Payback’s a Bitch: AI Sovereign Wealth Funds, the Fake Andrew Keen, and America’s Inevitable Decline

00:00:38 Andrew Keen: Hello, everybody, and welcome. It's Saturday, 06/20/2026, and it has been one of those weeks where the machines quietly got more capable and the rest of us got a little more nervous about our own job descriptions. So — everybody, it isn't actually June 20. It's June 27. That was the show that Keith ran last week, fake featuring a fake Andrew Keen. So, Keith, that was a very realistic version of my voice. I've become redundant. You don't need me anymore, do you?

00:01:14 Keith Teare: Well, there's only one you, Andrew. And,

00:01:16 Andrew Keen: What clearly not only one me. You invented another one that's just as credible and probably more interesting.

00:01:23 Keith Teare: So everyone should know that Andrew was away last week, and I wasn't gonna do a video. And it suddenly occurred to me, you know, I've got a PC here that has an Nvidia card. I didn't use any third party service, actually. I just, said to it, look. Here's the last few. That was the weeks. Learn Andrew's voice. And, here's an image of him from YouTube. Animate Andrew, write a script based on this week's newsletter, and animate Andrew and me discussing it. And it took about half an hour and maybe three attempts because he wasn't very good the first time. But by after about an hour's work, that came out. And it was actually pretty it was pretty bad compared to our normal actual live shows, but it was, really good.

00:02:11 Andrew Keen: Well, when I heard it the first time, it sounded like myself. In fact, I second guessed myself. I thought maybe I really was there on June 20. But, anyway, I wasn't. Last week, you did a show on your own. This week, it's Saturday, June 27. The big news seemed to have happened yesterday, Keith. The Washington Post reports that the US government will decide who gets to use the latest AI technology. Commerce department apparently told both OpenAI and Anthropic that they needed their permission, about who was gonna get to use their latest models. Your editorial this week announces, payback's a bitch, baby. Of course, you blame everything on Dario, do you, Keith? Did he get does he finally get what he deserves?

00:02:58 Keith Teare: It's definitely not only Dario. It's, we've talked about the crisis of leadership in AI across, really the whole of AI. You know, the quality of the leadership is, questionable at best. And there's been a year now, more than a year, of all of the AI leaders at different times, crying wolf about how dangerous it's gonna become because they wanted to be wrapped in government clothing to prevent third parties being able to easily compete with them. In a way, the government provides a moat of protection against anyone else if you have to go through government in order to do something. And that's what they, you know, especially Dario, but not only Dario has wanted. It's now happened. And, now they're you know, I'm pretty sure they realize that what they've asked for isn't that really a good thing. They've given the government authority. And by the way, it's voluntary right now. There's no law, so they could ignore the government. Law has to be written or an executive order has to be written, and I do believe that is in process, but it hasn't happened yet.

00:04:13 Andrew Keen: Yeah. And your editorial says, the government is not merely getting involved in the conversation about AI. That's been true for years. No. The Frontier AI company has invited the government into the room, and now the government is beginning to behave as if it owns the door, the guest list, the schedule, and the product road map. In other words, the AI frontier companies like, Anthropic and open OpenAI wanted their cake and eat it, and, they didn't get to do either. They've had the cake taken away. I wonder, Keith, if we step back a little bit. We've talked about this theme before, whether we might think a little bit more structuring and see the convergence of the Chinese and American model. And, yeah, I'm you're probably right in the sense that Dario and Sam Altman aren't exactly the most mature of leaders, although they're tech people. They're not political people. But this was almost inevitable, particularly in the context of Trumpism.

00:05:14 Keith Teare: I don't think it was inevitable, actually. I think I think it's been set up. It became more and more likely, and now it's happened. I think it's pretty inevitable that it's the start of, a pretty onerous framework that they're gonna have to live within. You're right about the Chinese models. GLM 5.2 was released this week, which is, as good as Claude and is open source, open way. There are some people who fit it's a very big model and very capable, but it, there are some No.

00:05:50 Andrew Keen: No. Let me, maybe I didn't make myself clear enough. What I meant was we see the convergence of the American and Chinese models of capitalism more of a

00:05:58 Keith Teare: I see what you're saying.

