Macro, Geopolitics and the Role of AI

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1:33And from August the 15th, we're closing the doors to any new members while we focus on that. But you do have one final chance to get in that door. Until August the 15th, you can level up for a whole quarter of Real Vision just for the price of$20.14. When you go to realvision.com forward slash last chance, you'll see why we chose that price in particular. It's something about Real Vision of old. You'll get to experience the new platform before the general public with no obligation to stay after that three months. And a price that works out for like$6 a month. It's what you call a no-brainer. Anyway, I hope to see you on Real Vision.

2:13It's an incredible community. And my God, this new platform is going to be extraordinary and will change as many lives as possible. That's realvision.com forward slash last chance. All right, guys. Maybe we can just get started and Raoul can join us in process. Let me just sort of tee this up, talk a little bit about what we're going to be discussing here. As I said, if you've just joined us, we're joined today by geopolitical expert Dee Smith, Brent Johnson, of course, the progenitor of the dollar milkshake theory, and David Matten, the mind behind the New World Same Humans newsletter to discuss some of the most important topics of our time, macro geopolitics and the role of AI.

2:52Obviously, it's a whole lot to talk about. Guys, why don't we just go around the horn and introduce ourselves? I'm just going to go through in the order that I see you in here on my screen. Santiago, first to you. Yeah, hi. Thanks for having me. Do you just want me to introduce myself, or what do you want me to do here? Just introduce yourself, if you would, and we're going to just go around real quick and maybe say, give us a little bit of a minute thumbnail. I'm sure most of the people who are on this Twitter space have heard of all of you guys and probably are following your work. But just in case there's someone new who might be joining.

3:24Sure. So my name is Brent Johnson. I've got a wealth management firm called Santiago Capital, where I manage money for a number of high net worth individuals and families. You know, I've been doing it for almost 25 years and kind of really focus on the big picture and then kind of hone down from there. And as a result, I tend to look at things like, you know, currencies and monetary policy and interest rates and geopolitics and all that kind of stuff. So, you know, looking forward to this conversation and what everybody has to say. Thanks very much, Brent. always a pleasure. David, go ahead and introduce yourself.

3:57I'm just going to go read through on the order on my screen. David, you're up. Thanks, Ash. Hi there, everyone. My name is David. As Ash said, I write a newsletter on trends, technology, and our shared future called New World Same Humans. When I'm not writing that newsletter, that goes to about 25 ,000 founders and technologists and policymakers and academics. When I'm not writing that, I spend a lot of time speaking to leaders inside large organizations, corporations, government organizations about emerging technologies and what they mean for us all and how those organizations should respond.

4:36And I write about emerging technologies in RAL's institutional newsletter, Global Macro Investor. So if there's any GMI readers listening right now, they may recognize my name from there. Wonderful. Thank you so much, David. I'll go next. I'm Dee Smith talking to you from Fort Worth, Texas, from a very warm Fort Worth, Texas, although not as bad as the last few days. I run a private intelligence company that I founded about 27 years ago. We work mostly for large investors, pension plans, hedge funds, venture capital, various kinds of family offices, sovereign investors, doing transactional intelligence, which ranges from looking at the targets of investment that they're considering to looking at risk and threat factors from geopolitical to those associated with global change, to looking at the kinds of problems that might not normally be in the straight line analysis of the kinds of analysis that investors do.

5:46We have also been very active with Real Vision. I did a series called World on the Brink about six years ago and have done a number of things since then. Always a pleasure to work with my friends at Real Vision. wonderful wonderful guys uh so listen just a bit of uh information for people who may not know uh here's the deal 20 and 14 cents for three months of real vision essential uh if you're interested so should one of us kick this off in this conversation can you guys hear me d can you hear me i can hear you okay so i think i think we just had a little bit of trouble on the twitter spaces that happens from time to time is uh is raul on raul is not yet here but he's going to be joining us in just one second.

