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There Are No Oligarchs
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Speaker 2
It is Saturday, January the 25th, 2025, the last weekend of January, the last weekend where we can talk about technology with my friend Keith Teer, the publisher of the That Was The Week tech newsletter. This week, Keith is focusing on on the tech brotherhood of Bezos and Zuckerberg and Musk and all the other billionaires of Silicon Valley. But he argues in his newsletter, in his editorial, that there are no oligarchs, just what he calls technologists with a passion for change. So Keith... Why are there no oligarchs? Most people are taking for granted that these guys, the Bezos and Zuckerbergs and Musks of the world are oligarchs. Why do you disagree?
I think the word oligarch, which Biden triggered, is really just an ideological word for anger at losing. I don't think there's a really serious intellectual belief that there's an oligarchy. I think it's more of a a swear word by losers to depict winners. And the reason I say that is at the end of the day, we should all be super happy that the world's largest technology companies, all of which are American, by the way, gathered at the inauguration, and I only showed three of them, but Tim Cook was there. I mean, everyone was there. Everyone who was anyone was there.
Altman was there. And normally, innovation is a private market affair. And what is happening is that innovation leaders and government are converging around goals, which on the whole, no matter where you are politically in your head, you should welcome, because it's so much better than the opposite, which is that technology is being regulated and banned and constrained, given that technology is the fuel of pretty much all human progress.
So let's get into it. You said that this is a response to what Biden called the tech industrial complex when he was leaving office. I think he warned about it. You argue in your editorial that... The fact that Musk and Zuckerberg and Altman are fighting over what the future should look like, especially in the latest Stargate controversy this week, assigns, and I'm quoting you, that the so-called ology is actually not. They are businessmen seeking favor in Trump, all with their own goals, often conflicting. As news compared to the investments of AI with this claim of oligarchy makes the latter the less important. the incredible sideshow. So what for you does oligarchy mean? As I was reading your editorial, I was thinking, what exactly does Keith mean? I looked it up on the internet, which is supposed to tell the truth about everything. And it's a noun and its definition is a small group of people having control of a country organization or institution. So why aren't these guys an oligarchy?
Well, if you do the dictionary definition, they're clearly not. They have no control over anything. I mean, Musk is in something called Doge, which is not even governmental. It's like a think tank. He has influence, but he certainly doesn't have control. And it showed this week when Trump made the announcement with Masayoshi's son and Altman and Musk disagreed with it. I'll try to undermine it, that these are not a coherent body of people governing or having control. They're certainly a competitive group of people seeking influence. And that's very different to an oligarchy. So just literally, it's intellectually lazy to call it an oligarchy. It's an attempt to say that democracy is being undermined in some way, when in fact it's the opposite. It's the triumph of democracy. Somebody won an election and has recruited into their efforts the leading technologists of the era. That is definitely a very democratic thing.
I mean, some people might say, well, they haven't invited you or me or them. I mean, it's only because they've got lots of money and lots of power. And I looked up oligarchy on Wikipedia, and there was lots of references to Aristotle. And according to Wikipedia, which tends to be reasonably accurate, Aristotle pioneered the use of the term as meaning rule by the rich, contrasting with aristocracy, arguing that oligarchy was the... perverted form of aristocracy. Biden warns that the tech industrial complex, what he calls the tech industrial complex, is ruled by the rich. These are the richest people, not just in America, Zuckerberg, Musk, Waltman, Bezos, but the richest people in the world. Isn't it a sense ruled by the rich? I mean, your argument is that because they don't agree on everything, they're not an oligarchy.
Well, I'd say, Andrew, that is trying to use economic truths to create a political truth. There are economic truths that these are very wealthy people. By the way, they're all self-made. Unlike aristocrats, who are hereditary for the large part, these people are self-made. They started with nothing. They built something. It became valuable because of timing and wind in the sails. And so their wealth is not granted, gifted, or unfair.
No one's arguing that. I mean... Aristotle might have been a defender of aristocracy, but he talked about the rule of the rich. So no one's arguing that they're not self-made. But I still don't really understand your argument about the fact that they're divided. I mean, they're divided in a sense, but in another way, they're united. They're all sympathetic one way or the other to Trump. They all want to...
I think the unity comes from, and it was, you sent me this morning a piece by Reid Hoffman, and there's another piece by Mark Benioff in the newsletter. The thing that unites them, and you know my views on this, is they want America to be successful. It's kind of like Mark Andreessen's American Dynamism. that syncs with Trump's threats that he made in Davos this week, that unless you build your factories in America, we're gonna tax you through tariffs. It's this American centralism and global ambition brought together in a group of people that is almost entirely economic, not political. And that's the real difference between oligarchy and what's going on. It's economic, not political. You know, Musk isn't trying to get laws passed. In fact, he's trying to remove regulation.