00:05:59 Andrew Keen: A state centric model because, the Chinese model obviously involves the state much more explicitly and ambiguously and ashamedly, whereas America's always prided itself, in theory at least, as being free enterprise and trying to marginalize the government as much as possible. That, of course, hasn't always been the case with the invention of the Internet. Of course, much of it came from one kind of government initiative or another. The same is true of, atomic technology. But whether the real shift in the twenty first century economy is one towards a more state centric model.

00:06:40 Keith Teare: I think that, at that level, you're right. You know, all governments seek to control things that they consider, dangerous for themselves, frame the, you know, danger is framed in their own way, of course, in each case. But, in the case of AI models, they're they're afraid that it's so good that it could create bioweapons or, you know, cyber crimes. But the fact is they, you know, insofar as that's true, they can't really stop it. So, yes, there is this tendency towards the state taking more and more control. And I do believe economically, and when you start talking about distribution, you know, Bernie Sanders, sovereign wealth fund idea is the state taking, on behalf of the people, if you will, taking control of wealth and distribute

00:07:42 Andrew Keen: And you're not necessarily hostile to that. You see some potential. I mean, you may not be completely in the Bernie camp, but you recognize that has to be the way forward in some way or rather.

00:07:58 Keith Teare: Well, so yeah. One the minute you start thinking about society, there's only really three ways that it could go. The first is, you know, the rich get richer and, you know, jobs shrink as automation kicks in, and good luck to everyone else. Seems unlikely anyone's gonna allow that to happen. The second is the state playing a major role. Consensually, the rumors are that OpenAI has offered the government a very large stake in OpenAI, and

00:08:32 Andrew Keen: What would that mean? Ownership?

00:08:34 Keith Teare: Actual ownership of shares put into a sovereign wealth fund and then distributed to citizens as dividends.

00:08:43 Andrew Keen: When you say the rumors, is this among your VC friends in Silicon Valley? Have you read something? There's nothing in your newsletter.

00:08:51 Keith Teare: No. It's it's popped up in, on podcasts in conversations with people that should know.

00:08:59 Andrew Keen: Like who?

00:09:00 Keith Teare: David Sacks, for example.

00:09:02 Andrew Keen: Well, he certainly should know. So what's his response to that? Is he I would assume he's not keen on it.

00:09:07 Keith Teare: No. He's in favor of it. He's actually very in favor of it. He thinks that 50% ownership is too small.

00:09:15 Andrew Keen: So why would why would the OpenAI guys give away 50% of the company?

00:09:20 Keith Teare: Well, because

00:09:21 Andrew Keen: It Or does that actually involve giving away 50 I don't I don't quite know what it would involve from OpenAI's point of view.

00:09:27 Keith Teare: I think it I don't think we know the details. It could be anything between giving away and selling, initially. Who knows? It could be warrants. There's all kinds of mechanisms that could take place, and we don't know the percentages. So let's let's not pretend we do. But mechanically speaking, it's easy. What if everybody wants to do it, it's easy. And it really becomes a hybrid capitalism, where, you know, the normal labor and capital relationships change at the bottom level, the ownership changes, and the distribution of the rewards changes. And it and it literally can happen through ownership. The third option, of course, is some kind of uprising, either a Luddite style populist uprising or the alternative, which is a kind of a more, distribute the wealth traditional kind of uprising. And I don't think anyone's gonna let that happen. So this government

00:10:33 Andrew Keen: Well, I'm not quite sure of letting it happen. It might just happen. I mean, it's happening in a way, maybe not quite in a Luddite way when it comes to data centers, and local communities around America reject it. It's not formally Luddism. They're not burning the factories, certainly challenging, the idea of, data factories bringing wealth to their local community.

00:10:54 Keith Teare: Yeah. But your question about why would OpenAI do it is a is a good one. And I think it goes to who Sam Altman is. You know, it's a lot of things.

00:11:06 Andrew Keen: Exactly. I mean, it depends when you ask, and it depends who's asking.

00:11:10 Keith Teare: Well, he's he's recently said that he's decided that universal basic income isn't gonna work. And he's

00:11:18 Andrew Keen: Surprise. Surprise. I mean, that's been fairly obvious for years.

