Ep. 60: Int'l Spy of Infamy?
Hey FRs,
During the long holiday weekend, I hope you all ate a lot of food, took numerous naps, and managed to avoid any familial strife. ICYMI, on last week's episode, in addition to diving into new revelations about Jeffrey Epstein's geopolitical back-channeling and alleged ties to Israel, we also gave some advice on how to deal with the family time the holiday season inevitably entails. Which we all know can be wonderful...until it isn't.
Aside from holiday advice and the continually depressing Epstein saga, that keeps flaring up like herpes, we also talked about the heightening arms race in Europe, exploring why it's happening and what the repercussions might be for the rest of the world. Sounds like a bummer of a show but somehow FP Zaddy and T-Ceps found the jokes– just one more thing to be thankful for. 🙃
Seena's Corner
A Human Centipede Ring of Capitalism
There's something deliciously absurd about the current state of AI investing, and OpenAI showed us how nasty this AI Orgy Dome can be.
Here’s what happened and why I’m losing my mind over it. OpenAI just took an ownership stake in Thrive Holdings. Now, that might sound innocuous until you realize that Thrive is one of OpenAI's major investors. So we've got this beautiful circular arrangement where OpenAI is simultaneously funded by and investing in the same entity. It's like a financial human centipede, except with more venture capital and plenty of sh*t eating.
The Circular Investment Problem
Let's call this what it is: some light fraud that masquerades as good business. OpenAI isn't alone, they're joined by the usual suspects like Nvidia and other AI companies who are all doing these "circular deals." The logic, if you can call it that, goes something like this: these companies are building hardware and infrastructure for AI, so why wouldn't AI companies invest in them? GOOD BUSINESS.
On the surface, it almost makes sense. Nvidia might reasonably argue that they're constantly producing chips for OpenAI, they believe in the AI future, so investing in OpenAI seems logical. And OpenAI could make the same argument in reverse, they're dependent on this hardware ecosystem, so investing in it secures their supply chain. Everyone's invested in everyone else. Very cozy. Very concerning. Very dirty.
Conflict of Interest? What Conflict of Interest?
If you're investing in a company that's simultaneously investing in you, aren't you creating some rather obvious conflicts of interest? When OpenAI buys your product or service, is it because it's genuinely the best option, or because you have a vested interest in their success, and they in yours? Presumably you would want some oversight here, but that would impede innovation and we must beat China to AGI or we will all die… right?
The Bubble Question
Ok so now, the elephant watching in the corner of the Orgy Dome of Capitalism: is this a bubble? The circular investment patterns certainly have that distinctive bubble VIBE. When everyone's investing in everyone else, when the same money is just cycling through different corporate entities, when the fundamental question of "but is this actually generating value?" gets drowned out by the moans of capital ecstasy rushing in… it’s not a good sign…for us.
History suggests that when you can't tell whether companies are successful because they're creating real value or just because they're part of an elaborate game of financial three card monte, you're probably closer to a bubble than anyone wants to admit.
What This Means
The broader geopolitical angle here is worth considering: these circular investment structures are happening at a moment when AI infrastructure is becoming genuine strategic infrastructure. AI itself is not a bubble, but the kinky deals that OpenAI and others are making to inflate their value is almost certainly a bubble. Remember, crashes happen real slowly then all at once, kinda like… ok, I'm done with the orgy and human centipede metaphor. I’m off to take a shower.
Meanwhile in Ohio: What Travis is Reading ––
While we've covered the Trump Administration's overbearing and unnecessary immigration policies over the last few months, sometimes the stories hit even harder when they happen in your backyard– the story of Ayman Soliman out of Cincinnati is one such story that got national attention, led to arrests at protests over the Ohio River and, like much of ICE's activities across the country, led to needless chaos and detentions... After 73 days in a county jail in rural Ohio, Soliman is finally out and telling his story to such news outlets as States Newsroom. It's a story all Americans need to hear.
On the Next TFR...
We're digging into whatever the hell war crimes Hegseth is committing in Venezuela.
And, don't forget! We're compiling questions for the upcoming mailbag episode, so send us a topic you want us to cover at Theforeignreportlpn@gmail.com.