James van Geelen on His Viral AI Doom Scenario

SPEAKER_2 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:23)

Joe, we're in the media business.

Joe Weisenthal (0:25)

That's right, that's right.

Tracy Alloway (0:26)

Have you ever had an article go viral, unexpectedly viral?

Joe Weisenthal (0:31)

Yeah, I'm trying to remember specifics, but yes. And it's one of those things, typically, where you're really excited, it's like, oh, a lot of people are, you know, there's getting a lot of traction. Cool, people are talking about this. And then it goes multiple orders of magnitude bigger, and you're like, oh, this is like super weird and no context for what this is. And you're like, sort of want to hide in your home and like close the laptop because then you just sort of like make it all go away and stuff like that.

Tracy Alloway (0:57)

Yeah, it's kind of like once you release it into the world, you don't actually have a lot of control over how people use it. And I think back to, I wrote a piece about some investors trying to revive claims on Chinese imperial bonds, like antique Chinese imperial debt from the early 1900s. And somehow, this went absolutely viral in Hong Kong at the time of the pro-democracy protest. So I would walk down the street and I would see these homemade banners that people had created saying that China owes the US like 20 billion in payments on old debt.

Joe Weisenthal (1:34)

And it was just surreal.

Tracy Alloway (1:37)

Absolutely surreal and like completely unexpected because you wouldn't think that some like intricate debt story was suddenly going to become a pro-democracy protest slogan. But the world works in mysterious ways. And speaking of the world working in mysterious ways, there is something that went viral this week. We are recording on February 27th. And if you haven't heard of this particular thing, you have probably been living under the proverbial rock.

Joe Weisenthal (2:04)

Right, so past Odd Lots guest, James van Geelen, a co-author to Peace on his Substack, Citrini Research, talk about a potential AI doom scenario, which a lot of people talk about. And there's been a lot of talk about mass white color displacement as a possible thing that could happen as AI gets adopted, et cetera. But we know that the market's been very skittish about this specifically. We've been seeing the software stock sell off all year, which we've talked about plenty on the podcast and some of the private insurers and all of this. And something about this moment and this particular piece, I think it came out on Sunday, last Sunday, landed with a sort of unbelievable thud. And so it evidently started moving markets on Monday. And then throughout the week, and this is the part that really flabbergasted me, was you see all these banks and economists, et cetera, weighing in, and many of them are very critical, and Citadel Securities, which I didn't even know they publish stuff, because that's just a market maker. They put out all this stuff. So I was responding to it and trying to take it out. It was as a market story and a media story, a wild week.

Tracy Alloway (3:12)

It has become the discourse du jour. There's actually a prediction market on it, which you were telling me about a few minutes ago. This thing has just become much bigger than the initial substack, which to me, again, says much more about the nervousness of the market and how little anyone actually knows about how AI is going to unfold at the moment that people are so keen to just latch on to any scenario that comes out.

Joe Weisenthal (3:37)

I get these notes from sell side or research shops, and they're like, clients have been asking us about the Citrini scenario. And it's just like, wow, this is wild.

Tracy Alloway (3:46)

That's right. People calling up Capital Economics being like, I manage a portfolio of 100 billion, and I am concerned about a substack. Okay, well, we should talk to the author of this substack. And as you said, we've had him on a number of times before, often talking about AI. It is of course, James van Geelen, the founder of Citrini Research. So James, thanks so much for coming back on the podcast.

James van Geelen (4:06)

Thanks for having me.

Tracy Alloway (4:07)

Why don't we start with what Citrini Research actually is, and what it is that you actually do in some of your other enterprises? Because I think this has become also a source of confusion, or at least interest for people who are reading this.