6:33You know, as I was saying, right now we're in the middle of this promotion at Real Vision, $20.14 for three months of Real Vision Essential. I think that works out to something like$6 a month. So basically, obviously a very low price for the content that Dee was just talking about. Obviously Santiago has been on the platform. David? Well, I'll take the lead. Just wondering what everyone's thoughts are on the concatenation of events that we're seeing this year, which seems to be ever intensifying on across so many fronts, from foreign policy and international relations to unexpected economic elements to climate change to supply issues that don't seem to go away to global.

7:22global splintering. What's, David, what's your take on that?

7:32Yeah, there's no doubt that we're just, we're living through something right now. And obviously, I come at this from the emerging technologies perspective. You know, as I was reading Robert Scoble's Twitter feed today, I know Ralph's a huge fan of his as well. And he was essentially saying, it's hard to sleep right now because there's so much happening in AI and in machine learning. And that's the way I feel. I mean, it appears we are at the beginnings of an intelligence explosion, just with profound consequences for the economy, for the culture, for our collective lives, our political lives. And I'm so interested to get into some of the geopolitical implications of that.

8:16I mean, it's huge. And we're just at the beginnings of figuring out are my top line thoughts on it. But Ash, I think you were talking a bit about Real Vision and its promotion before before Dee jumped in. Yeah, right now, it's we're obviously we're running a special. I like a lot of people on this conversation have probably watched Real Vision content. If you're not currently a member, come and check it out. Twenty dollars and fourteen cents for three months. It's obviously a great deal and a significant discount from the usual price. So come on in and check it out if you're not already a member.

8:50Guys, let me just sort of tee it up broadly, and maybe we could just go around again and get a bit of context from each one of you on what you think the current state of play in the world is. How would you describe at the 50 ,000 foot what we're seeing right now? Obviously, there are a lot of significant news stories. We talked about some of them at the top of the show that are threatening to break onto the surface here in a more significant way. So, Brent, first to you, what are your thoughts on the overall state of the world right now? Well, so I guess the first word that kind of comes to mind is precarious, right?

9:31It doesn't mean that necessarily something is bad going to happen. but I feel like the table is set that if something does go wrong, a multitude of factors could potentially go wrong all at the same time. And the way I kind of liken it is, you know, if anybody has ever played sports before, as long as you're winning, you don't really have too many problems with the other people on the team, right? But the minute you lose a couple games and maybe you start getting into a slump, now you don't really like the way that guy passed you the ball, right? Or you don't really like the way that that guy called that time out at that certain point in the game.

10:07And you start kind of nitpicking all of these little things that didn't matter when you were winning. But now that you're losing, they start festering. And it's kind of the same thing, too. When everybody's making money, there's no real problems, right? And you don't mind if somebody turns in a little bit bigger expense report. and you don't really mind if you don't close every deal. But then as the economy starts to turn down and you're not making money anymore, now you start focusing on those expense reports and closing that deal becomes a little bit more important. And I kind of feel like that's where we're at now because for a long time the world was globalizing and we were in a very long bull market and we had interest rates going lower And that provided a lot of cushion for a lot of things, you know, and not only did it provide the ability to make money, but it allowed a lot of other things to take place because people didn't have to focus so hard on making money, you know, whether it's culture or politics or whatever it is.

11:16But now that interest rates have started to rise, globalization has kind of hit that into the pendulum and it's kind of starting to swing back the other way. And I feel like everything is just on the verge of a big battle, whether you're talking about politics or social movements or finance or military alignments or geopolitical trade unions. And I feel like everybody's kind of looking over their shoulder and just waiting for the next shoe to drop. And I don't know what the catalyst will be. All I know is that it's set perfectly that if a catalyst does come along, we can kind of have all of these different things, politics, religion, you know, economics, social movements kind of all run into the intersection at the exact same time.

12:05and I feel like it could just be a real big mess when that happens so that that's that's so without putting too big of a doom and gloom um you know bow on top of it that that's kind of my my my view of the world right now hey everyone we're going to take a quick pause and hear a word from our partners we'll be right back

12:26Brent that is the the metaphor of the decade I love it uh when the team is winning nobody complains about how you pass them the ball but the minute that something underneath the surface begins to go wrong the teams start losing suddenly all of those little things that didn't seem like they matter suddenly move to the forefront and very much matter indeed it looks like Raul Pal has just joined us hey well Raul how you doing man do you want to just go around the room I'm happy to. And I think that you're exactly. I think that the thing that that really impresses itself upon me is that all of these changes have happened at the same time, as you say.

