So a lot of people have been saying that in a world where we reached AGI, money will no longer exist. For example, Elon Musk, he said that I think money disappears as a concept, honestly. And in more details, he said that it's kind of strange, but in a future where anyone can have anything, you no longer need money as a database for labor allocation. If AI and robotics are big enough to satisfy all human needs, then money is no longer necessary. Its relevance declines dramatically. And it's not only him. Sam Alultman also said, "It may be difficult to know what role money will play in a post AGI world." So, what does that even mean? Will my money be worth zero? How will we transition there? How long will it take? Like, are you saying that we'll reset everything like in Fight Club where they erase all debt and everyone starts from zero? That would be nice. I will need to pay my mortgage. So, to understand what they mean, let's think about what wealth really is. I'm going to argue that wealth in the end is just how much human labor is owed to you. Meaning, if I have $100,000, I could redeem it for $100,000 worth of labor. So, I'm going to use this tweet to explain. It's mostly his idea, not mine. So, the first thing he said is wealth is a claim on other people's time. He starts by saying that when he was a kid, he would um daydream about how awesome it would be if no one existed, right? So, he can basically take everything he wants and do whatever he wants. You could drive all the sports car you want, Lamborghinis, Ferraris, whatever. You can use other people's swimming pool cuz now it's yours. No one else lives there, right? So you basically own the whole planet and that makes you infinitely rich, right? Well, not really. Cuz when he got older, he realizes that actually it's the opposite of wealth because if no one exists, who will work to maintain all the infrastructure? Everything will collapse. For example, the gas for sports cars, chemicals for the pool, but more importantly, power plants that provide electricity for the fridge, farmers that grow tomatoes and raise hogs, the supply chains that bring you bananas and the coffees, the dentists who fill your cavities. It's all people and they will be all gone. And that means that you can't have any of those services. So that's not rich. That's not wealth at all. All right. So then he gives a more concrete example. in the world. Like imagine you have Dorito chips, right? This is not sponsored by the way. One of the ingredients of the delicious nacho cheese flavored tortilla chips that are very, very affordable. Sunflower oil is one ingredient that you need. Obviously, you need farmers to grow the sunflowers and then processing facilities to create the oil and the trains and the ships to get the sunflower oil to your country and trucks to get it to your grocery store and then the grocery store to sell it to you. So you have to pay all of those people, but that is actually only part of it because the farmer probably uses a tractor, right, to plow the field. So now you're including all the people that had to be involved to make that tractor and all the equipments to make that factory that creates that tractor, etc., etc. Those are a lot of a lot of people, right? And then now your tractor uses petroleum. Okay? So now all of the people who work upstream, mid-stream, downstream, oil and gas supply chains, you need all of them. And then also who built the ship, who made the engine for the ship, who built the GPS navigation, who is running the GPS satellites to guide the ship. It is a neverending chain, you know, and that is just sunflower oil. And then I'll do that for all the other ingredients. And there are so many people involved, millions and millions of people. I couldn't even figure out a way to draw this chart because anything I draw would be too simplified. But basically, it's thanks to millions of people who each played a small role across the planet to make it possible for you to have that much nacho flavor for only $3.29. That money technically gets distributed to all those millions of people involved. And then he says, I hope I have convinced you that everything around you, the goods you buy, the services you enjoy, the procedure that keeps you alive depends on the labor of other people all over the world, most of which you will never meet. Okay. Okay. So, what does that mean? Now, it's back to his thesis. He says that wealth is a claim on other people's time. So, in the end, what is wealth? Well, for many people, it's a simple answer, money in the bank. I mean, that's true. You can use the money to claim other people's time, but there are other ways of claiming other people's time. For example, if you're an exceptionally good-looking man or woman or famous actor, then you actually have the claim on other people's time because let's say Brad Pitt asked someone a favor, you'd probably do it for free. So that is wealth or the president of United States. Is the president wealthy in other people's time? Absolutely. I mean, the president creates policies that control billions and billions of people around the world. I mean, United States is the most powerful country right now. So, all the people listed like Jeff Bezos, Joe Biden, Brad Pitt, they