00:11:22 Keith Teare: But he's now started to talk about, universal ownership and distribution. So there is weirdly enough, there's a there's a coming together. They're still trying to differentiate themselves. Like, Bernie Sanders hates the idea that he's he's, being agreed with by these people. So he's trying to distinguish himself. But the truth is there's a coming together around government ownership of these companies in a sovereign wealth fund that as it's as it grows, can distribute annual dividends. And that is completely structurally possible if everybody wants to do it. I don't think

00:12:01 Andrew Keen: But then it comes back to your you know, your editorial this week is rather dismissive of Altman and Amodei. You don't really talk about Google or Musk. But, I wonder whether then if you're sympathetic to the idea in principle of a sovereign wealth fund. I'm guessing Amodei is. Altman, again, swings with the wind, but he seems to be at this point. So where's the payback? Everyone wins here in theory, I guess.

00:12:38 Keith Teare: Well, it so let's focus on where the tensions are because that kind of brings out the answer to your question. The tensions are in who gets to control, product development and release. It's only that. And I think both Amodei and Altman regret that they've come to the point where the answer to that is government. Altman yesterday was quoted as saying, this can't become the default future, which, of course, he said out loud because the likely it is that it will. And, Amodei already reacted against what the government did to Fable by saying it's a it's a misunderstanding, you know. We should roll this back. It's fine. You know, we can be trusted. Now my view is you can actually trust the companies and their scientists more than you can trust government to make decisions here. As long as there's, an understanding of what the goals and framework are, you they can they can be trusted to implement them and should be trusted to implement them. And government's role should be reduced to, using a law if they fail. There are laws, and or, figuring out the economic future.

00:14:03 Andrew Keen: Yeah. But, yeah, then on the goals of these companies and the goals of the US government, for example, especially when it comes to defense technology, quite different. I mean, if OpenAI or Anthropic can create defense AI technology that they can sell to foreign governments and make a large amount of money, that's presumably a good thing from their point of view. And, of course, from the American government's point of view, it's much more complicated. So they may not actually share the same interest.

00:14:32 Keith Teare: But there's clear law there. It you know, the US government does not allow the military companies producing drones to sell to certain foreign governments. I mean, there's rules and there's law, so you don't really need anything new in that domain. And I don't I don't believe the foundation model companies are productizing things for defense purposes. It's more that governments are buying non defense capability and then using it in a defense context. So the so the defense is really centered on the government more than the AI company.

00:15:11 Andrew Keen: So where so we've talked about Amodei, who's clearly, I would guess, in principle sympathetic to sovereign wealth fund, and now Sam Altman has, articulated, his own interest in the idea. Where's Musk on this, and where would a more traditional big tech company like Google be on it?

00:15:33 Keith Teare: Musk is Musk is aligned at the level of universal. He calls it universal, uses a word that means big. I forget which word it is. So it's not basic income, but it's universal big income. So but he's not a fan of government getting involved with companies in general. So I think I think we don't know the answer because he hasn't been asked, but I think it could be

00:16:02 Andrew Keen: But he's never been shy to express himself. When he has an opinion, he doesn't need to be asked.

00:16:06 Keith Teare: Yeah. I think if this thing gets legs, he'll he'll have an opinion. And honestly, knowing what I know about him, it could go either way. If he really believes it's a fair mechanism for distributing wealth to everyone, he'll probably be in favor because that at his core, he does believe in that. Amodei, I don't think does believe in that, and I think that Google doesn't believe in that. So I think you'd end up with Musk and OpenAI, with Bernie Sanders. David Sacks in that crowd with Bernie Sanders, and probably It's

00:16:42 Andrew Keen: A very, odd marriage. Yeah. Bernie Sanders, David Sacks, Elon Musk, Sam Altman.

00:16:50 Keith Teare: And I think Google would be standouts because they're more traditional, you know, Fortune 500, a traditional company, which is weird to say about Google. I mean, if Larry and Sergey were still running it, there may be a different answer.

00:17:03 Andrew Keen: Well, if Larry and Sergey were running it before the grown ups show now, but that was a long time ago. How would it impact then? I mean, let's just say this thing got legs, real legs, political legs. How would it impact the value of a company like Google, which is now worth, what, three, four, sometimes even $5,000,000,000,000?