Well, I don't agree with that. I mean, he's trying to shape policy. He's trying to remove laws. Otherwise, why would he be wasting his time? He's a busy enough guy already. Why would he be involved in the Doge project? And I'm not suggesting he's doing it purely for his own self-interest or for the interest of Tesla or SpaceX. These are individuals with enormous power because of their wealth. I mean, otherwise, if Musk wasn't a wealthy guy, he'd just be another annoying autistic fellow on the internet, wouldn't he?
I think, Andrew, we on this show have prefigured this. If you really want to understand it, you've got to understand the impact of Lena Kahn over the last four years on entirely pissing off the entire technological elite.
It entirely has. Andreessen's crypto ambitions have been thwarted, regulations preventing mergers and acquisitions. The Democrats more or less turned against them, their natural allies, by attacking them consistently. And these people are angry. They've been bullied, by the way. These rich people, the richest people in the world, have been bullied by democratic government and are now seeking freedom by...
asking you to understand the context well it's their perception maybe is they've been bullied but one wonders but i still think you're arguing actually in favor of a tech industrial complex for better or worse just your narrative is that the the the powerful of silicon valley were bullied as you say by lena khan and the biden administration so they got together And now they're shaping the new administration as very, very wealthy and powerful individuals.
I think I can embrace that. I think there's a big difference between the tech industrial complex as a term and oligarchy as a term. I think... tech is now the dominant part of every single stock exchange in America. And there is no industry without tech. And industry is a complex. But there's no conspiracy. It's not like there's a plan.
not the same thing are you saying they are i i mean your editorial this week is on the oligarchy rather than the tech industrial complex i just think that confuses things um i think there is an oligarchy made up the reality of america today is of this new oligarchy of technology, multi-billionaires, soon perhaps to be trillionaires, they have enormous power. Now, whether you call that a tech industrial complex, I mean, obviously, the term was borrowed from the military industrial complex. But in the 50s, when Eisenhower talked about that, he wasn't really talking about individuals. He was talking about companies, I guess, like Lockheed or Raytheon. Today, we're talking more about individuals. So I'm not sure that the I wouldn't necessarily use the term tech industrial complex. But I think oligarchy is a useful term to describe the reality of contemporary America,
Well, I think their subjective side wants the best for America. I think there probably is a correlation between a strong American economy and everyone else in the world. By the way, there's a couple of very interesting comments that you maybe can't see, but I can see them. One is coming in from LinkedIn, and it refers to Michael Porter's book about the politics industry. And he makes the point that even though they may not be strictly oligarchs, money does have power. and is asking, how do we describe their outsized power if not through the word oligarchy? Yeah, I agree with that. That's Steve H. And then Guzuta, this is a really interesting point, says there's a symmetry between a right-wing suspicion of a deep state and the left-wing suspicion of an oligarchy that, in a way, both of them are attempting to characterize what they hate by extending the analysis beyond where it really should go. And I kind of agree with that on both sides of that.
Well, but the other thing about your position, which is odd, is that we've been doing this show for years now, Keith, and we've known each other for many years. And if there's one thing that I would say captures your view of the world, it's a defiant internationalism, a dislike of the nation state, of borders, of parochialism. And yet here you are, you seem to be celebrating Trumpian nationalism and indeed the Make America Great Again initiatives of Andreessen and Musk and Bezos. So how are those compatible?
Well, my general view is globalist, but I don't think you get to globalism except through successful value creation, which is essentially capitalistic. And at the moment, at least, is enshrined within nation states. So I'd be just as bullish about China's innovation as I would be about America's. I'm not narrowly pro-American. I'm pro-innovation and pro-value creation. And I do think ultimately that is a global project that benefits humanity. I don't see humanity being in good shape unless economics are in good shape.
And I've got a new term maybe for you, rather than tech industrial complex. What we have in America now is national capitalism, not national socialism, but national capitalism, which everyone including yourself as i said i'm slightly surprised with that seem to be
embracing well you know the you and i both are sociologists in in part of our background there's a long 100 years long narrative that says that capitalism inevitably creates stronger states it's called the socialization of production as things become so big that only governments, and there's a good discussion this week about Stargate, only governments are able to step up to the plate at the scale required.
