Newsletter Archive

How Medium is finding a new path in media economics, how Kristoffer Tjalve is rebuilding the "poetic web', and five recommended readings for the weekend.

One of the key lessons of Riskgaming is that it’s not nearly enough to inform people about complex and technical issues, since the underlying negotiations between different parties are ultimately what constructs the final outcome. Why can some parties extract their rents, and others either don’t, won’t or can’t?

Lots of Lux Recommends and three podcasts for the lengthy holiday weekend.

The debate boiled down to economics and systems versus culture and philosophy. Do rational incentives win, or will students and new workers choose a different course even if it means giving up a bump in salary or the comfort of an air-conditioned albeit stale cubicle?

As the U.S. and China continue to saber rattle in the South China Sea and in other regions, it is imperative that the U.S. starts to take the necessary economic security measures to better insulate the American economy from a future crisis or conflict.

LLMs will dominate the administration of more and more of the world, and it’s a recurring pattern of history that local and regional languages are ultimately subsumed by dominant administrative languages.

Unfortunately, a patchwork of small niches doesn’t construct an advanced economy anymore than a startup can hope to cobble together a dozen products into a competitive business. To succeed at scale means finding large niches and conquering them.

Having just spent two weeks in Taipei, I witnessed the mass protests currently underway across the city in opposition to controversial legislation that was ultimately passed by the Legislative Yuan

I’m on vacation the next week and a half in the Republic of China.

The primary focus was a series of loose, unconference-style breakout sessions, offering Lux’s leaders the chance to strategize and plan with their peers across the Lux portfolio.

In an era defined by social media, political polarization, insatiable consumerism and instant gratification, could we ever make the same sacrifices as the fittingly-titled greatest generation did?

The Great Talent Dividend is rapidly changing the geographies and companies that are demanded by employees. Adapt, and gain the future. Or ignore the change at your peril.

With riskgaming, I wanted to build a unique experience from the ground up that took advantage of the best practices from the defense strategy world while opening these experiences up to the wide range of leaders that Lux engages with at the intersection of science, business and policy.

President Joe Biden rolled out as extensive a red carpet as the U.S. can possibly offer to a foreign leader to Japanese Prime Minister Fumio Kishida.

For countries like India, which desperately needs hundreds of millions of middle-class jobs, AI is an employment disaster in the making. Workforce analysts have identified outsourcing in service markets like call centers, data entry, business process automation and broader IT support as among the industries most likely to be replaced by AI in the next few years.

Right now, there are thousands of children dreaming about the potential of artificial intelligence, learning and thinking and building the future here and wanting to be part of one of the great transformational epochs that humanity has ever produced. Why would we want to do anything that might dampen that curiosity and passion through laws that force these children to log off and … do something else?

Rather than focusing on censoring AI models, we should be fortifying our efforts on biodefense.

These “sigma narratives” take advantage of normal accidents multiple standard deviations away from the median, challenging editors to choose between offering readers the latest thrilling update or offering a more accurate view of a system.

There is a values tradeoff between freedom of speech and market exchange as well as national security. Technology has a way of creating dilemmas, and we are utterly failing to take those dilemmas head on and own our own destiny.

The global policeman suddenly had a far larger and more sophisticated band of criminals to thwart. Yet, the way in which America conducts its foreign policy has not changed.

Today, not a single city in America or Canada has a world-class subway system, although New York’s is certainly among the most extensive. What went wrong?

The occasional megaproject — well-designed, well-planned and well-executed — has the ability to transform our lives for the better.

Journalists and media critics have been shrill about the deleterious state of media economics, and that alarm is deserved: quality journalism is extraordinarily hard to do in the best of circumstances and now it is no longer viable.

All of this optimistic speculation can make one delirious at possibility, and so it’s helpful every once in a while to take a step back from the speculative frontiers and instead examine our known reality.

The upshot of network effects is the density of talent; the downside is groupthink, of too many people watching the same presentations at the same conferences and coming away convinced on a single approach to the future.

Eig manages to turn the textbook icon back into a man, reminding us all that even the greatest historical figures do indeed walk amongst us — if often ahead of us.

The single most important ingredient to a region’s economic success is the talent of the people who choose to reside there

AI was a recurring theme this year, as was international relations and the rise (and more specifically, falls) of the United Kingdom and Canada. But if there was one thread tying “Securities” together this year, it was employment, jobs and the meaning of work.

2024 is shaping up to be a year in which the history has already in some ways been written. The seeds of the past are germinating into a world-altering, globe-spanning epochal year.