00:17:24 Keith Teare: Well, it doesn't actually affect that because, the value is related to the growth in the revenues. It does affect the ownership. You know, the existing shareholders would probably be diluted by whatever percent. So instead of owning a 100%, the shareholders would now own 50% or 25%. So existing shareholders' share price would likely, go down.

00:17:50 Andrew Keen: So it would be a radical dilution. And then where's the money coming from, this sovereign wealth fund? It would come out of profit?

00:17:57 Keith Teare: Well, the way sovereign wealth fund works, it's a traditional thing. They have them all over the world. The US is one of the few countries that doesn't have one. Is, it holds assets. The assets appreciate, and it sells a small fraction every year to pay dividends if it chooses. It doesn't have to, but that's a choice. In this case, it's part of the narrative that it would do that. And it's kind of aligned with what Brad, Brad Gerstner and, the Republican party put together with this a thousand dollar check for every child born in The US, which is remarkable for Republicans to do that. And literally every child born, you get a thousand dollar check, and it grows over the first eighteen years of the child's life and is intended to set them up for something once they're mature. That doesn't sound very Republican, does it? But they did it.

00:18:57 Andrew Keen: Well, I think what's interesting is that this very unusual situation with the astonishing profitability of these companies and the massive wealth now being generated, Musk, I don't think he's quite a trillionaire as we speak, but he was a week or two ago. It requires sharp radical political responses. And what's interesting is it seems to be coming more from the Right than from the Left. Although, again, you have these odd political alliances now between Bernie Sanders and Elon Musk and David Sachs.

00:19:28 Keith Teare: Yeah. Well, Bernie Sanders has changed the debate on the left from big tech is bad to big tech produces wealth and we should share in it, that is a, you know, for a democratic socialist, that's a pretty long journey.

00:19:45 Andrew Keen: And where are the abundance crowd, the more moderate democrats like, as recline on this? I would assume that they would be sympathetic to the idea of a sovereign wealth fund too.

00:19:56 Keith Teare: They're definitely silent, actually. It's interesting. Just when you asked the question, it occurred to me. I they haven't really weighed in.

00:20:05 Andrew Keen: Well, we will see it. And I'm sure we will see it in Democratic candidates for the twenty twenty eight election. This will become a big issue. Meanwhile, one of the pieces that you linked to this week is on this very issue by Dean Ball, who has a large following on, Substack, his hyperdimensional, newsletter, does very well. He has 35 thoughts on what has happened and what America should do in terms of the current situation with big tech. That's 35, perhaps too many, or certainly 32 or 33 thoughts too many. What are what are the one or two thoughts that are real takeaways from Ball's piece, Keith?

00:20:48 Keith Teare: He basically the biggest point he makes in the context of this week's news is that there are no there is no framework that government's using to determine whether it cannot release a model. And he kind of talks about this new reality where government is saying yes or no to releasing models, but in the absence of any standards or controls. So, his point is that you can trust the companies to understand things more than the government. And therefore, be very careful in the absence of any framework, and really any ability to properly understand. Be careful to allow the government this amount of power. But I actually think it's too late. I think I think you can't unsee what happened yesterday.

00:21:42 Andrew Keen: Well,

00:21:43 Keith Teare: I

00:21:44 Andrew Keen: Always would think in America, especially in Trump's America, and it's never too late because he can change his mind or lose interest. Next week, there'll be another story. You link also to Paul Krugman's Substack, which I know you like. Is Krugman beginning to change his mind, on AI and jobs, his latest piece is technology, capital, and skills? And does that reflect the fact that Bernie Sanders now, who I think shares a lot of the political views of Krugman, is now at least sharing ideas with the Musks and the Sackses of the world?