Yeah, so let's talk about, so whether we call it national capitalism or tech industrial complex or an oligarchy, something is going on here. In terms of the news of the week,
and the Essays of the Week, what does the Stargate story, Keith, tell us? I know your argument is because Musk and Altman are on different sides of this one, it proves there's no oligarchy. But tell us about Stargate, what you make of it.
Stargate is really an open AI manoeuvre to retain its dominance in the AI races. It's getting government behind a massive data center rollout that only runs OpenAI's AI. Nobody else's.
Yeah. And so you could think of it as capturing territory. And the fact that Trump got behind it when Musk's Grok is a direct competitor was and that Musk poured cold water on it, it tells you that it's really much more about maneuvering dominance in the AI wars than anything else. Now Satya Nadella from Microsoft was interviewed this week, making the point that his contract with OpenAI means that Microsoft will benefit even as OpenAI seeks additional platforms to be hosted on. So this is also an anti-Microsoft move by OpenAI. And it's part of the separation of OpenAI and Microsoft, which is also talking about...
Well, Benioff makes the point that this is coopetition that's going on. He believes that and they're all his friends, by the way, and they're all friends with each other to some extent. He believes that the AI moves and Stargate are all symptomatic of the early stages of AI as we as it becomes general.
to kind of own the future value of the human impact of AI. And he sees it in those terms. He thinks Salesforce is one of the players. He talked a lot about the agents that he's running on his phone.
Well, he would do, wouldn't he? He's the CEO of Salesforce.
Words and timings
Well,hewoulddo,wouldn'the?He'stheCEOofSalesforce.
Speaker 1
Yeah. And so Benioff is... very relaxed about what's going on. And Benioff historically was a Republican and then became an Independent and certainly is not pro-Trump in any strong way, but he's very pro this American dynamism point of view.
When we think of oligarchs, of course, the world has come back, the word has come back into vogue in Putin's Russia and the Russian oligarchy. Are there comparisons as these... powerful wealthy people jostle for positions within trump's america are there equivalents in putin's russia are they entirely different well there's no economic
underpinning to the russian oligarchy it's an entirely administrative clerical dictatorship layer separated from both economics and politics And so, yes, and I'm not even sure it's an oligarchy, by the way. I think it may be more of an autocracy because I don't know that there's obvious... Well,
You're right, he can't, but you will have noticed Trump is now talking about American government co-ownership of TikTok. which is a step in that direction. And so there's some interesting movement that implies future government involvement. And I think Stargate may not be government involvement monetarily, but the government may own some of the economics if it works out well.
I know, Keith, you were impressed with Trump's performance at Davos, and I use that word carefully, performance. He, of course, is a performative figure. Niall Ferguson, you don't have this in the newsletter, but it's an interesting piece in Free Press, suggests that you should always bet against Davos Man, that the old Davos Man of fetishizing diversity and DEI and all the rest of it now has been replaced by MAGA sentiments, but they're likely to change. Why were you so impressed with Trump at Davos? He was very aggressive in terms of And I know that Europeans broadly are very nervous about what's happening now in the U.S.
Well, he was strident in the clarity of his message. He basically said a few things. Number one, I won, you lost. And by you lost, he meant Davos man. That's a collective word for wokeness, cancel culture. DEI, all the things that Europe... Which may be a slight exaggeration, but anyway. Well, it's Trump, so it's bound to be. Then he talked about the price of cooperation with America is investing your factories in America and producing there. And if you do that, you'll get tax breaks, not tariffs, which was very strident. He talked, you know, he basically talked at them on things that, you know, the world is moving away from Davos man's view of the world. And afterwards, it led to a reflective conversation when Trump was not in the room, where one of the, I can't remember who said this, but this guy said, we lost, he won. And he didn't mean just a battle. He meant the whole era, intellectual era, has now moved on to this pro-capitalist, anti-woke, merit-driven. Trump used the word merit a lot, as opposed to the DEI thing of putting a thumb on the scale.
Yeah, I mean, we've had this conversation before. I think you massively exaggerate the role of DEI, but that's another matter. What about the Democrats in particular? You connect with an interesting piece about Biden being the last president of the 20th century and the TV era. Why did the Democrats, why have they lost this? You know, they were always the... And Hoffman, of course, was a massive funder, perhaps the biggest funder of the Democratic Party. Why have the Democrats lost this battle? Is it because they have no alternative to the national capitalism of Trump?
Well, I... I think it's a bunch of stuff, but the broad brushstroke would be they attacked their natural allies by emphasizing minority rights over progress. And they identified minority rights with progress as if that was the only measure of progress. So they didn't value technology because they don't value economic progress. They didn't value the working class because they're not a minority. They kind of alienated their natural audience.