Canada is now nestled next to a revisionist Russia, which is bulking up its presence in the Arctic by reopening previously shuttered Soviet bases while also modernizing its navy and undertaking military drills in the region. Eight of Russia’s eleven submarines carrying long-range nuclear weapons are thought to be based in the Arctic.

The passing of both men is a sad bookend to a century of achievement, but it’s also an opening for new intellects to build or dismantle their stances and legacies as appropriate. Finance and foreign policy will never be the same.

Fire is destructive, but it is also the fuel for the wick that lights our dinner tables and illuminates humanity’s best path forward. Cherish the present and aspire toward the future.

BRICS is hardly alone, for there is an alphabet soup of international pseudo-organizations and confabs (IPEF, APEC, G20, AU, RCEP, SCO, and CTSO come to mind) which do nothing more than have world leaders rub shoulders, engage in a photo op and argue over the wording of a closing memorandum no country will abide by anyway.

Regulators want to kill the future of artificial intelligence. That’s my only conclusion after a blistering week of global regulatory attacks.

Each problem is a palimpsest of the human impulse to fix, layers upon layers of solutions that couldn’t quite reach the finish line.

If India and China see each other as systemic rivals both regionally and globally, then bluntly, how could they possibly coordinate in a group meant to counter Western hegemony?

Acts that erase innocent human lives — and their unwritten futures — unjustly bludgeon individuals into a blur of indiscriminate group identity.

For all the focus on the group’s future, what is profoundly interesting is its past. Wagner’s history and relationship with its chief sponsor, Russia, can explain how both the state and the non-state will transform in the years ahead.

It’s always a special time when we can rendezvous a frenetically busy and large team all in one space — and what a glorious space it was in Utah.

Technology and globalization have tightly coupled the world, and the barriers between nations have become more porous than ever. Secure sovereignty is now much harder to defend and protect, and incursions are becoming ever more commonplace.

Abundance trumps scarcity when it comes to economic competition, and yet, America exclusively focuses on the latter rather than the former.

We debate how to handle systemic change endlessly, exhaustingly, and in the end, only galvanize ourselves for action when all other paths have been excluded.

And make sure to consume all the good stuff before the Burning Man folks return.

Unlike most threats that America’s armed forces confront, pandemics are undirected, exponentially growing, and require vast coordination across bureaucratic and national borders as well as civilian and military leaders to combat.

Prices are up, demand is up, buildings are going up — even as the president is going down, infamous alums and former residents are locked down in prison, and sports teams are locked out.

The United States has repeatedly ushered out its technological edge for a financial one, only to find that dollars can’t replace critical materials in times of need. Power is defined by power, and it’s time to put our energy back into rebuilding the national elements of power.

America’s curse is that even as it piously prays to the priests of financial capital, it regularly engages in flights of fancy freighted with fiscal illogic.

If we are to celebrate American entrepreneurs at the cutting edge, Congress must support long-horizon science, help bridge the world’s genius to America and vice versa, and defend America’s values from foreign interference.

The United States is a post-industrial economy that desperately needs an industrial policy to revitalize it. That requires us to rebuild our collective memory around past successful government interventions, rebuild the wealth engine in our intellectual culture, and move past the short-term rent-seeking of vulture capitalism to long-term and broad wealth creation.

America faces a complex labor crisis, one that is challenging to faithfully characterize let alone solve. Let me offer three striking snapshots.

When does the Special Relationship transform into the kind of “special relationship” you have with a wayward uncle whose antics, self-destructive habits and hankering for the limelight finally force you to back away from family functions?

When it comes to reaching for new heights, America has been a striver since its very founding. Now, as the space economy reaches a new apogee, a critical question remains: Will America Make It?

This ghastly story of the rise and explosive fall of the ebike in New York City is a parable of America’s febrile strategy on consumer protection and technology, as well as the expensive economic consequences that our milquetoast approach costs.

The natural world is relatively stable for all of its dynamism and diversity, but the same cannot be said of humanity. Social, political and economic evolution does not take eons, and change can happen with thunderous alacrity.

The great corporate productivity hope for AI is that a series of tasks that formerly took busybodies several hours to do through email and enterprise systems of record could be effortlessly finished in seconds by an intelligent bot. But what if the efficiency here was less valuable for corporate productivity, and actually much more useful for labor organizing?

The AI performance envelope between dollars invested and quality of model trained is a huge area of debate for the trajectory of the field (and was the most important theme to emanate from Lux's AI Summit). And it’s absolutely vital to understand, since where the efficiency story ends up will determine the sustained market structure of the AI industry.