00:22:22 Keith Teare: Not really, sadly. This is an article, that centers on David Ricardo, the classical economist, who is kind of the father of modern economics along with Adam Smith. But, Krugman makes a point. Ricardo is really more the father, and Adam Smith is an uncle. And it makes the point that Ricardo originally thought the innovation in the industrial revolution, even though it displaced labor and, increased the division of labor and productivity, was a good thing for labor. And Krugman makes the point that Ricardo later in his life reneged on that thought and, in front of parliament admitted that labor was a net loser from innovation. I don't like that framing. I think it I, you know, it my I will say as, the child of a union organizer, I'm very aware of, how labor conceptualizes innovation for itself. And there is this implied negativity about innovation because it takes jobs in quotes. But the truth is that, labor usually is a net beneficiary of innovation as new job. The division of labor flowers, new bloods grow, and it's historically been a net beneficiary. And we're

00:23:52 Andrew Keen: Me out of a job with this fake voice you've created, Keith. What am I gonna do in future?

00:23:58 Keith Teare: Exactly. But it does so Krug Krugman is on the wrong side of history here. He's not really seeing progress encapsulated in lower working hours or less work, which has always been a left wing idea. The idea that less work is good. Now unemployment is bad. So there's a contradiction there. And I think these terms, unemployment and, automation, don't really belong in the same conversation. Unemployment is what happens when you have no way of, of living, no income, and you get the welfare state and the safety net. That really isn't the right framing here. The right framing is the Bernie Sanders one. How do you benefit from growth of wealth? And I so I think Krugman's kind of stuck in the past a bit.

00:24:58 Andrew Keen: Interesting that there's a there's a contrast now between Krugman and Sanders. Another piece that I thought was particularly interesting this week is by the ever interesting Noah Smith. His Noah Opinion is one of the most popular Substacks. He talks about China winning the other tech race, not AI, electrification. Yeah. And I wonder whether America's got it the wrong way around. Rather than interfering in AI, they should be interfering in the race to electrify solar panels and all the rest of it, which they've left it so late, it's probably not a winnable race anymore.

00:25:36 Keith Teare: Well, if you if you if you if you don't conceptualize it as a race, it's never too late. It's never it's not too late for America to modernize its electrical infrastructure, but it has to want to do that. We're at we're at a weird moment because the promising technologies that could catalyze that, aren't really ready. Nuclear fusion being the obvious one there. Although, vastly minimized nuclear fission is now real. And

00:26:10 Andrew Keen: That may be true. That's the perfect case. But solar and wind are still influential. There's certainly the solar revolution is shaping or reshaping the Chinese economy.

00:26:23 Keith Teare: Yeah. I think I think I think that I think solar is, a societal expense. It still basically only works because of subsidies. So that tells you that solar is not yet efficient enough. The science isn't good enough. I have solar on my house. And I'm in I live in California, and I've got 22 panels. And, for half of the year, I don't pay electricity, but the other half, I do. So it and that's due to the inefficiency of the panels. So it's it's not Well,

00:26:57 Andrew Keen: You may have got a bad deal because I got solar as well. I don't pay six months a year, but that's another issue. I mean

00:27:03 Keith Teare: You probably pay something six months a year.

00:27:05 Andrew Keen: Pay something.

00:27:06 Keith Teare: Yeah. I same as me. I obviously, solar always pays some of my bill year round, but in the summer, it and it isn't just a summer. It's for about eight months, it pays a 100%. But it takes something like twelve years to pay back what you spent on it. So, you know, nuclear fusion and fission are way better, in terms of cost benefits and clean, with modern technology. So there is a path if The US wants to take it.

00:27:41 Andrew Keen: And I wonder whether that path could also include the sovereign wealth fund, the sovereign wealth fund idea that now is being debated on AI?

00:27:53 Keith Teare: Well, certainly, a sovereign wealth fund would invest in promising technologies. Absolutely. That would be the idea.

00:28:03 Andrew Keen: Smith talks about Paul Kennedy's best selling book and argument, The Rise of the Great Powers. How much of this, and he sort of compare any talk that discusses the way in which China's rise to a great power is because, in some ways, I guess, of its success in electrification. How I know you think in these Kennedy esque grand historical ways. In terms of American great power status, how essential is this to get one of these revolutions right, whether it's AI or, or electrification?

