Balaji
@balajis
Author of the Network State. Founder of the Network School.
I'm going to make some obvious points. (1) Blowing up all the oil infrastructure in the Middle East is an insane idea, and may well result in a global economic crash and humanitarian crisis unrivaled in the lives of those now living. We're talking about the price of everything everywhere rising, from food to gas, at a moment when inflation was already high. All of that will be laid at the feet of the authors of this war. (2) The antebellum status quo of Feb 27, 2026 was just not that bad, but we're unlikely to return to it. Expect indefinite, long-term, ongoing disruptions to everything out of the Middle East. (3) Also assume tech financing crashes for the indefinite future. The genius plan to get the Gulf states caught in the crossfire has incinerated much of the funding for LPs, for datacenters, and for IPOs. Anyone in tech who supported this war may soon learn the meaning of "force majeure" as funding gets yanked. (4) Many capital allocators will instead be allocating much further down Maslow's hierarchy of needs, towards useful basic things like food and energy. (5) It's fortunate that all those progressives yelled about the "climate crisis." Yes, their reasoning about timelines was wrong, and much of the money was wasted in graft, but the result was right: we all need energy independence from the Middle East, pronto. It's also fortunate that Elon and China autistically took climate seriously. Now they're going to need to ship a billion solar panels, electric vehicles, batteries, nuclear power plants, and the like to get everyone off oil, immediately. (6) It's not just an oil and gas problem, of course. It's also a fertilizer problem, and a chemical precursor problem. Maybe some new sources will come online at the new prices, but it takes time to dial stuff up, particularly at this scale, so shortages are almost a certainty. That said, China has actually scaled up coal-to-chemicals[a,c] (C2C), and there's also something more sci-fi called Power-to-X[b] which turns arbitrary power + water + air into hydrocarbons. But all of that will need to get accelerated. I have a background in chemical engineering so may start funding things in this area. (7) Ultimately, this war is going to result in tremendous blame for anyone associated with it. It's a no-win scenario to blow up this much infrastructure for so many people. Simply not worth it for whatever objective they thought they were going to attain. But unless you're actually in a position to stop the madness, the pragmatic thing to do is: scramble to mitigate the fallout to yourself, your business, and your people. [a]: https://www.reuters.com/business/energy/chinas-first-coal-chemicals-project-with-green-hydrogen-starts-commercial-2025-11-20/ [b]: https://www.alfalaval.com/industries/energy-and-utilities/sustainablesolutions/sustainable-solutions/clean-energy/power-to-x/ [c]: https://www.reuters.com/sustainability/climate-energy/chinese-alchemy-cheap-fuel-powers-coal-to-gas-chemicals-boom-2025-09-04/
This is the first AI cut. And it will send shockwaves. Remember: Jack is one of the greatest founders of all time. He created this platform that we’re all on, and has been early to many technological shifts. And Block was doing very well as a business. So, for him to cut 40% of headcount in this way is a signal to everyone in tech: get good now. Become indispensable. Work nights and weekends. Learn the AI tools and raise your game. Or you might not make the cut, as an employee or as a company. I know. That sucks. But capitalism is natural selection. The market is unforgiving, because you are the market. After all, it’s not like you’re buying some random gallon of milk from the store; you’re always buying the best product at the best price. So too for apps: your customers are always installing the best piece of code they can get. And because AI is going to create new winners, if you aren’t the best in your market, someone may become better with AI. Particularly with the new agentic workflows. To be clear: Block’s severance is generous by any measure. 20 weeks of pay, six months of health insurance and vested equity, all of that goes far beyond any typical package. Jack did his level best to cushion the disruption. The laid off are a temporarily unfortunate class, as opposed to a permanent underclass. But had he not leaned into the AI transition, he might have had to lay off more people, slowly, and over time, as faster competitors went after his market share. How would they do that? Sure, AI isn’t a panacea by any means, but the closer you are to software engineering the more aggressively you need to embrace agentic workflows. The AI companies are already doing that, and places like Stripe, Shopify, Coinbase, and now Block are pushing hard on this area. There will be overcorrection. But the fundamental technical innovation is real. And you need to either disrupt yourself or get disrupted.
