former Israeli military chief of staff Gadi Eisenkot.

According to Israeli news outlet Haaretz, which has collated polls from Israeli news channels, as of Friday, an average of Channels 11, 12 and 13 predicts Netanyahu’s bloc will win 50 seats while Eisenkot’s opposition bloc will take 54 seats. The Israeli parliament, known as the Knesset, has 120 seats in all, so 61 is the mark that a grouping needs to reach a majority.

The process ...

Now that we know how Israel's political system works, will Israel vote out Bibi
as the fate of the world depends on it. The system is valid, the person running it is not.

To be continued. 

The Center of Gravity/rev II

Portrait by Wilhelm Wach, c. 1830

‘War is nothing but a duel on a larger scale’ – a physical contest between people,
each using force ‘to compel our enemy to do our will’. [75]

& this

The center of gravity ... 
the "hub of all power and movement, the point against which all energies should be directed"

Clausewitz stressed the multiple interactions of diverse factors in war, noting how unexpected developments unfolding under the "fog of war" (i.e., in the face of incomplete, dubious, and often erroneous information and great fear, doubt, and excitement) call for rapid decisions by alert commanders. 

Sun Tzu

(2) entangling ground;

[The same commentator says: "Net-like country, venturing
into which you become entangled."]

Why the two military operatives? ... 

The word assume applies.

Inside the Trump administration, officials are expressing fears that Iran is in the “advanced stages” of planning attacks against U.S. officials.

More than 6,000 miles away, the Iranians appear convinced that Israel and the United States are preparing to unleash their third major attack in 16 months, a final push to force Iran to surrender to U.S. demands.

The conflict in the Middle East has entered a new phase in which a maelstrom of factors, from the political calendars in the United States and Israel to the potential for all sides to be seeking pretexts for action, are creating heightened levels of tension and risk.

This is how countries can escalate into full-scale war, several diplomats and outside experts noted. If the U.S. intelligence disclosed this week is right that Iran has credible plans to attack Americans at home and abroad, one senior European official said — “and it probably is,” the official added — one gunshot that appears aimed at a U.S. official could touch off a conflagration. So could a stray explosion near a bunker sheltering Iranian leaders, who already survived their predecessors’ deaths in a decapitation strike in the opening hours of the war on Feb. 28.

In the entire NYTimes article, the center of gravity was not discussed. If all out war ensues, the desalinization plants are gone. When that happens, Israel and the gulf states cease to exist.

“Insanity is doing the same thing over and over and expecting different results.” - Einstein

In closing ...

The Geometry of Escalation: Sun Tzu, Clausewitz, and the Levant

Military planners in Washington and Tel Aviv are operating exactly like hyperscaler tech executives—trying to brute-force thermodynamic chaos with probabilistic assumptions. But war, like quantum mechanics, is bounded by hard, deterministic reality.

Sun Tzu understood that terrain is the ultimate physical boundary. Iran is a mountainous fortress with immense strategic depth and the vast majority of its operational ordnance securely in place. You cannot brute-force that topography without absorbing catastrophic friction.

Clausewitz understood the fatal cost of that friction and the necessity of protecting a nation's "center of gravity." Israel’s center of gravity, as stated befpr. is not its military hardware; it's is highly fragile centralized desalination infrastructure. Shatter the water supply, and the state's internal architecture collapses. When conventional survival is mathematically eliminated, Isreal's Sampson Option looms.

Risking the global energy supply chain, the Levant, and millions of lives on the assumption that you can surgically manage a regional war against an adversary holding the geographic high ground is strategic insanity. The planners are ignoring the physical limits of the board, hoping probabilistic assumptions will override reality. But the geometry of the terrain always wins.

Would Eisenhower allow the US to be the lapdog of Israel in promoting an insane war such as this?

I think not. 

Official portrait, 1959

A transaction of some sort ...

Milkweed bug

AI agents, your brand new digital friend, never tires in helping you out from making recommendations on the color of socks you should buy to planning out a holiday trip, complete with booking air plane flights and selecting the right hotel accommodations, now extends to running your bank account.
What could possibly go wrong?

When looking at the little guy above, it reminds yours truly of an AI agent connecting to your bank just as the insect pays a visit to the milkweed plant. The scale and purpose may be different but the intent is the same. A transaction of some sort will be made between the plant and the insect just as a transaction will be made between the bank and the AI agent.

Doomsaying about the coming AI apocalypse is no longer relegated to outbursts
from a few tech billionaires.

Now, the major American banks whose policies dictate the flow of capital throughout the world are starting to worry about rogue AI, preparing contingency plans for the “day after” a theoretical AI-driven catastrophe.

That’s according to new reporting from Axios, which notes that banks are preparing for the worst as they experience a huge rise in AI agent activity on behalf of individual customers.

The main worry seems to be an influx of financial activity driven by autonomous AI agents, which have been authorized to access bank accounts by their human users. In some cases, as Axios noted previously, those agents are making moves that haven’t explicitly been prompted by humans — a few even going so far as to contact call centers on behalf of their users, without being instructed to do so.