Having the right physical capital though isn’t enough to protect these industries, and so now governments are increasingly turning toward their next challenge: strategic minds. How do governments gain sovereign control over their best brains?

The whole Lux partnership was in Miami this past week for Miami Tech Week as well as a strategic offsite. There’s nothing quite like escaping the tedium of 280/101 traffic for the West Coasters and the L train for the New Yorkers to triangulate on a bunch of new themes and initiatives for the coming year.

Even as the media industry has transitioned away from the attention-driven models of last decade’s digital media economy, there have been huge bumps in the path to the supposedly new world.

If futureforming then was about unleashing knowledge, then futureforming for what’s coming starts with ourselves: how do we cultivate our own sensibilities and reasoning to sift the knowledge that’s constantly thrown our way? How do we develop a moral core to be able to stand amidst chaos and act as a radiant lighthouse guiding the decade ahead?

Development of artificial intelligence appears to be an obvious arms race. Hackers use AI to crack computer systems, and so we need better AI cybersecurity to fight back. Computational propagandists will generate endless synthetic deepfakes, forcing us to build resilient AI systems to identify this junk and flush it out of our social systems.

These analyses are illuminating, but they evade how “work” actually works: the questions of who gets to do which work and how they get to do it. The answers to these questions are rarely determined by emerging technologies or even at times economics, but are rather determined by the power of individual guilds and professions to control monopolies over work in a field.

Ignoring Chew’s vetted obfuscations and evasions as well as the committee’s expected grandstanding, TikTok offers an excellent Rorschach test for many prime themes in tech and politics today. Is the concern about China and foreign influence over youth? Is it about protecting American industry from foreign competition? Is it about data privacy, a perennial issue around social media hardly unique to TikTok?

Without trust, communities can rapidly disintegrate in moments of tension. Neighbors turn on neighbors, seeking to right past wrongs in a moment of chaos. Without action, that utopian momentum described by Solnit’s interlocutors may never start, and instead devolve into blame and argumentation.

America disemboweled its own industrial base, a dishonorable yet intentional seppuku of the economic dreams of the middle class and the long-term strategic competitiveness of the nation. Now after decades of watching jobs swim far away from American shores and factories rise overseas, there’s momentum to at least act like that matters.

The quandary for the creative class is this: how much of the work that the millions of global “creatives” do is original? Here’s an uncomfortable and elitist point of view: very, very little.

Here we have our first strategic dilemma: the country obnoxiously flying a spy balloon over America is also one that buys more than $150 billion worth of our goods, and also sells us more than $500 billion worth of useful and competitive products. Scaling back trade ties would most significantly harm U.S. farmers, who rely on the appetites of China’s 1.4 billion people for their profits.

If the story of civilization is the mastery of the four elements of earth, fire, air and water, then the story of modern life is the miraculously thin line between mobilized states and chaos. Entropy is ever present, maintenance is a daily necessity, and the only thing holding all of us together is our ability to connect with each other, build community and governance, and labor on the project of keeping all of this (swings hand all around) operational.

Wargaming has been a critical practice for military experts and field armies to encounter, contextualize, understand, and ultimately command complex defense issues. Unlike think tank memos or nonfiction books, the goal of a well-designed wargame isn’t to convey statistics or make recommendations, but rather to transform participants into experienced leaders with a deep appreciation for the tradeoffs and limits that a scenario forces on its players.

We published 42 “Securities” newsletters, and another dozen or so stories for Lux’s website, plus a total of 37 podcast episodes. Here's a rewind of our favorites.

One of Lux’s highest priority goals for 2022 was getting our community out of the collective, Covid-induced malaise of Zoom squares into a more convivial environment. And that’s exactly what we did last week with the Lux Leaders Summit, a two-day urban “retreat” for a Dunbar’s number (150) of our founders and senior executives from industry to connect and collaborate.

There is a yawning gap between what science education can be and what is actually delivered in most classrooms. The sciences should be endeavors of wondrous discovery and curiosity that inculcate a deep empathy for the laws and theories that hold our tenuous world together.

There’s been so much chatter about tactical nuclear weapons, but not nearly enough analysis on exactly how and why Russia might use such weapons. Even if you remove the risk of triggering global thermonuclear war, the battlefield utility of small nuclear weapons is limited.