13:09And that means the way I read that is that we're in a different kind of regime. We're in a different reality than we were. And I think it's not just these single things, interest rates or structural inflation or what have you. I think that it's a change of an era almost. And I think your observations are exactly right, that it's much more troubling to people. But I think that in itself is actually a part of the causal chain and maybe even a causal loop. And I think that one way to look at this is that it has to do with the complexity of the global environment. And, you know, one of the really interesting things about science in the late 20th century was how much we discovered about complex systems as we got larger computer models and more computer power.

14:00And how they create order and disorder on their own and their feedback loops and hidden links and unintended, unexpected consequences. and there's an inherent unstableness or fragility as certain conditions come up and you get these tipping points and cascading phenomena and so forth. And I think that that has essentially created a level of uncertainty that human beings find it very difficult to live with. And markets, you know, are human constructs and society is a human construct. So emotional valence, the emotional response that we have to these things has very real world effects. And I would go as far as to say that the complexity and the uncertainty, radical uncertainty, by radical I mean that the near future looks less and less like the recent past, is actually making people to some extent deranged and even delusional.

15:01And it affects the way they act, that causes more unpredictability and therefore it just strengthens the cycle. Dee, are you able to hear me right now?

15:14Dee, can you hear me? I think we may be having some problems with the connection there, unfortunately, with Dee Snider. Hopefully we'll get that cleared up in just a second. Anybody else want to pick that up, David? Rao Pell, welcome, man. How are you doing? good i think d just passed that over to david david's thought on change and exponential change everything that's going on within this contract i think it's interesting d just i'm not sure if you can hear but you keep cutting out of it i think we're working on d's connection right now hopefully he'll be able to rejoin in just a second um but why don't you go ahead uh ral i know uh you have a lot to say obviously on the face no i was going to pass him across to david first d pass it across to david that was his last thing so david are you there can you hear me yeah i can go i just think the the problem rowell is that d can't hear for some reason d can't hear ash so he can't hear ash's moderation but yeah i'm certainly happy to add add some thoughts to that i mean i would echo the the thoughts we've heard so far i think you know my my picture from 50 000 feet um as you ask for, Ash, is, look, I think we've lived for a few decades inside what you might call a liberal fantasy that we can progress towards a world that is free from conflict.

16:35We can progress towards some kind of universal shared liberal nirvana, and that in fact technology will help us progress to that universal shared conflict-free utopia where we all agree on the best condition for our collective lives and the right way to go about organising our society. We're getting some very hard lessons now in how that is just never the case. It never has been the case in human history. And it just won't ever be. Humans are just too complex, too variegated, too contradictory to ever settle on one agreed form of life. And technology, if anything, only sort of accentuates those tendencies.

17:20The most powerful force on the planet is about to be super intelligence. And the huge question is, and it's a very destabilizing question, who gets there first and what kind of superintelligence do they build and what values and what forms of life and forms of thinking is sort of instantiated and manifested in that superintelligence. And we're going to have a global race, a kind of arms race or a new kind of arms race to get there. And look, this is where geopolitics comes in. And I know we're here to talk about that partly. that race will depend upon compute power. One of the big stories we read about in the last few days is Biden finally signing this act saying you can't invest in Chinese AI companies, Chinese chip makers.

18:15He just wants to make it much harder for China to get there first. That's going to be a huge new nexus of conflict. We're all kind of obsessed with two movies right now. One's about Barbie ones about the race to the atom bomb. We're about to we're having a race to super intelligence. It has profound geopolitical consequences. It's a nexus of conflict, obviously absolutely fascinating for someone like me, but huge and sometimes scary implications. That is, I guess, a part, a big part of my view from 50 ,000 feet. Back to you, Ash. That's so well said. And thank you so much for giving us that context.