That’s become a major liability for top banks like Morgan Stanley, Bank of America, JPMorgan, and Wells Fargo, which are scrambling to implement security procedures and policy updates to get ahead of the AI swarm.

Convergence 5

Failing to stay on top of emerging risks, some experts say, could result in financial catastrophe. As chief economist at the Apollo wealth management firm Torsten Slok explained in a late September brief, AI agents operating under instructions to “optimize the return” on their users’ money could mean banks “lose a large share of the cheap deposits they rely on to make loans, which would be a problem for the entire financial system.”

As skeevy as that admission is, there’s plenty of truth in the fact that our for-profit banking system is simply not designed to handle that volume of consumer-friendly optimization. A casino whose slot machines paid out to every player wouldn’t stay in business very long, after all.

Other finance gurus have pointed to the fact that AI agents might simply go haywire, regardless of what they’ve been instructed to do.

“You’re assuming they’re going to act properly on your behalf and they may not,” JPMorgan CEO Jamie Dimon told a room full of economists and financial experts in Chicago earlier this month. “You can’t stop it. You just have to, like, manage the hell out of it.”

The sorcerer's apprentice applies. 

Illustration: Sarah Grillo/Axios. Stock: Getty Images

Blinded by the light ...

Mirror Line

We are on the ultimate AI fast track. Where it goes, nobody knows but the AI bubble is accelerating at light speed while nobody's keeping track ... until now because there's no profit at hand as of yet while debt accumulates in order to keep the musical chairs of circular financing moving but like all things in life, nothing's infinite save for the folly of man forever looking for the next big thing. 

Circular Financing ... Aka Where's the Beef?

In its Global Financial Stability Report published last week, the global financial institution warned that markets everywhere are increasingly at the mercy of precarious AI investments.

The untold billions poured into AI has driven economic growth, the IMF says, but the boom could quickly invert if profits, which so far have largely proven elusive, never come to fruition — or at least not proportionately with the epic investment levels. AI stocks would tank, and the resulting market correction would send powerful shocks across the global economy.

“Growing leverage could be a catalyst for such a correction,” the IMF warned in a blog post about its findings. “Hyperscalers, as the largest data center operators are known, are borrowing more and more, while investors have been leveraging to invest in AI stocks.”

Blinded by the light ... Manfred Mann

"You must be be mad ...

 

Getty Images / Kevin Dietsch

In Where's the Beef?, yours truly waxed "poetic" about a cool 80 billion in losses, courtesy Anthropic, in the days leading toward a possible 1.5-2 trillion dollar IPO, something boggling the mind considering how much money Anthropic will be burning in order to build out data centers to enable grandma to make a better apple pie. 

To wit.

• Anthropic could spend up to $750 billion on computing power.
• $450 billion in noncancelable cloud deals over 7-10 years.
• H1 2026 net loss of $80.7 billion.
• Amazon, Google, Microsoft, Broadcom, AMD are involved in the commitments.

In essence, the $750 billion compute spend is mostly made up of massive, noncancelable

cloud contracts over the next 7 to 10 years.

It gets better.

New reporting by the Wall Street Journal revealed the mounting costs for the AI lab, which ballooned to a net loss of $80 billion in the first six months of 2026. Anthropic’s losses for the same period a year prior were $13 billion — still an eye-watering sum, but peanuts compared to its runaway spending this year (the WSJ called it “one of the largest half-year losses ever reported.”)

The bleak financial numbers come from a draft IPO prospectus viewed by the WSJ, which notes that the company’s revenue for the first half of 2026 grew by just $1.1 billion over the same period to $16.3 billion.

The figures add to the anxiety around how long the AI spending bubble can sustain itself. If Anthropic’s losses continue to mount at a rate far exceeding revenue growth, there’s simply no way the lab can dig itself out of the hole it’s burrowed for itself.

That would be bad news for the US economy as a whole, which now hinges almost entirely on circular AI investments and data center development.

"You must be mad" ...

The Cheshire Cat as illustrator John Tenniel depicted him in the 1865 publication

"But I don't want to go among mad people", Alice remarked.

"Oh, you can't help that", said the Cat: "we're all mad here. I'm mad. You're mad."

"How do you know I'm mad?" said Alice.

"You must be", said the Cat, "or you wouldn't have come here."

― Lewis Carroll, Alice in Wonderland

Any questions?

Pass the popcorn

Gemini & Robert E. - Riding the bomb

The CEO then also hailed Starlink, saying SpaceX wanted to place 100,000 satellites in orbit.

He also touted the company reaching more than 13 gigawatts of compute in 2027.

Pass the popcorn as this relates to Where's the Beef blurb regarding Anthropic's upcoming IPO when said company had a net loss of $80.7 billion in the first half of 2026 alone.

Major Kong riding the bomb in Dr. Strangelove as the ultimate image of enthusiastic, unstoppable momentum toward a massive explosion relates to Musk riding the same bomb as he aims for 13 gigawatts of compute capacity by 2027. Like Kong, he's riding the brute-force scaling bomb all the way down no matter the cost to planet earth
or to society as a whole.