Yeah, I mean, I certainly agree in part with that. It's a very interesting situation. Meanwhile, a couple of other interesting pieces of news that in your... Excellent newsletter, Keith, of this week. A piece by Henry Farrell on why we're getting the social media crisis wrong. I know Farrell is a very respected academic, but you don't agree with Farrell's analysis of social media. What does he tell us and why is he wrong?
I always think he's interesting and he makes me think, so that's always a plus. You're right, I don't agree with him. But I do think he's making some interesting points. The first thing he's doing is he's saying social media is way less powerful than you think for the things it's normally accused of. You know, like forcing teenage girls to commit suicide and stuff like that. Or misinformation. which he also disapproves as being the analytical framework. But what he does think is that social media breaks down the ability of the population to act coherently together in democracy by atomizing people. And so you end up with no coherent narrative or debate or discussion that leads to outcomes. So his point is that the body politic is atomized and disrupted. Now, I think even in that, he's giving social media way too much credit. I think people's opinions are really formed through their life more than anything, like their bank account is a big part of it, what they can buy or not buy for their home, how often they get a car, if they can afford a car, what kind of a place they live in, what the social context is of their city, The anti-immigrant sentiment is driven a lot by that. So I think he's de-emphasizing life as the formation of ideas and overestimating social media.
He is challenging the idea that disinformation is the heart of everything, which I think is healthy. Another piece that I thought was interesting was a comment by Brian Armstrong, the CEO of Coinbase, suggesting that Bitcoin, he says at least, will surpass gold reserves. I mean, given the Trumpian commitment to crypto, maybe this isn't surprising. Firstly, is that true? And what will be the implications of that?
Well, there's a real discussion about Bitcoin as a reserve. that Trump has embraced and signed an executive order this week that David Sachs was in the room having him sign, that points the way forward to both stablecoins and Bitcoin playing a role in Treasury. And if that, and Brian Armstrong contrasts that to gold, it doesn't seem impossible that a digital reserve strategy involving stable coins and Bitcoin could start to play a big role at the level of nations. That seems possible. So I put it in, mainly as a placeholder for the future. I don't really see any signs of it happening quickly, but I think it's on the agenda.
Well, as we know in Silicon Valley, Nothing happens quickly until it happens, and then it happens quickly, so to speak. Brian Armstrong, of course, made a name for himself a few years ago in the first Trump administration, not allowing anyone at Coinbase to talk about politics or complain about Trump. My guess is he's a big Trump supporter as well. My sense also, and this is perhaps for later conversations, Keith, that ultimately this massive bet that the MAGA people are making on crypto is their soft bet. economic and perhaps political underbelly, that this is the thing that could go really wrong quickly. But that's just my sense. Do you think that there's some truth to that? Is it possible that this thing will just unravel? I mean, it's all very well in theory, talking about Bitcoin replacing the Federal Reserve. In practice, it could be an absolute catastrophe.
Well, it certainly wouldn't replace it. It would be one of the instruments the Federal Reserve uses for its own reserve strategy. I don't think they're looking to replace it. But could it go wrong? You know, all currencies, including the dollar, rely on trust. And trust is normally backed by government. I would say the U.S. government trust over currency is probably at an all-time low, given how much notes they printed since COVID-19. And with the, what was it called, when they put money into the economy in order to try to boost it. Biden did a lot of that as well. So I think trust is at an all-time low and Bitcoin trust probably is at an all-time high.
Yeah, I mean, we're going to hopefully be doing this show by the end of the 2020s, Keith. If I had a guess, something's going to go seriously wrong by the end of the 2020s with all this. I hope not. Well, so do I, but it's something probably will. And the chances are it's a Bitcoin crypto speculative mania is most likely. One person who might be worth, certainly for the Democrats to watch is my, you were kind enough to make my interview with technologies aunt, self-appointed aunt, and court jester, Esther Dyson, who is writing a book about basically how to leave the stage. Esther is a real old-timer, a real veteran. She's been around since the beginning. And you enjoyed listening to Esther. You thought she was quite wise, didn't you?
I did. You know, I've known Esther since I first before I came to the States, actually, in 1996. Her PC Forum conference was something I attended every year. We've never really been friends, but we're certainly acquaintances. And I thought she came across very thoughtful and humble, actually, and thoughtful about retirement. She depicted retirement as not stopping, but passing on to the next generation, the platform as it is. You know that old phrase, we build on the shoulders of giants. She's, you know, in a less humble form, she'd be saying, I'm one of the giants whose shoulders you're going to build on top of.