18:55And I think that very much captures the spirit of the moment that we're in right now. Let me just test the connection real quick. Dee, can you hear me? I still think Dee's having some challenging. Go ahead, Ralph. I'll go, Ash. So I want to tie together a lot of what everybody's saying and simplify it down. We are going through one of the fastest, most uncertain periods of change in all human history. and this is not going to stop and it's driven by the multipolar world and the competition that has developed within it and as David said it's it's for compute it's for oil it's for data it's for control it's for so many things and it's all happening at the same time that we are having to deal with a breakdown of the of de-cover this at length a lot in a world on a brink which was the multi-part documentary series he made for us at real vision which is mind-blowing and a lot of this is like not only is the institutional infrastructure of the world changing we're losing faith in the institutions and we will end up rebuilding them but we've got this pace of technology changing where suddenly humans are not the only people who possess knowledge which is something David's talked about to the very system of money itself.

20:22And all of these things are happening. And, you know, I throw in if we want to add in scare stories, but also inspiring stories because that all of these things are inspiring and scary is what our nation state is going to do with, with gene editing and AI. What's going to happen when quantum computing, all of these are coming, not like 20 years time they're all coming over the next five to ten years so the scale of change that humanity is going to have to deal with is going to be really really hard because these are all exponentials as well they're not just a subtle general change where some superpower takes some extra space in the world that's not what we're dealing with here every single fabric of our lives are changing how we operate how we talk to each other how we communicate how we move around how we process information everything is changing so at a very macro level what a time to be alive terrifying and exciting all at the same time what do you see some of the potential upsides being wrong d here um hey d hey how are you good good to hear you good to hear you always So I would say that there is another level of, you know, mega change that we're facing.

21:40And it has to do with the environment. And I know people have lots of different ideas about climate change, but we haven't seen entire towns and villages and even cities burned down until very recently. There was one in Canada a couple of years ago, much smaller than Lahaina, that was an important city. And, you know, these sorts of things that are highly unexpected are also going to impact this concatenation, whatever word you want to use, of change that we're facing. And, you know, the resource question that is driven both by resource availability and also by conflict, food, all of these things are another element that's in addition to the kinds of things that you mentioned, which are all absolutely there.

22:35And I think that, you know, I would go back, I don't know if you could hear what I was saying, but I think that social fragmentation and disintegration that we're seeing is partly a consequence of the rapid level of change and the emotional instability that it causes in people. And that then reflects in the choices they make in terms of markets, in terms of geopolitics, in terms of all of these factors. So it's like a feedback, it's like a massive feedback loop. yeah that's slightly scary slightly yeah ral do you see any potential upside uh to all this stuff that we're seeing i mean i know that you are very positive and very constructive about the potential role of ai gene editing uh you know quantum computing superconductivity that sort of always threatens to be breaking out but doesn't i know you're very bullish and very constructive on a lot of these technologies hey everyone we're gonna take another quick break and hear a word from our partners and then we'll be right back.

23:42Look I'm very bullish on all of it and what it could mean for mankind but change is what the hard part is and how we navigate that change. If it makes us super productive human beings and gives us more free time and does a bunch of things okay that's interesting but also as Dee says these kind of frictions what it creates for people is hard. So it is going to be a very scary time. I think in the end, it comes like everything with good things and bad things. Good things is humans will live longer, humans will live healthier, humans can be more productive, they might have more free time, they'll be able to do things that we've never been deemed possible before.

24:22I mean, if you lower the cost of energy and increase productivity by AI and quantum computing, it's a completely different world what is possible is extraordinary d do you mind putting yourself on mute um so i think that is an extraordinary world but the downside is dealing with change the potential for conflict we're already seeing it all of that it's it's it's it's going to be volatile it's there's no other way around it but and you know how far ai goes i mean david and i have talked a long time about, you know, do we get to some sort of singularity event? Where does that lead to? You know, what happens if you have energy costs that are massively cheaper and compute massively cheaper and massively faster?

