Blowing in the Wind [2025 Edition]
Do "Oligarchs" have principles?
How AI, Politics, and Capital are Reshaping Our Future
This is the second That Was The Week of 2025, following the 2025 predictions on January 1st.
The first weeks of 2025 have revealed a profound transformation in the global landscape. The convergence of artificial intelligence, political shifts, and capital flows creates new power structures shaping our future. Many of my friends are gasping for air. The key changes are:
The AI Arms Race Intensifies
The scale of AI infrastructure investment has reached staggering levels. As reported by The Information, Microsoft's announcement of an $80 billion investment in data centers this year signals that the AI arms race is entering a new phase. This isn't just about building computing power - it's about controlling the fundamental infrastructure of the AI-driven future. Who owns the largest data centers seems assured to take a larger share of the value pie being created.
While the UK's attempts to position itself as an AI hub are admirable, they highlight the growing disparity between American and European AI ambitions. As the Financial Times notes, the UK "has half of what it needs to be an AI hub," reflecting a broader pattern of American tech dominance becoming even more entrenched. Silicon Valley's resurgence is particularly telling, with the region "devouring over half of all global VC funding in 2024," according to Crunchbase.
Political Realignment and Tech Policy
A fascinating shift is occurring in tech companies' relationship with politics. Meta's transformation under Mark Zuckerberg is particularly emblematic of this change. The New York Times reports that Zuckerberg has moved from "apologies to no more apologies," while simultaneously restructuring Meta's approach to content moderation and diversity programs. The appointment of Republican Joel Kaplan to lead Meta's global policy team, replacing Nick Clegg, signals a broader realignment of tech companies with the anticipated political landscape.
Musk in DC and Andreessen in Florida are symptomatic of these shifts in alignment. Marc has been featuring on various podcasts explaining his journey from Democrat to Trumpist. Elon has been super transparent longer. Both are, along with Zuckerberg, blowing in the wind. They represent a short term desire to benefit both themselves and their businesses. Nothing wrong with that. Biden's accusation that they represent a Tech industrial complex is also true but is it a problem?
The Venture Capital Revolution
The venture capital ecosystem is transforming. As TechCrunch reported, Ben Lerer's prediction about the fate of mid-sized VC firms suggests a bifurcation in the industry: "More mid-sized VC firms are heading for failure," while mega-funds and specialized boutiques thrive. This consolidation of capital mirrors the broader concentration of power we're seeing in tech.
The emergence of AI-powered venture capital, exemplified by the ai16z fund's reaching a $2 billion market cap, hints at how AI might reshape investment decision-making. This meta-application of AI to the funding of AI companies creates an interesting feedback loop that could accelerate technological development unexpectedly.
Concentration of VC funds into larger and fewer will threaten the value chain that starts with emerging managers finding and funding very early-stage companies. That can't happen so we should expect some correction with capital re-emerging at the early stage.
The China Question
Noah Smith analyzes the ongoing debate about measuring China's economic position relative to America's, which takes on new significance in AI development. The TikTok controversy, with the app facing potential shutdown rather than forced sale, demonstrates how technology has become inextricably linked with national security concerns. As Smith notes, "TikTok is just the beginning." We're likely to see more technological decoupling between China and the West. I think this is inevitable but troubling. The idea of nation-states exercising control over private companies' global ambitions has no positive merit.
The Moderation Overcorrection and the Return to Free Speech
Perhaps the most significant shift in early 2025 is Meta's dramatic reversal on content moderation, which signals a broader reckoning with past approaches to online speech. As reported by Spiked Online, Zuckerberg's "bonfire of the orthodoxies" represents more than just a policy change - it's an acknowledgment that the tech industry's previous approach to content moderation may have done more harm than good.
Meta's elimination of fact-checkers and reduction in content censorship point to a growing recognition that terms like "misinformation" and "disinformation" have become problematic tools. Brendan O'Neill notes in his analysis that these terms have often been "weaponized to punish dissenting views" rather than protect truth. Meta's admission that government entities pressured them to censor certain content, including humor and satire, raises serious questions about the appropriate boundaries between platform governance and state control.
This shift comes at a crucial moment when the concept of "misinformation" is reevaluated. What was labeled as misinformation one day often became accepted fact the next, particularly during recent global events. The arbitrary nature of these designations has increasingly revealed them to be, in many cases, mechanisms for controlling narrative rather than protecting truth.
The move away from heavy-handed moderation also acknowledges a fundamental principle of democratic discourse: that the cure for problematic speech is more speech, not enforced silence. As Meta's new approach suggests, the tech industry's previous attempts to arbitrate truth may have inadvertently undermined the democratic processes they claimed to protect.
This return to free speech principles isn't just about correcting past overreach - it's about recognizing that robust public discourse, even when messy, is essential for a democratic society. One Meta executive noted in internal communications, "We need to trust our users more and our content moderators less."
My take is that I welcome the changes. I do not believe that "disinformation" or "misinformation" are concerns and are closer to weaponized political words meaning "I disagree with you". Labeling and canceling these ideas is a lazy way of combatting them. That said as the title this week suggests. Zuck is definitely "Blowing in the Wind" and making astute business decisions. I doubt he has any real moral line in play.
Looking Forward
Several trends suggest where this is all heading. The concentration of AI infrastructure investment in the hands of a few American companies, combined with Silicon Valley's dominance of venture funding, points to an unprecedented consolidation of technological power.
Joe Biden's farewell warning about the "Tech Industrial Complex" and Oligarchy (Billionaires in power) echo what many feel.
Scott Alexander points out in his analysis of AI's impact on wealth inequality, we're moving toward a world where "there will be no social mobility and everyone's wealth will grow at the same rate." This raises questions about the social implications of AI-driven automation and wealth concentration.
My take is that scientific breakthroughs in AI and other disciplines driven by AI will unlock enormous value, creating the conditions for abundance. The concentration of wealth this produces is inevitable. When billions of humans are owners of hand held super computers this value will produce billionaires. There will be more very wealthy people. And they will have both economic and political power. But that is no more the end of history than was the case after the collapse of the Soviet Union.
A tech industrial complex. looked at this way, is beneficial to society despite the concentration of wealth.
Abundance creates the possibility of human freedom from work. It only leaves one question to be answered. Who will benefit from that wealth? Without abundance, the question does not arise. But once it exists it can be used to human benefit.
How that happens is a good discussion. Biden seems to want to stop it from happening. That is symptomatic of the fact that Democrats seem to not have any real definition of '"progress" or the part technology plays in it. Or of the relationship between progress and wealth.
The billionaires have no project beyond driving tech innovation. They certainly are not consciously anti democratic. Basically they have no broader agenda.
Conclusion
The technology industry is not just being reshaped - it's being fundamentally reconstituted on a rapid growth platform. Massive AI investments, political realignment, and capital concentration create a new power structure that will likely dominate the next decades. How to seize that and use it for good should be the focus.
The key question isn't whether this transformation will happen but whether we can manage its implications for society, democracy, and economic opportunity. As we watch these changes unfold, it's crucial to remember that technology's impact on society isn't predetermined - it's shaped by the choices we make today about how to develop and deploy these powerful tools.
The trends we're seeing in early 2025 suggest that a smaller, more powerful group is increasingly making these short term choices.
Whether this concentration of power will lead to more rapid technological progress or create new social and economic challenges remains to be seen. We do have the option of creating a genuine view of the future we want and then fighting to make it happen. That's where I come out.
What's clear is that we're witnessing a pivotal moment in the evolution of the technology industry, which will have far-reaching implications for years to come.
Essays of the Week