Yeah, how to be a good ancestor, which was one of the, she and I spoke at DLD and that was one of the speeches. Let's move on to startup of the week, which is particularly interesting one, Deep Seek. A lot of talk about how revolutionary Deep Seek is. Tell us what they are and why they're so significant.
Well, DeepSeek has successfully challenged, received wisdom about what it takes to be a leading AI platform vendor. We've all talked about you need 100 billion or more to become a competitor with OpenAI. What DeepSeek did is it took a technology approach called reinforcement learning. It leveraged OpenAI's models and taught its own model by questioning OpenAI's model and looking at the answers. That's the simplistic way of talking about reinforcement.
They're a Chinese company, and they released DeepSeek R3 a few weeks ago, and everyone was amazed how good it was. And it only cost them small single-digit millions to do it, not hundreds of billions. They then have now released a learning or reasoning model called R1, into open source. So you can download the app cursor, and DeepSeek R1 is one of the models you can use, and you can start using it to program. And this company hasn't really raised very much money. So it's basically saying the idea that you need a $500 million Stargate to compete, may be flawed. It may be that there is possible success in much cheaper approaches to building AI models.
So what does that actually mean? What would it mean for the companies that are investing billions, sometimes almost tens of billions of dollars in AI, OpenAI, Google, Facebook, Microsoft, Amazon?
I don't think anybody knows yet, but there's certainly a possibility, no more than a possibility, but it's a real possibility that this is a shot across the bows of the need to spend hundreds of billions of dollars to be competitive. And if a Chinese company with no state backing and no real investment can build a model that now is at the top of its game against others in a very short period of time, by the way, for almost no money, that is quite astounding.
It could mark a very sharp correction of the markets, given that the markets are being driven by the big seven or eight tech companies and the confidence in AI. If all this is true, we will see it will play out over the next few months and years, Keith. You connected with an interesting piece by Rohit Krishna and one of your one of your best correspondents who you always connect with. What would a world with AGI look like? And Sam Altman has been talking about that too. Advanced AI, he X'd, may require changes to the social contract. Advanced AI or advancing AI, of course, is neo-AGI. And then he writes, the entire structure of society will be up for debate and reconfiguration not everybody agrees um some people believe that it should be society driving agi or tech and rather than the other way around what
do you make of the ultimate uh comment well this is altman um making a point that at least for now is exclusive to him but should be being made by everyone which is the disruption that ai will mean for the job market needs a social response. Otherwise, we're in deep trouble because the gap between wealth and poverty will accelerate massively. And that's what he means by the social contract. The social contract today is probably best summed up as a world in which labor and capital compete for their share of wealth. He's basically saying the labor side of that is going to be incredibly weakened. Therefore, capital has to have an answer to how humanity is supported.
And that, of course, he's written long pieces. In fact, a few years ago, he wrote a very long essay on the need for guaranteed minimum income and other initiatives. This is Albert Wenger's world after capital, isn't it?
it's certainly part of it. I think Albert wrote at a time when some of these trends were emerging, they're now kind of screaming at us. And so the imperative to talk about this stuff is much bigger than ever. And I do think that the relationship between that question and democracy is very direct.
And it comes back to your argument, which I don't agree with about the absence of an oligarchy. The reality, or at least the dark vision, is that it's all very well talking about the change in the social contract. I'm not sure there really is a social contract in America beyond the classroom. It simply means that this oligarchy will become more entrenched than multi-billionaires, and if indeed their world becomes true, they're only going to become richer.
There's a comment again from Steve H on LinkedIn who's making the point that it's interesting that conservatives whilst talking down the Democrat lack of impact on the poor, that the conservatives are even less able to uplift the poor. And Altman is a standout there. He really seems to care that there is a clear answer to the question, how will humanity benefit?
from automated well yeah I mean I again I you give this guy the benefit of the doubt if he really cared why would he be turning open AI into a for-profit company why wouldn't he have stuck to the original principles of the company well because
he doesn't think he could raise the amounts of money required to make it successful unless it was for profit because investors wouldn't give him money well we shall
see Keith a lot of enormously important stuff I mean I think you're absolutely right that There's no difference now between technology and the world, and everything is controlled and shaped by technology. Reid Hoffman famously said that a few years ago. Now that's the world, for better or worse, we're living in. All the issues of the existence or absence of an oligarchy, of AGI, of AI will be played out over the years. So lots of good conversation, Keith. And I will see you next week for more That Was The Week. Thank you so much.