Channeling Oracle, Anthropic and Meta, SpaceX is trying to solve the AI compute problem by building the biggest, hottest analog engine possible. 13 gigawatts is enough power to run a small country, all dedicated to processing sequential noise without making any money.

Musk projecting 13 gigawatts of compute capacity by the end of 2027 directly relates to Oracle's Project Jupiter and Anthropic's $750 billion cloud debt as they too are strapping themselves to the same bomb. 

Additionally, Musk states Starship will fly weekly by the first half of 2027 to build out a 100,000-satellite network to feed data back into a massive, overheated compute cluster that is fundamentally choking on it's own exhaust. 

It gets better ...

Think of the number of satellites plunging back to earth due to the fact the 100,000 will reside in low earth orbit, guaranteeing something untoward will happen to someone when a given satellite decides to make an inconvenient call by plunging into one's house some time in the near future.

 Pass the popcorn applies.

Where's the beef?

 

The definition of insane ...

Yours truly asked Gemini for financial facts as Google's a serious investor in Anthropic and some of the actual financials of Anthropic vis a vis their upcoming IPO raises a few questions in this writer's mind.

To wit.

Gemini with edits ...

The WSJ/Bloomberg report states Anthropic may spend up to $750 billion on computing costs. 

 It's massive ...

Breaking down the financials:

• Anthropic could spend up to $750 billion on computing power.

• $450 billion in noncancelable cloud deals over 7-10 years.

• H1 2026 net loss of $80.7 billion.

• Amazon, Google, Microsoft, Broadcom, AMD are involved in the commitments.

In essence, the $750 billion compute spend is mostly made up of massive, noncancelable

cloud contracts over the next 7 to 10 years.

The issue of exposure. Google (along with Amazon, who also holds a massive stake) is functionally bankrolling this. They invest billions into Anthropic, and Anthropic turns around and spends it right back on Google Cloud and AWS compute. It's a circular financial loop designed to monopolize the hardware.

The numbers are staggering. Anthropic recorded an $80.7 billion net loss in the first half of 2026 alone.

Where's the beef?

Anthropic is preparing to spend three-quarters of a trillion dollars on brute-force computing power.

Based on what? Actual Profit or wish for same as the numbers, as seen above, don't add up. 

Because Anthropic operates as an independent Public Benefit Corporation, Google and Amazon (who also holds a massive stake) are not legally on the hook to pay Anthropic's operating expenses. 

As stated before, this is a massive, circular financial loop. Google and Amazon invest billions in Anthropic equity and Anthropic immediately funnels that money right back into Google Cloud and AWS to buy compute access. Google's actual risk is that their massive equity stake goes to zero if Anthropic can't outrun its own burn rate—and with Anthropic posting an $80.7 billion net loss in just the first half of 2026, that burn rate is astronomical.

From this writer's opinion, it's completely insane.

Gravitational Wave

A superhabitable world ...

By Merijn Hos and Jurriaan Hos

Finding worlds more hospitable to life versus. earth is a no brainer as photosynthesis is quantum,
thus scale invariant and able to function under different light sources.

A few years ago, in a lab in Berlin, the astrobiologist Iva Vilović was thrilled when she observed garden cress sprouting under a light designed to mimic a “K-dwarf” star — an orange-hued star that’s cooler and slower burning than our yellow sun. To her surprise, the cress grew even faster and taller than it did under simulated sunlight.

Her results suggested that photosynthesis, the process that supplies the energy for Earth’s entire food web, can happen on planets orbiting these orange stars. “K-dwarf light is a very, very interesting light source, and it should be considered, if not prioritized, for any type of search for extraterrestrial life, in my opinion,” said Dr. Vilović, now at the Leibniz Institute for Astrophysics in Potsdam, Germany.

They're everywhere :)

In particular, alien life may thrive in the light of these stars on planets that are slightly larger than Earth, known as super-Earths. Scientists like Dr. Vilović believe super-Earths that orbit K-dwarfs might, in fact,
be the liveliest places in the galaxy — perhaps even more suitable for life than here. 

Scientists call these “superhabitable worlds,” planets that would allow carbon-based life to persist longer and become even more complex and diverse than on Earth.

A superhabitable world — as scientists imagine it — is about 20 to 30 percent wider and twice as massive as Earth, and is placed at the right distance from its star for water to flow on its surface. The stronger gravity of this bigger Earth would hold on tighter to ambient molecules than Earth does, giving the planet a thicker atmosphere and a warmer and more stable climate, fueling the growth of extraterrestrial plants and animals (or their equivalents). The super-Earth’s bigger iron core would erect a stronger magnetic field around it, better blocking cosmic radiation.

As for the superhabitable planet’s surface, picture paradise. An enlarged orb would be rounder and smoother than Earth, as its stronger gravity erodes continental shelves and fills in trenches. Water would spill evenly over its surface as shallow lakes and seas.

Just resting