When it comes to maintaining the systems of civilization, America remains mired in a destruction-rebuild cycle. Though not typically as dramatic as a hurricane or say the collapse of the 35W bridge in Minneapolis in 2007, the quiet failures of public works can send populations reeling, whether it’s an electric grid breaking, a sewage system blocked, roads torn asunder from weather, or tracks that can’t support train loads anymore.

The world is not a well-manicured system anymore, with abstractions that allow individuals to understand their part of the whole without glimpsing the immense edifice of it all.

The planet itself is the threat, but it is also the source of life for humanity, a dichotomy that we are still learning to grapple with. So what role do the armed services have to play in this new security environment?

Risks are multiplying for all companies and in all domains, from financial risks and supply chain disruptions to climate catastrophes and pandemic-induced workforce debilitation. Ditto for security: the digital attacks on computer infrastructure, physical attacks on employees, and disinformation attacks on brands and reputation have combined to create an almost infinite ‘threat matrix’ of daily terrors.

One of Lux’s portfolio companies got national attention this week as our themes of science, technology and geopolitics collided in one of the most challenging strategic environments in the world.

Perhaps one of this century’s greatest delights is happening upon a party guest that has read, listened, watched, or thought about anything in common with one’s self.

Reputations are always a trailing indicator of truth. When people and organizations are rising, reputations obviously lag — the public has never heard of these new upstarts, and its opinion remains unformed.

Enter Column. The company transforms what is often a challenging experience for both public notice issuers and publishers into a much more delightful and easy process.

We produce more research papers than ever, but the speed of new discoveries has never been slower in the modern era. We produce more content than ever before, and yet, there’s no edifying culture emanating from that work.

For reigning chip leader Intel, how did the sudden passage of the bill affect its valuation? Well, it plunged, because on the very day that the House sent the text to President Joe Biden for his signature, Intel announced perilously bad Q2 earnings, with an EPS of 29 cents compared to an analyst consensus of 69 cents.

Colloquially, risk and uncertainty are synonyms, and it’s a misidentification that has caused trillions of dollars of damage and is increasingly at the root of modern “securities.”

Witnessing these photos is a transcendent experience, but one deeply embedded in the fabric of humanity. In an era mostly bereft of spirituality, the Webb’s photos recontextualize each of us into the grand narrative of our species, our planet, and the universe.

Yet, the winter of our discontent has not been made a glorious summer. Quite the opposite — the eerie quiet of venture the past few weeks has been punctuated by a great morass of global macro disturbance.

It’s been a brutal year for America and the world on every front, so do take a relaxing respite from the chaos this holiday weekend.

We’re living in a moment of tremendous hope across the sciences, where science fiction seems increasingly on the verge of science fact.

In a peculiar harmony though, the United States and China are implementing policies to shrink potential exits, diminishing the rewards of entrepreneurship and ultimately thinning the potential innovation their dynamic markets create.

Tetlock’s central thesis, based on extensive laboratory data, is that specialization, education, and depth of knowledge does not lead to better political forecasting. In fact, a generalist who regularly reads a quality set of news sources is often much more likely to correctly predict the future than a specialist.

ESG — or ”Environmental, Social, and Governance” — is … well, it’s complicated. It’s a combination movement, investment thesis, framework, and slogan that’s meant to direct risk capital to opportunities that are … better.

This weekend, all of us here at Lux are taking a moment to reflect.

Anyone who has followed the markets the past few months has had to come to terms with a simple notion: the markets have no idea what anything is worth right now.

With risks intensifying and rapidly mutating, the emphasis shifts to our ability to perceive these risks and make good decisions under uncertainty.

There’s just an incredible number of big news stories this week, and I am going to get to some of them. But I don’t want to overlook one of the most distinguished stories that sort of wafted past the attention of most of us as the markets vigorously gyrated this week.

The half life of software viability can be sometimes as short as hours for those in quantitative financial trading. There are roads built by Romans that are still functional today.

The United States has been unrivaled in global media for decades, driven by Hollywood’s outsized budgets and quality storytelling. That hold is still strong, but looking less durable, particularly in emerging markets.

Industrial CT scanners can easily reach into the millions of dollars, and that’s before the specialized labor for operating this equipment is included. This isn’t a capability that a company can just grab off the shelf and place on the assembly line, but rather a long-term capital investment that requires extensive planning.

The specter of the color revolution has never quite left the minds of authoritarian leaders, and both Russia and China have made reducing their incidence core to their executive programs.

There is an optimistic interpretation though, which is that the world really will show up if you build something new and important. Here, the lens moves away from customers, markets and trendlines to something much more qualitative.