That is the market being free, George.

The grand, boneheaded naivete to fail to understand that middlemen are an emergent and intrinsic property of free markets in practice.

Back before the iPhone I used to get into arguments with HCI specialists that phones could be like butlers and should know with all the sensors that they have that you put it in your bag and behaved accordingly. I was told that was impossible then but it seems more possible now. Had the world gone at all that way we'd have a freakin' API to make a restaurant reservation and wouldn't have to go through multimodal hell.

Economic rent is the extra money you can charge for owning a scarce resource. ML models are not waterfront real estate, they are IP. Other people can make more models if they can/want to.

Now, whether IP should be legally protected is a totally separate question, and while we in the West tend to assume the answer is obvious geohot would certainly not be the first person to suggest broadly applying private property rights to information makes questionable sense.

network effects, distribution, proprietary data, systems of record

companies like opencode have none of the above

cursor's distribution has been faltering and they're hard pivoting to training their own models with their proprietary data to try to build their moat back

Enter Terms of Service, monopolies and duopolies, and maybe even cybercrime statutes.

There’s no law that says AT&T can’t just ban your account if you hook up your “talk to customer service” bot to their AI/overseas customer service phone tree army.

Or, they can just lock your account for “safety” reasons.

1. Demographics - Aging population needs transportation. God knows we certainly don't need really old people driving themselves. We got a taste of the future in West Portal in that regard not long ago.

2. Human Capital - The US has pretty much demonstrated that there is little desire to import low skilled labor. Where do these theoretical Taxi drivers come from? Or welders or plumbers. Labor is going to become increasing expensive no matter how you slice the pie.

3. Younger US citizens are going to gravitate to non-manual labor jobs. It is not just that every one is being steered toward college. Physical labor (trades) take a toll on the body. I know - I have work in them - and you quickly extrapolate what that will be like when you are 50.

The Chinese models are open source because they are not state of the art. Once they catch-up or lead, they will likely close them down by a government mandate. Just like Meta was fine with Llama being open source but once they started to get close to OpenAI/Google/Anthropic, they shifted their language to "maybe we won't keep doing that."

The idea that AI will end the "rent-seeking class" that has effectively existed for thousands of years is... not going to happen! The business model just adjusts. And if AI is going to be an economy-shaping super disruptor, the cloud-hosted models will continue evolving beyond what you could ever run at home under the desk.

A couple decades ago people used to think that since anyone can build a website internet businesses will never have a moat. In a hyper-capitalist system the top players will always find a way to dig a moat.

Agentic commerce will render Amazon and the rest of the rent seeking marketplaces obsolete given enough time. Because LLMs can literally go straight to the seller and perform checkout, do market research to make sure the seller is legit, and the seller can sell for lower than on the marketplace since they aren’t paying a 15-20% cut.

Yes, this is what Tock is for. It's not clear to me that it's a bad thing. It replaces the old $20 in a handshake I used to do with the maitre d at the front of the restaurant. Democratizes opportunity and improves transparency

Almost always nowadays lol. Shit I’ve gotten poorer over the past few years.

"The Chinese open source model running on the box under my desk can pass the Turing Test. When you call, e-mail, text, or show me an ad, you’ll never know if it’s me or my model seeing it."

And the only thing they'll notice when you are replaced with that opensource model is the slight reduction in the required personnel budget going forward.

> The era of purposefully frustrating humans is over. The Chinese open source model running on the box under my desk can pass the Turing Test. When you call, e-mail, text, or show me an ad, you’ll never know if it’s me or my model seeing it.

But at some point, you're going to want to do something, like, e.g., buy something. Then you're right back to the problem in the opening quote:

> things take time, patience runs out, brand familiarity substitutes for diligence, and most people are willing to accept a bad price to avoid more clicks.

& we're already seeing AI used to do this. E.g., Amazon listings where product photos are AI generated. (… not that many product photos weren't "bad photoshop of product onto hot sexy model who is obviously not using our product" before … but now it's AI!) Whereas before someone would have had to spend a modicum of time badly using Photoshop, now AI can just churn out the same fraudulent result in a fraction of the time.