all have wealth, but in their own separate ways. Okay. So, now we agree that wealth is basically just how much labor is owed to you. You know, you trade your money for product and services that require human labor to make. Okay. Now, so what does wealth look like in an AGI world? Well, we say we're going to reach AGI when AI robots can do can do everything a human can do but better. So, humans don't need to work anymore, right? So, what does that mean when humans don't need to work anymore? Well, the cost of labor will be zero because why would I hire a human? I could just ask a robot to do it because they do it way better, right? So, at this point, humans literally do not need to work anymore. You need a doctor. Just pay for the tokens to run the AI to give you your diagnosis, right? You want Doritos, just pay the compute. Farmers are all robots now. The tractors used to farm are built by robots. The headquarters of the manufacturing companies, the ships, the uh the petroleum stuff, it's all managed by robots. And you don't need to pay robots money. But you do need computing power and robot bodies to run that. Right? So as you can see this whole thing it's instead of humans now you're paying robots in terms of compute power or some raw materials. So the only things you'd need to pay for are the things that AGI cannot manifest out of thin air. So that's energy compute and physical space. Compute includes the intelligence like let's say we already have the models or whatever technology that we have but you still need the compute. So basically everything will become really cheap from high-end services like doctors and education to even like material goods like Lamborghinis will be extremely cheap since you're just paying for the compute cost and the raw materials. It's probably not going to be traditional money in a sense where you have to pay for these things but maybe some sort of compute credit to decide whose requests the global GPU clusters processes first. But who decides how much credit you get? I'll come back to that. But basically, everyone can have easy access to most things in the world for very, very cheap. And that's what they mean by money might not be a thing anymore. You're not going to lose your money, but things will just become so cheap that whether you were poor or you were rich, you'll both be able to get the same things in life because it's so cheap. There's already some areas that's like that and without even AI. For example, back then before the internet, calling someone long distance costed $3 to5 per minute. It's that expensive because there are so many people who needs to work to help you make that long-distance call. Remember a long time ago there's these like ladies inside a room and they would like manually switch certain things. I don't even know what they were doing, but they were called like analog copper wires, right? And they had people to maintain that physical infrastructure. You have to pay all of them. That's why it was so expensive. But now if the internet with cloud computing and advanced data compression, 4K videos, blah blah blah, it costs nearly zero dollars, right? We don't even charge you to make phone calls anymore. So another example is like music, right? Owning a,000 songs back then in 19 I don't know 85, you would have to spend over $10,000 on like vinyl, CDs, and stuff like that. But now technically, if we didn't have like IP and music labels, all that stuff, right? Technically, it's free to play the MP3 files on your computer and to replicate it and to send it to other people. It just costs electricity for your computer to run. So, theoretically, having AI replace the job force is a good thing because it will make everything in the world so cheap and so accessible. But here's the dark side of humankind. If everyone will be rich, then no one will be rich. It's the curse of being humans. You know, we just always want to be slightly richer than our neighbors. And and and the sad part is you might spend your whole life working hard to make money, sacrificing your youth and the days that you could have spent with your friends and then suddenly now everything is free. That's why you should quit your job now. Stop trying so hard to be successful. No, I'm kidding. I'm kidding. I Well, I don't I don't know. Maybe I'm kidding. Anyways, but the question is if you don't need to work anymore, what do you trade in exchange to get what you want from the army of robots? And who do you trade it with? Right? Back then you trade your labor for some money and that money is accepted by everyone. So who decides who gets the compute credits? So those are the rich people. So I kind of lied about if everyone is rich, no one's rich. That's not true. There's still a cost to all of this. Though very small, there is still a cost. And who do you pay? And what do you pay them with if your labor is no longer valuable? I I don't know. But all I know is that you will pay a very very very small group of people who own the intelligence, who own the raw materials, who own the compute, who own the land, who own the energy. But if everyone is free, how are they any richer even if they own all that? Well, the thing is they have power over you. They can just cut you off from all those