#152 - Balaji Srinivasan - The Mathematics of Collapse: Why The West Is Going To Zero

**Balaji Srinivasan** (0:00)
Western civilization is over. America is over. Western Europe, as we know, is over. But the internet is just beginning. If tax revenue is a few trillion a year, but compounding debt is at 175 trillion a year, obviously, it's unsustainable. It's going to go to zero.

**Peter McCormack** (0:14)
But is taking the L then admitting this and allowing the separation to happen?

**Balaji Srinivasan** (0:19)
Taking the L is admitting that you can't throw good money after bad. You can't also throw your spiritual energy behind a lost cause. Instead, when you write it off and write it to zero, the West is going to zero, America is going to zero as we know it, right? Then you say, what can we rebuild? Much more important than allocation is location. Choose your location. Just like the poll came to the UK, maybe the Brit goes to Poland or to Dubai, which a lot have done. One of the best things you can do is liquidate, emigrate, accelerate, and reduce your cost structure. AI isn't taking your job. AI is turning you into the CEO.

**Peter McCormack** (0:57)
This show is brought to you by my lead sponsor, IRON, the AI cloud for the next big thing. IRON builds and operates next generation data centers and delivers cut in edge GPU infrastructure, all powered by renewable energy. Now, if you need access to scalable GPU clusters or are simply curious about who is powering the future of AI, check out iron.com to learn more, which is iren.com. Balaji, good to see you. How are you?

**Balaji Srinivasan** (1:23)
Good. Good to see you too, Peter.

**Peter McCormack** (1:25)
These are very interesting times. I'm trying to understand at once this collapse in trust, which has been accelerated with everything that we're seeing around Epstein, the rise of AI, which feels like it's accelerating right now, and the potential bankruptcy or insolvency of the state. I messaged you the other day and you said there's a potential for Silicon Valley to go to zero. What's your mental model for the world over the next 10 years?

**Balaji Srinivasan** (1:58)
Well it's hard to model out 10 years because a lot of things happen.
I mean, you know, the earth will go around the sun and the moons will go around the earth. I know that sounds trivial, but you can plan things like space, you know, like space launches and you know, like rocket launches and satellites and stuff on that basis. But many aspects of human behavior I think are going to change. Just on the points you just mentioned, why do I say it's possible that Silicon Valley goes to zero? So there's an important graph. I will actually share it with you. Zero Hedge tweeted it and sort of shows the cash flow of, free cash flow of the Magnificent 7 And because they're spending so much on these AI day centers, like these which are some of the most profitable businesses in existence, you see a huge hit visible in their cash flow because they feel that AI is so existential and it's so expensive. And billions and billions and billions of dollars are going into it. It's this gigantic, gigantic spend. And the thing about that is obviously AI is really important. But the weird thing is that this multi-trillion dollar, like it's clearly an invention on the scale of a multi-trillion dollar innovation because it disrupted Google search, right? It disrupted search, it disrupted summarization, it disrupts email, it disrupts CRM, it disrupts image making, video, movies. It really is a big deal, right? It's genuinely, genuinely a big deal. It disrupts robot guidance, blah, blah, blah, blah, all kinds of, endless industries. And yet it may actually end up being part of what disrupts Silicon Valley itself. And the reason is there's several things that are aiming for Silicon Valley at the place. There's the anti-tech backlash with like many Democrats, they've been disrupted by the Internet. Like we talked about in the last podcast, the Internet disrupted Blue America. It took away their control over media and money. So speech went to social media, media went to AI and money went to crypto, right? So they fought really hard. And in 2024, 2035, Democrats lost control of speech, media and money, right? With social media, with AI video, with cryptocurrency, their strongholds have been destroyed. They lost not just control, but also control of their jobs or livelihoods and so on and so forth. And they're really mad, really mad, incandescently mad. I can't express how angry they are in words at the tech guys that they feel did this to them, who also, by the way, took control of their beloved government, right? Which gives them all kinds of jobs and so on and so forth, right? And so if you look at Blue Sky, you look at threads, these are people who, you know what it is, is their blue MAGA. You know why?