This is Naked Capitalism fundraising week. 1009 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, PayPal, Clover, or Wise. Read about why we’re doing this fundraiser, what we’ve accomplished in the last year, and our current goal: funding bonuses for our terrific writers.
There are two possible reasons why the AI industry is beginning to prepare the ground for a potential nationalization. The first is to socialize the losses created by the AI financial bubble. The second is to merge AI companies with the state and become an official part of the power structure.
The recent AI doomer scenarios pushed by leading AI executives and amplified by the media are very suspicious. As Nat has been covering, it sounds very much like an orchestrated effort by frontier AI labs to justify anti-competitive regulatory capture and potential bailouts. Without the part about the bailouts, that is also the opinion of Yanis Varoufakis.
In a recent conversation with Wolfgang Münchau on their podcast Econoclast, Varoufakis described Dario Amodei and Sam Altman’s pleas for government regulation as a “cynical, dreadful fraud”. By hyping bogus “10% extinction” scenarios, frontier labs attempt to establish cartels and use antitrust controls against smaller startups while escaping direct corporate liability.
This would also be the motivation behind the recent AI Accord on Superintelligence signed at the White House. As Nat has previously covered, it is a cynical, voluntary public-relations exercise designed to achieve regulatory capture, preempt real legal liability, and protect the incumbent AI labs, rather than provide genuine oversight.
There are two dynamics here. The first is media-created hype about potential doomsday scenarios regarding AI. The second is a public relations exercise to accept government supervision, which in practical terms will be basically negligible, but will establish regulation barring other companies, especially foreign ones, from entering the market and hence create a monopoly.
This could be read as the AI industry creating hype about why their technology is so important—so much that it could kill us all—and pretending to accept government regulation so that when the bubble bursts, they are deemed “too big to fail” and rescued with public funds. This scenario seems plausible and ruthlessly clever.
The financial woes hanging over these companies are well known to readers of this blog. Once again, Nat’s excellent coverage has shown that financial analysts and informed commentators are warning that excessive debt, unbuilt capacity, and speculative narratives are approaching a wall of economic reality.
For example, a leaked draft of Anthropic’s IPO prospectus shows that while 2025 revenue surged over 1,000% to $4.6 billion, the company posted an $8.06 billion operating loss and a staggering $42 billion net loss (partly attributed to liability write-downs). Anthropic faces over $518 billion in future cloud and compute commitments and relies heavily on just two customers for nearly 25% of its revenue.
In another example, while reports cite OpenAI’s revenue run rate nearing $70 billion, audited 2025 figures show it lost $38.5 billion on $13.07 billion in revenue. The company is seeking a $30 billion bridge round at a $1.4 trillion valuation after pushing its IPO to 2027.
In this scenario, what do we make of Alex Karp’s statement: “The only way to deal with this kind of liability is to go to the government and say, ‘Nationalize us, please’”?
Karp can say it because Palantir has been basically a CIA protégé since its conception, and is so enmeshed in the surveillance and defense industry in the U.S. that it’s difficult to see where one ends and the other begins. However, what he’s saying here is different. He says that the only way to protect frontier models from intellectual property theft allegations and uncapped legal liabilities is to eventually seek or require nationalization.
That is in line with his vision, duly explained in his book The Technological Republic. He proposes that rather than viewing the state as an adversary, a regulatory nuisance, or a passive client, technology companies have an existential, patriotic duty to serve the national interest.
One of his key proposals is a return to the “Cold War Alliance” (The New Manhattan Project). Karp advocates returning to the civic-industrial paradigm of the mid-20th century, when top scientists, engineers, and government officials worked in tight alignment to counter “totalitarian threats”.
He likens the current artificial intelligence race to the Manhattan Project, arguing that the survival of liberal democracies depends on whether the West or its adversaries achieve and deploy algorithmic superiority.
Both OpenAI and Anthropic founders have made similar claims. Dario Amodei’s vision has gone from a utopian scenario where a nation could have thousands of Nobel Prize-level agents working for it to one where AI could possibly destroy life as we know it. Sam Altman has followed a similar trajectory. It is also possible that both speak of different possible scenarios depending on the audience and their interests, which seems more plausible.
This has led them to argue that the U.S. should treat AI as a new Manhattan Project, echoing Alex Karp’s vision in his book, which was published in February 2025, before alarms of a financial bubble caused by the AI industry began to be widely heard and before doomsday scenarios were in everyday circulation. Is this a coincidence?
The tech industry, the “Magnificent Seven”, and especially the AI industry, function as a cartel. They compete with each other, but they lobby and push for regulation that benefits them. Furthermore, because of their dominion over hardware and software, they have become a new kind of industrial elite.
I have argued before that this elite know each other, talk to each other, share common spaces, and watch and read similar things (accounting for personal peculiarities). This became more evident during the trial between Elon Musk and Sam Altman and with the “uncovering” of Peter Thiel’s “secret society”. And this new elite is claiming its place in the upper echelon of systemic power. That’s one of the reasons why J.D. Vance, who was a Peter Thiel employee, is where he is today.
They have a similar agenda, though each specializes in different fields. One of their core understandings is that “democracy is no longer compatible with freedom”, as Thiel wrote in 2009 (whose freedom, one may ask?). Thiel, during his time at university, founded a magazine called The Stanford Review with the support and money of Irving Kristol, considered one of the fathers of the neocons.
The technology developed by Thiel, the rest of the PayPal Mafia (including Elon Musk), and, through their influence, many other technology companies, follows an agenda towards technocratic government, massive surveillance, total financial control, and automated warfare. I’m not saying that every Silicon Valley founder is behind this nor that the technology they develop is only useful for that. What I’m saying is that as a group and an elite, those who are part of it have similar ideas that revolve around those themes.
And what does this have to do with nationalization? I think that it can be read in two ways. The first is fencing their companies from the storm looming around the AI and tech industry and potentially receiving a bailout. The second is taking another step toward integrating their technology into the fabric of the state—not only as a tool the state uses, but as part and parcel of the state, solidifying their position in the upper echelons of systemic power and preventing a take over that would push them out (and which fouders of OpenAI feared). I think both can be true at the same time.
By