services. So that is absolute wealth. They have the absolute wealth. They have the power over the whole population. So at this point, we maxed out the inequality gap, right? This is the highest the inequality can get. Like throughout history, the better the technology gets, the less we need human labor. And then this causes a bigger gap between the rich and the poor because you no longer need to distribute your wealth to other humans so that you can operate your business or whatever. Reaching AGI with a bunch of robot workers means that the owners will no longer need to distribute their wealth to any other humans. So this explains two things, right? Why Elon is trying to get to space so badly and also why Sam Alman can raise so much money even if the company is not profitable. So first with Elon basically to maintain your position in the world to make sure that you're on the rich side you must get on the other side of the AGI world right you don't want to be just a user of AGI you want to be the owner of all the infrastructure that allows for AGI so how do you do that if there's already so much competition on Earth then there's a finite amount of resources and the only way to win is to own your own energy your own compute and the physical go space and how do you do that? Well, for Elon Musk, he wants to go to space. So, there's a great interview from Dwesh and Tripe with Elon Musk about how he wants to put his data centers in space. And here are some of the quotes. Elon Musk said, "Solar power is roughly five times more effective in space because there is no atmosphere to block energy and no day and night cycle." So, that is how he'll own energy. If he builds the infra to capture the sun's power, he owns that energy. Right? And then next he said building massive data centers on earth is hindered by complex permitting and a flat growth rate in electrical output whereas space offers virtually unlimited scale. Right? So he's basically saying there's no one claiming the land on the moon or on Mars right now. So that's where he'll own land. He's saying that there's complex permitting on Earth. And the only reason why there's permitting is because he technically doesn't own it. The states own it or whoever I don't know or whoever runs the country or the land. And then finally, Elon is working on XAI, which is the compute and the intelligence that takes advantage of him owning the energy and him owning the land so that he can build data centers and leverage all of that raw material to make compute and intelligence. Okay. Now, let's look at Sam Altman. He's been able to raise a crazy amount of money, right? He recently raised a hundred billion dollars at a 850 billion valuation. How the hell does he do that? And then according to my very very deep research, Gemini, Open AI is definitely not profitable, right? It loses billions of dollars per year, but yet the valuation is insane and investors are willing to pay that premium for a piece of Open AI. Why is that? Well, that's the thing. If you're thinking about it in traditional economics, like how much profit this company is making, and then you give it a valuation based off of that, then of course these $850 billion valuations seem insane. But if you change your perspective, right, and think about uh the people who are not building AI, but who are rich, aka the investors, what do you think their survival strategy is for a post AGI world? The only thing that would allow them to not end up being on the po poor side of AGI is getting a big piece of the pie of the winner of AGI and they are willing to pay a heavy premium and they think that OpenAI can be that winner. So they better own a piece of it. They better be an owner of that. In some sense it's almost like asking how much money would you pay to get to heaven. Okay? So, I'm not saying that a normal person post AGI world is like being in hell, but maybe that's how these people would feel, right? They're like gh poor people like gh plebbeians, normal people. I would never want to be on that side, right? But they also don't have the skills or they don't have the right companies. They don't own the right things yet. They just have a lot of money right now. So, that's why they are willing to pay a lot of money even for a slim chance to not be on the wrong side of AGI. And again, I I've said it before, I said a million times, but the less we depend on human labor to create goods and services, the wider the inequality is, and the harder it is to get on the rich side of this inequality. And these people are willing to do anything to secure their spot, right? These are the same people who build bunkers around the world to make sure that if ever there's an apocalypse, they remain rich. And how do you remain rich in an apocalyptic world? you have a bunker with a bunch of guns and with a bunch of food because you can just take it from other people, right? It doesn't you know, money doesn't matter at this point. Anyways, so these are rich people's games and um you know, I I think I'm okay staying in my lane and just enjoying life, you know, and and maybe I should be enjoying life a bit more now, you know, in case that all my efforts to to gather wealth will be pointless. Anyways, that's it for today. Have a good one.