🔮 Sunday edition #528: Superintelligent states; thinking parrots; paywalls vs overviews; stochastic chips++

An insider's guide to AI and exponential technologies

Hi, it’s Azeem.

This week’s edition opens with a question that has gone from sci-fi to strategy: who’s ready for superintelligence? Sam Altman says a gentle takeoff has begun. I agree, but the gentleness of this singularity will depend on how quickly institutions, norms, and minds adapt.

From Apple’s quiet pivot toward ambient computing, to Gulf states reengineering their political economies for AI supremacy, to students offloading cognition onto ChatGPT -every system is under pressure to evolve. What fails to adapt, breaks. What adapts too late, loses relevance.

Here’s another Sunday edition to help you make sense of things.

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Who’s (not) ready for super intelligence

Sam Altman wrote about “The Gentle Singularity” earlier in the week, arguing that AI has already crossed an event horizon. He maintains the transition will feel manageable. I agree with Sam on the overall trajectory but the “gentleness” will depend on several factors. Unless institutions adapt, governance acts proactively and individuals reshape their cognitive models, the singularity will be jarring for many.

Marc Andreessen

, a leading VC investor, says his firm’s core thesis is simple: “Incumbents will be nuked; everything will be rebuilt.” In recent conversations with other top Silicon Valley investors, I’ve heard a similar refrain. A new consensus is forming: AI is a sufficiently general-purpose technology to disrupt, invert, and ultimately reinvent nearly every sector of the economy. I share this view. Based on my recent discussions with senior executives at dozens of public companies, I’m convinced that incumbents have not yet grasped the scale or imminence of what is coming. Many are sleepwalking into a series of Blockbuster–BlackBerry moments that will unfold over the next two decades.

Governments need to rise to the challenge. Policy analyst Ed de Minckwitz argues that existing state machinery—reactive, siloed, trained on yesterday’s problems—cannot withstand agentic, self-improving AGI. I proposed the same in my book Exponential four years ago. And in Will MacAskill’s “compressed century,” decades of change condense into a few years.

Some states are acting. Gulf countries are racing to refit institutions and grids. All the while, Europe remains stuck in pre-AI assumptions. Democracies, in particular, must guide voters through this upheaval, as non-democracies will not wait.

Making sense of Apple

Apple’s WWDC announcements left many underwhelmed, revealing how far behind the company is in the AI race. Apple’s new AI study published this week reinforces this positioning. They tested large reasoning models on classic puzzles, such as the Tower of Hanoi and River Crossing, finding that models often fail when solution steps exceed 100, even with the right algorithms. Many read this as confirmation that today’s AIs are mere pattern matches.

However, a closer look reveals that these breakdowns likely stem from architectural quirks – token-level noise, sampling instability, and an overemphasis on short-form confidence. o4-mini stunned mathematicians at Berkeley by cracking previously unpublished tier-4 FrontierMath proofs – problems that take human experts weeks. These networks can generate genuine insight, albeit through a cognitive architecture that may be alien to ours. The key takeaway of this paper is not in the result but in Apple’s role: it’s analyzing from the outside. Apple is observing limits that others are already working around – less a leader in capability, more a commentator with interface ambitions.

So can Apple stay relevant? The company’s new design language, the Liquid Glass is radical move toward ambient, post-phone computing. This could be Apple’s path to staying relevant and their unique, core strength – being the bridge into a new computing era where interfaces are no longer screens but intelligent agents embedded in our environment. I discussed this future at some length in my Friday live.

This is your brain on AI

An MIT-Media Lab study found that students using ChatGPT to draft essays showed significantly lower α- and β-band EEG connectivity (a proxy for task engagement) than those who wrote unaided, and ChatGPT users later struggled to recall or quote their own work. Generative tools reduce effort, but also offload memory and erode ownership of ideas. So how do we fix this? One answer may be intentional friction: adding pauses, confirmations or limits to restore agency and reduce overload. Designers are beginning to frame friction as a feature, not a flaw. In China, the response has been more blunt – Alibaba, Tencent and ByteDance disabled photo-recognition genAI features during college-entrance exams to prevent cheating. That protects evaluation, but not learning.

To blunt the temptation to “just hit generate,” we have to grade the process, not only the product. Require students to submit their prompts and drafts, defend revisions aloud and pass surprise, AI-free recall checks.

See also:

• Philosopher and literary critic, David Gunkel argues that LLMs collapse the old idea of an “author” while meaning migrates to the reader’s interpretation because text is no longer tied to a single originating mind.

Elsewhere

• Ray Dalio says the US is at Stage 5 in his disorder cycle—fiscal strain, value gaps, tech shocks—and one step from civil war unless reforms include everyone.

• Washington and Beijing have struck a temporary six month agreement that lets US automakers and manufacturers resume rare-earth imports from China.

• Meanwhile, Brussels is investing €9.5 million in Horizon iBot4CRMs, an AI-driven pilot program that strips neodymium, cobalt and gold from e-waste.

• OpenAI ARR hits $10 billion. Timely — while compute currently dominates the bill, each ChatGPT 4o query burns just 0.34 Wh (≈ 0.003¢ at US industrial rates) which means that a Plus subscriber must fire off over 400,000 prompts a month before electricity nibbles at the $20 fee.

• AI’s “move-fast” era is tilting toward a licensing-heavy phase that rewards firms with deep pockets and airtight provenance tools. Meta doubled Scale AI’s valuation with its $15 billion investment for 49%.

• AWS will cool 120 US facilities with reclaimed wastewater.

• Worldcoin will deploy “Orb” scanners in major UK cities this year, offering biometric proof-of-human credentials.

• Researchers have woven hair-thin tellurium wires into a flexible “solar panel” that slides under the retina to restore vision in mice and non-human primates.

Thanks for reading!

Azeem

P.S. Do follow me on my new YouTube channel.

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