What has gone wrong with the minds of Silicon Valley? In the 1970s the place was full of hippies who saw computers as a counter-culture. In the 1990s information wanted to be free. In the 2010s the internet was claimed to topple dictators. And now? Now Silicon Valley is run by broligarchs – tech bros who want to control elections, control the media, control the markets. (And in some cases puppets for bigger forces.) Much has been said about Big Tech’s ideological U-turn, but Netopia wants to offer three observations: early signs, religion and… sand. Bear with me:

Early signs. Let’s take a look at the arch-broligarch, tech investor Peter Thiel. He laid out the plan almost forty years ago as the co-founder and editor-in-chief of student newspaper Stanford Review when he articulated the manifesto for Silicon Valley’s dominance: 1. No regulation 2. No taxes. 3. No copyright. 4. No competition. It is fair to say that the plan worked. The same Thiel suggested datacenters be set up on abandoned oil rigs on international water in order to escape government intervention (Barbara Broccoli, if you read this put this in the next 007 flick!). In his 2014 book From Zero to One, Thiel advocates niche monopolies as business strategy (no competition!). And perhaps those oil rigs aren’t necessary after all, if you pull the strings of policy-makers like puppets. None of this should come as a surprise though, the signs were there all along.

Religion. Worship higher powers, separate soul from body and be blessed with eternal life. Sound familiar? They simply replaced the word God with AI and look what happened. If you want to know if a broligarch is after your soul or just your money, look for the word TESCREAL for example on their Twitter/X-profile. (Or check if they are a member of a community such as this!) Tescr… what? Let’s decipher it:

T – Transhumanism. Transcend the limits of the physical body and live forever through technology. Stop infection with microbots in your bloodstream. Replace worn-out organs with synthetic ones. Add new sensory functions like night vision. None of these technologies exist yet? Fear naught, there is a company that offers to cryo-freeze your corpse until the tools and methods have been properly developed.

E – Extropianism. An earlier label for the transhumanism idea. A scoop on Truthdig revealed that this also included ideas of superior intelligence in the white race (by Oxford AI professor Nick Bostrom no less).

S – Singularitarianism. The idea that the accelerating pace of innovation will come to a point – The Singularity – when all innovation happens at the same time. Moore’s law which predicts increases in computing power is one ingredient. The speed of dissemination of new technologies (soundbites like “television took four decades, smartphones four years and Chat-GPT four days” are par for the course) is another. Expotential growth is another key word. When the singularity comes, technology will liberate us, we will live forever and shall not want. Google chief technologist Ray Kurzweil expects the singularity in the year 2045, though his more recent forecasts suggest it may have been delayed slightly. Oh, there is also the Singularity University in Santa Clara, CA, (right next to Google’s Mountain View) where students can study this concept.

C – Cosmism. Humans will merge with technology and become a new race, for example by uploading our minds online and live forever without bodies. Same Kurzweil has a new book out about this (review coming soon on this website). And of course William Gibson described this idea long ago in Neuromancer (Ace, 1984) where “cyber-cowboy” McCoy Pauley’s consciousness uploaded to ROM-drive plays a central part. (Re-read the book!)

R is for Rationalism. For all this good stuff to happen, we need really smart people working on the execution. The TESCREAL-flavour of rationalism is about finding ways to make people smarter so the fantasy can become reality. An obsession with IQ-tests is part of the package.

EA is for Effective Altruism. Don’t waste your time saving the world at some not-for-profit, instead make heaps of money on something evil and donate to something good. How about crypto currency scams and donations to one of those NGOs (or Singularity University!)?

L – last but not least: Longtermism. A moral compass that says if human kind can live forever uploaded to the cloud or on new planets, maximising happiness and minimizing suffering the really long view means we should care more about the happiness and suffering of those who will live forever in the future than those who live today. Can’t make an omelet… (or as if talibans interpreted utilitarianism.)

So there it is. TESCREAL is a litmus-test, use it to see if a broligarch is a creepy cultist or just a harmless hyper-capitalist megalomaniac. TESCREAL’s baby cousin is e/acc or “effective accelerationism” which means we should accelerate the development of AGI so it can fix our problems. (It makes for good sci-fi, in the very least) The word “problems” is key to understanding the TESCREAL world-view. If the world is full of problems that stand in the way of our development as a species/civilization/culture/insert-your-favourite-big-word, it would be great to solve them, no?