25:10What happens to AI and what happens, how do humanity fit into that? You know, the robots too. So there's a lot to be excited about, a lot to be terrified about. It is what it is. We just have to deal with it. David, what are you? Could I jump in? This is Brent. Could I jump something on the tail of that? So, you know, I think as I set up at the beginning, you know, I see the world as a very precarious place. But I would also encourage everyone not to be too overly super bearish. And while I definitely lean in that direction, I also think it's important to understand that it might not go that way, right?

25:53Because of these advancements and, you know, AI and, you know, the potential growth aspects from it. And if we can potentially get some kind of a new energy source or transportation system that, you know, revolutionizes the efficiency and the cost and all that kind of stuff, it could actually be very good, right? Yeah, I'm kind of that way around. I think humanity figures out the complexity. It's just going to be a bit messy en route. Well, so it's funny because I hadn't really thought of the whole Barbie and Oppenheimer thing and how it so perfectly kind of reflects the real world right now. Right.

26:39It's like art imitating life. On the one hand, it's the age of, you know, celebrity and social media and being famous for being famous and very, you know, all a bunch of fluff. but then on the other hand you know we do have this new technology that could revolutionize things and push the world forward but could also blow the place up right and it's that that's exactly kind of what barbie and oppenheimer is about but but i guess the point i would i wanted to make is that even though all this stuff is very scary and even though i tend to believe that we are going to have some kind of a crisis as we go through this fourth turning right that kind of encapsulate all of this.

27:19I don't think that you can also just move to the sidelines, you know, move to a mountaintop in Montana and come back in 10 years, because I literally think the world might pass you by in those 10 years. And the world you come back to 10 years from now may look radically different. And potentially, again, this is not necessarily my core stance, but potentially radically better. Right. And so I don't think you bet everything on the crisis. I think you're prepared for the crisis. I think you understand the factors that could cause it to happen and, you know, have some protection in case it does. But, you know, there's it could go the other way, I guess, is the point that I would encourage everybody to keep an open mind to.

28:06David, which way do you think it goes? Yeah, I fundamentally am optimistic that, as I think you are, Raoul, that we find ways through what is going to be, along some dimensions, a terrifically turbulent, difficult set of transformations. I mean, like you said, we have a constellation of technologies emerging that are going to sort of smash us into multiple exponential changes all at once. And so much of it, you know, as we've talked about endlessly and I've written about in GMI, is underlain by intelligence, by the abundance of a new form of intelligence. And that is machine intelligence. And it's just going to be transformational in ways that we find very difficult to understand at the moment.

29:00I think we're going to see value creation, the like of which we've never seen across the last two, three decades. I mean, like you said, AI is going to be just this sort of deflationary mega bomb across the economy. It's going to enable productivity gains or it's likely to enable productivity gains that are absolutely astounding. you know and we're going to start to see that play out across for example as you mentioned the life sciences you know we're starting to see that soon and perhaps we'll get a chance to talk about that later but it's going to create a wave of social and geopolitical fractiousness and destabilization that we're going to have to contend with i suspect some form of crisis event will come of that.

29:45But we're just wonderfully adaptable creatures, and we'll find a way to adapt. And the promise in sight is of a world that is for billions of people, just radically better. I mean, you know, as we've talked about, Raoul, what can we do when the marginal cost of electricity is essentially zero? You know, we can build that world, endless, pretty much infinite clean energy what can we do with that um these are huge questions there's going to be a period of instability but i think we get to the other side of it with a world that that is much better for most people yeah d what do you think do you think this is a positive negative how do you navigate this you know i i see it as both um i i certainly don't discount what david's saying as a possibility.

30:43But I also would caution about the number of things that can go wrong. You know, there are some people like Pippa Malmgren, who also does a lot with Real Vision, who believe World War III has already begun. And I think that there's a possibility that that's correct. We don't see the conflict in Ukraine, for example, as winding down. We don't see the the potential conflicts between the U.S. and China and between the U.S. and its allies in East Asia and China winding down. We see the opposite. And I think that that, you know, we're in this period of of global split. Which is very dangerous because it brings back the politics of balance of power.