00:28:42 Keith Teare: Well, historically, you'd you would, you know, I Kennedy's book is sitting right here on my shelf. You will not surprise you to know. Historically, you would have to draw the conclusion that it is impossible for America to retain its first place status, because no country ever has. And there's economic reasons why that's the case because of the efficiency of, newly capitalized countries compared to older countries means that, you know, the cost of producing everything is much cheaper, and they can produce more of it because they're more automated. And China certainly fits into that. So, you know, it wouldn't be a stretch to predict that China and India and probably large parts of Asia, eventually including parts of Africa, are gonna be where most growth is in the world. And that America will, if, you know, accept its fate as an older gentleman, sitting on the rocking chair, you know, outside the house. That's that's

00:29:50 Andrew Keen: Basis on the rocking chair outside the house. Europe won't even be in that rocking chair, will it?

00:29:56 Keith Teare: Well, then well, then the question arises, does this AI boom change that? You know, what would normally have been the prediction? Does what's happening with AI change that given how American centric, currently at least the technology is? I think the answer is no. It doesn't change it. It may slow it down. It may change the rate of change. It, you know, it's kind of frustrating for me to see the world in that way. One country versus another country. I hate that. I love Yeah.

00:30:31 Andrew Keen: But it's a real I know you hate it, but it's a reality.

00:30:35 Keith Teare: It is a re it's definitely a current reality. But at some point, I don't know if you've been to see Steven Spielberg's new movie yet about aliens.

00:30:43 Andrew Keen: Yeah. That was terrible. Did you argue?

00:30:46 Keith Teare: I haven't watched it. But, it you know, one wonders if, if the aliens really did come, whether we might, you know, all start thinking we're all the same and start acting together.

00:30:59 Andrew Keen: Yeah. I somehow doubt it. Anyway, I don't think they are coming. What is coming for sure is the AI economy. You link to, a piece from The Exponential View, which is another excellent blog by our old friend, the Golders Green based, Azeem Azhar. And he talks about this state of the current AI economy, asked whether revenues are real. I think he concludes they are. What's Azhar's, conclusion on the current state of the AI economy? It's real, isn't it?

00:31:32 Keith Teare: Yeah. He quantifies it at roughly, I think it's roughly a 175,000,000,000. And then he shows the cost structure and the revenues as being aligned in a way that suggests that this is rational, investment, if you will. And it he they produced a long report, which in their own words is, flawed and partial, but it is a good first attempt. And he asked for people to engage with him and suggest how they can make it better next time they produce it. But he's clearly Exponential View, which is his blog. It's more than a blog. It's a media company, really. It wants to own the, you know, the framing of this over time. And I think he's done a pretty good first job of doing that.

00:32:22 Andrew Keen: Reading it does suggest that for better or worse, we can all create all sorts of nightmare scenarios or utopian scenarios. But what I think Azeem suggests is that whatever we're thinking, this thing is moving ahead. And another piece I thought was interesting was, another person you often, link to, Alex Lazarow's, 99%Tech, on AI and trust and how we're seeing the appearance of a trust layer. He compares it with the emergence of the Lloyds of AI. Hasn't emerged yet, the equivalent insurance company for the industrial age. But where are we in this trust economy when it comes to AI, Keith?

00:33:15 Keith Teare: I think trust happens at the point of AI being applied. In other words, like, when I used it to do that video last week, for the first hour, I didn't trust it. And then I did because I was able to get it to do a decent job. Now what it really amounts to is trusting yourself to use it as a tool. The idea of trusting it implies that it's doing things when you're not asking it to. And that and that and that just isn't true. So trust happens at the point where the human engages with it and uses it. So I don't think there's an abstract trust as such. So, Lazarow's idea of, you know, in the past, there were people who give certificates and so on. That probably isn't relevant here. I think what's more relevant is that usage will only happen in so far as there's good outcomes. And those good outcomes create trust, and that trust is reinforced the more you use it.

00:34:27 Andrew Keen: Well, I hope you trust us, or you hope you trust me, Keith. Have I convinced you that the actual version of myself is better than the fake one?

00:34:36 Keith Teare: Oh, definitely better, Andrew.

00:34:38 Andrew Keen: Yeah. You tell all the girls that, don't you, Keith?

00:34:41 Keith Teare: I used to.

00:34:42 Andrew Keen: Well, that was the week for 06/27/2026. We will be back in July, the day, perhaps, Keith, of, July 4, an important anniversary in The United States. So have a good week, and we will see you all next week. Thank you so much.

00:35:00 Keith Teare: Bye.