But you said something about sand? Ah, yes. That too. I’m thinking of course of the Burning Man-festival, the Nevada Desert glamping fiesta where some pay 2 500 US dollars to expand their minds, share their ideas about the inevitable path of technology and partake in sexual experimentation (maybe I’m just envious of the “sex plane”?). Elon Musk himself said “if you haven’t been, you just don’t get it”. Burning Man has come a long way from its anti-capitalist roots, just like the Silicon Valley – once a haven for hippies. Perhaps this is why higher powers released their wrath on last year’s “burners”. Or maybe that was an AGI taking control of the weather?

Is it only me or has the phrase US innovates, China replicates, Europe regulates become increasingly popular? In any case, it smells like a myth. Let’s dissect it.

The narrative that only America can invent great tech companies is familiar. It’s convenient for anyone who wants to argue that things like competition, copyright, governance and responsibility stand in the way of innovation. For sure, that is a very one-sided view of innovation. Why worry about disruption of local economies? Democratic elections? Fair competition? If innovation equals techno-capitalism, the first part of the line is true.

China replicates – this one is probably true too. I’m no expert on China, but I have visited the country several times. On a shallow level, China copies a lot of brand fashion for example. On a deeper level, it puts a lot of renminbi into buzzword technologies like AI, quantum computing, future materials and such. But it’s TikTok that is China’s biggest tech hit, not necessarily a product of all that investment. Is TikTok replication of US social media? On some levels yes: it builds on user-created material and a compelling algorithm, just like YouTube or Twitch or Facebook Reels. The business model is based on harvesting user data, just like some of the Silicon Valley skyscrapers’ (except not only to share with advertisers and the NSA…). It is also fair to say that the success of TikTok is credit to re-interpretation and re-invention of this formula. Just like Snapchat or Instagram or Reddit or a long list of US tech hits. China replicates. And it re-invents. Just like the US.

Europe regulates – hehe… hard to argue with that one. The European legislator brags about having the world’s first ever AI regulation. And it is proud of its GDPR export. (Does GDPR export add to GDP? Sorry, pun intended.) But… as if China does not regulate? The Chinese government owns golden shares in the biggest tech companies. It has the Great Firewall and Sesame Social Credit. More regulation than any eurocrat would ever wish for. More importantly, US regulates too. In fact, Silicon Valley’s success relies on regulation, not least the notorious Article 230 of the Communications Decency Act – which has very little to do with decency, but grants technology providers immunity from liability for crime and violations by their users. That’s not all, where do the famous investment bankers on Palo Alto’s Sand Hill Road get the money from? Successful entrepreneurs? “High net-worths”? No, it’s public money. The federal loan guarantee programs going back to the 1950’s give four public dollars for every private. The investment bankers used this policy dating back to president Eisenhower to full effect.

So everybody regulates, but Europe creates. We may not have the huge consumer markets, internet platforms and public funding systems of the East and the West. But Europe has hundreds of thousands of creative business of all sizes building on what we like to think of as European fortés: pluralism, expression, quality.

In digital, if China is the child trying to find its way and US is the disruptive teen who wants to move fast and break things. Does that make Europe the parent?

Netopia turned to artificial intelligence for guidance in this European election.

We put the election manifestos of the main party groups into a large language model and asked it to analyse the digital policies. Read the result here: LLM analysis of key party manifestos – EU Elections 2024 – Netopia Netopia

Oh, and here is an infographic based on language analysis of the election manifestos. Looks like blocs don’t care about copyright… (at least ot in this election). Digital Policy Topics in EU Election – Netopia Netopia

But enough about the real policy-makers, what would AI do? We interviewed three LLMs about their views on digital policies: Vote AI in EU Election? – Netopia Netopia

Would you vote for a machine? In this election you can’t, maybe in the next? In any case, don’t forget to vote!

The digital economy runs on optimism and expectation. Tech startups don’t make money as long as the scale. Big tech shares are measured with a different yardstick than other businesses. Employees many times make more money from stock options than wages. And whatever short-term problems (“disruption”) it brings is always compensated by big promises (“opportunities”) for the future. But is the hype machine running out of steam?

We’ve had a steady influx of hype for decades. Web 2.0. Smart phones. Big Data. 5G. Smart watches. Blockchain. Web 3. Metaverse. AI. Each of them sparkling with new possibilities, attracting capital private and public, disrupting existing economies and attracting “early-adopters”. Never mind the actual contribution to economy or jobs, get in ahead of the curve and you can make big bucks.

The unusual decade of negative interest and quantitive easings (=printing money) by central banks has been a perfect driver of this economy. If you lose money by keeping it, invest it anywhere. Facebook for pets? Let’s do it! Micromobility app scooters? Bring it! As long as new investors come in after, you can make a nice exit.