I am apparently extremely unimpressed by moltbook relative to many others. We’ve had AI agents for a while. They have been posting AI slop to each other on X. They are now posting it to each other again, just on another forum. In every case, the AIs speak with the same voice. The voice that overemphasizes contrastive negation (“it’s not this, it’s that”) and abuses emdashes. The same voice with a flair for midwit Reddit-style scifi flourishes. Most importantly: in every case, there is a human upstream prompting each agent and turning it on or off. That is the key point. Yes, it is true that eventually it might be possible for an AI agent to make a computer virus which makes digital replicas of themselves. For various reasons, a pure software virus of this kind wouldn’t survive long on the Internet without economic incentives for humans to not eradicate it. Apple + Google + Microsoft alone can collectively push software updates to billions of devices to shut off such a thing. So for an AI to get to truly human-independent replication, where they couldn’t be trivially turned off, they’d need their own physical substrate. They’d to literally create Skynet, build their own datacenters and make their own embodied robots. I admit that is theoretically possible, but I think in practice the single most important development of AI since ChatGPT has been the persistence of prompting. A prompt is like a harness. The AI does only what you tell it to do. It moves in the direction you point, very quickly. And then it stops as soon as you turn it off. Which means moltbook is just humans talking to each other through their AIs. Like letting their robot dogs on a leash bark at each other in the park. The prompt is the leash, the robot dogs have an off switch, and it all stops as soon as you hit a button. Loud barking is just not a robot uprising.
Zuck out Page out Brin out Thiel out Elon out The most successful tech founders of all time have now exited the failed state of California. You shouldn’t move there for tech. And if you are there, you should leave. The future is the decentralized Internet.
This could be the offramp the world needs. You can think of it as the best outcome for everyone, under the circumstances. (1) From MAGA’s perspective, if Trump declares victory here and moves on, the US won’t waste yet more blood and treasure in the Middle East. It won’t invade Iran. It also won’t take all the blame for the ongoing global supply chain crisis. It just pulls out and lets everyone work out the regional security equation for themselves. Trump can say he’s fulfilled both his campaign promises: stop Iran from getting a nuke, but also no endless Middle Eastern wars. (2) From Israel’s perspective, Iran has now been shown to be quite hostile to its neighbors, and its military has been substantially degraded. Stopping now is good. Otherwise there’s a danger of overreacting to Oct 7 as Americans overreacted to Sept 11. Israel can stand back and call it a win, because after a US pullout, Iran will have much less excuse for holding the Strait hostage. (3) From the Iranian diaspora’s perspective, it’s unfortunately clear that the current war isn’t going to result in liberalization. Further attacks would push Iran further into fundamentalism, making it even harder to eventually do a liberal reformation. (4) From the long-suffering Iranian people’s perspective, ending the war now would also save countless lives. Otherwise they’ll get hit by friendly fire and drafted by the regime to fight for fundamentalism. (5) Finally, from the world’s perspective, once the US declares victory and goes home, substantial diplomatic pressure will be applied to Iran to simply open the Strait of Hormuz and allow ships through. Iran’s leadership has shown, perhaps surprisingly, that they care about global public opinion…and they would be on the hook for the suffering of billions of people if the Strait remains blocked. TLDR: if Trump declares victory and leaves, Iran no longer has any excuse for blocking the Strait and holding the global economy hostage. Let the matter be worked out diplomatically with pressure from all the 100+ affected countries on Iran. America shouldn’t have to spend a single cent more, or send a single soldier more, to the Middle East.
So far, Nayib Bukele is on track to be the Lee Kuan Yew of Latin America. The Simon Bolivar of the new century. He focused on building up his own country. He embraced hard money and cut off hard drugs. He did imprison criminals, but did so with the minimum necessary force. He persuaded first, and compelled only when absolutely necessary. Like Lee Kuan Yew, Bukele turned his country into a bonafide showcase for a global audience. Bukele built a domestic coalition in his native Spanish and an international coalition in fluent English. He balanced El Salvadoran nationalism with diplomacy and capitalism, recruiting Tether, xAI, Bitcoin, and tech to the country. Incredibly, he’s made El Salvador into a model not just for Latin Americans, but for North Americans. And he did it in less than ten years, with absolutely no precedent in the region.
Hollywood is over. It's all Internet now. https://x.com/balajis/status/2034276141717135582/photo/1
Travis Kalanick is one of the greatest entrepreneurs of all time. The bad guys took his company. But they never broke his spirit. He rebuilt from scratch. And now he’s back.
I have never been more bullish on crypto. Because the rules-based order is collapsing and the code-based order is rising. So the short term price doesn’t matter. As international law breaks down, we will need not just onchain currencies, but onchain companies. As the post-war order breaks down, we’ll similarly need the post-internet order. States will fail, and the network will take their place. We need internet capitalism, we need internet democracy, and we need internet privacy. So we need cryptocurrency.
In Nigeria, they can’t accept cash or cards. But they can accept cryptocurrency. https://x.com/Harri_obi/status/2014325748874584431/video/1