Of course now the macro-economy has changed. The era of free money is over. Share-holders ask for profitability over growth. So that is one problem. But is there a bigger problem? What if innovation is dead?

I used to be able to see what was coming around the corner. Spot the next hype from a distance. So perhaps I lost the touch. But I have no idea what comes after AI. Far-future technologies like DNA data storage and quantum computing are decades away. Sure, digital twins and 6G mobile connectivity, but the use cases are more for business-to-business than consumer facing value chain upsetters.

Maybe I’m just out of touch. Or maybe there is a new hype arriving any moment. But it could also be that there is no new great hype any time soon. I am concerned for the big tech barons. Surely the era of digital feudalism cannot be over…

Everybody’s talking about Dune II, Netopia also wants to be in the club! We don’t review movies, but there is a copyright angle here – and not one you might expect. Here goes:

I have done a fair share of lecturing to students, mainly in games. Some of them want to start businesses and want to talk about how to protect their ideas. Except ideas don’t have any legal protection, it is the end result – the work – that can be legally protected. Actually, ideas have little or no value, it is only when you realize that idea into something that other people can enjoy or use that they get value. The more work you put into the idea, the more the value grows. Of course, a good idea is a great motivation for that work. (But the process tends to change the idea on the way, hence the concept “kill your darlings”). But I digress, the challenge is to explain this to the students without killing their enthusiasm. Enter: Frank Herbert.

Frank Herbert was of course the author of the Dune-books. The first movie was made in the 80’s by David Lynch and before the new movies came out, I used to illustrate this with an image of the star Sting in space swimtrunks. There is a story about how Frank Herbert when he did book signings often met fans who had the same brilliant proposal:

I love your books. I have a great idea for the next Dune-book. How about I tell you the idea, you write the book and we split the money?

There is a particular flavour of European techno-nostalgia. It says something like: We used to be the leaders. We used to be inventors. We used to make the fastest trains, the fastest planes and the fastest cars (well, that may still be the case). We used to be drivers of new technologies: telecom, microchips, and energy. But today, Europe asks itself: “What happened? Where are the European ‘digital champions’? Why has Europe not produced an Amazon or a Tiktok?” (Next instant, somebody says “Spotify!” and then what?).

These phantom pains may be the reason why there are so many EU policy and funding initiatives aiming to bring forth a European digital champion to rival those of California and China. The idea is that public support will bring competitive companies. That has worked really well for Silicon Valley and Shenzhen. The famous tech funds on Sand Hill Road are built on public funding in the form of federal loan guarantees of four public dollars for one private. 4:1. One detail: the US Small Business Investment Act dates back to 1958, giving America many decades head start. In China, the five year-plans provide ample funding for various technology industries. So plenty of public money to the West and to the East.

Can Europe catch up by pouring public money into digital start-ups? Could that bring the European digital champions we yearn for? (If you think those looks like rhetorical questions, it is because they are!) The answer lies in how the tech startup system works and the keyword here is “exit”. Let me try to make sense of it:

Digital entrepreneurs are not expected to make any money, they are expected to “scale.”. Investors don’t care about the profits of the company, they have a longer view of value. Of course, the company still has costs, but those are covered by the investors. There is a system of “rounds” called things like pre-seed, seed, series A, B, C etc. Each step of the way, investors get shares of the company, and what they pay for those shares determines the valuation.

If you pay one Million US-dollars for 10% of the shares in a “series A-round”, the startup is valued at ten Million. If, in the “Series B-round,” the next investor buys 5% of the shares for two Million USD, the startup is valued at 40 million, and the first investors shares have quadrupled in value.

The risk is considered to be lower in later rounds, so earlier investors get more shares for the same money. Note that this can go on for several rounds, with the startup operating at a loss. So… now you probably ask “how do investors get their money back?”. The answer is the magic word “exit”. Normally, this could be different things, for example, offering the company’s shares on the stock exchange or selling to a bigger company or investor. But for tech startup investors, the end goal is (almost) always the same. Exit by selling the shares to an internet skyscraper. Amazon, Apple, Google, Meta… the usual suspects. Those mammoths know how to make money from users, the investors cash out and move on to the next case. Happy end for all involved. (This system used to work much better in a low-interest rate economy, but the exit-principle is the same).

This means no amount of EU startup-funding will bring European champions: as long as the end goal is exit to Big Tech, all that tax-payer money only serves to reinforce the incumbents.