Now, if I have a problem with a product, instead of just calling a number, browsing a phone tree, getting put on hold, and finally having to struggle to get some human to understand the basic logistics of "I paid for X, I did not get X, I demand X or refund", I get to do all that but with the extra step of "forced engagement with an AI that is incapable of actually solving my problem". (This somehow still manages to apply even when the problem is seemingly trivial enough that I find myself thinking "… this actually should be something an AI can do" but inevitably, no, the AI is "sorry", it cannot do that.)

And besides, calls, emails, etc. are already handled without AI: I (and everyone I really care about) have either allowlisted all inbound comms, or abandoned the medium altogether. Moreover, any communications medium is useful because it is not infested with spam, and will eventually be destroyed by spam. At least until we grow laws for mediums like phone/email, maybe named things like "Do Not Call" or "CAN-SPAM" and those laws are enforced. But the GOP has no interest in enforcing any level of consumer protection, so here we are.

"The American market has not been free" because companies use call centers and friction to retain customers? That is the free market. No regulator forced Comcast to have bad hold music. They did it because it's profitable and because switching costs are real economic phenomena, not government distortion. Rent-seeking has a specific meaning in economics: capturing value through regulatory manipulation, not through being annoying to cancel. What's described here is just transaction costs. Coase wrote about this in 1937. The complaint is literally "firms optimize against consumers in an unregulated environment," which is the free market working exactly as designed.

AI as "the great equalizer." Equalizing what? AI agents that negotiate on your behalf get countered by AI agents that negotiate against you. The asymmetry doesn't vanish, it escalates. The company still has more compute budget, more training data on customer behavior, and more incentive to invest in adversarial optimization than you do. You get a chatbot. They get an enterprise deployment tuned on millions of interactions. The gap widens.

China "wants AI as a public utility" is doing enormous work with zero evidence. China wants semiconductor independence and geopolitical leverage. Qwen is open-weight because Alibaba wants cloud customers, not because the CCP is running a charity. Commoditizing the model layer serves Chinese hardware and cloud interests exactly the way the post itself explains ("commoditize your complement") then inexplicably frames as altruism.

The punchline the post avoids: every historical example of "friction removal" at scale (Uber, Airbnb, Amazon) concentrated wealth upward, not downward. The middlemen died, the platform owners became billionaires, and consumers got cheaper goods produced by worse labor conditions. No mechanism is proposed here that changes that outcome. "An AI on a box under my desk" doesn't redistribute anything. It just means the rent extraction happens at a layer you can't see yet.

Rooting for the collapse of the US economy as a feature rather than a bug is a take that only lands if you already have enough money to survive one.

Right.

You'll just end up paying the 15-20% cut to the people who train the model and keep it updated and run the agents that you rent from them.

I just think this analysis is wrong from the start. The "proper" pricing structure, the one tracking the actual costs involved, would be that you don't get to talk to a human being at all unless you pay for their time. Human frictions are what allow no-charge customer support to exist.

Creating a closed source model and charging for it is not “rent seeking”.

A free market that is "properly priced" is a not a real state of existence.

Resource and information asymmetry, and the exploitation by the those with resource and information privilege of those without it has been present from the very beginning. A free market is just a tool (among many) to achieve a goal for a society.

For some, that goal is explicitly the concentration of wealth and welfare in very few hands. This is oligarchy.

For others, it's the advantaging the welfare and dignity of their "tribe" at the cost of welfare and dignity to perceived outsiders.

And for yet others, it is the advancement of universal welfare and dignity.

Neither a free market nor socialism gets you any of these. What gets you there are the shared narratives that utilize tools like free markets, regulation, and redistribution.

YouTube destroyed Hollywood's monopolization of entertainment. Anyone with a smartphone now has a shot at becoming a full-time creator. Prior to this, it was gate kept by Hollywood execs.

Smartphones destroyed Microsoft's monopolization of apps.

Not a leap to believe this will happen to some extent with AI (and it's already happening to some degree).

this will continue forever and no rugs, chinese or otherwise, will ever be pulled

we know that because the label on the rug says "open source"

In an LLM arms race, corporations will win bud, sorry.

Insane take for a bunch of reasons, the destruction of the US economy would necessarily entail the destruction of the world economy. Hopefully I don't have to explain why that would be bad. Furthermore, a ton of the "rent seeking" Citrini Research was discussing isn't traditional rent seeking but the cognitive services previously necessary. Software engineering, for instance, falls into that bucket.

It's going to be your bots vs theirs. Theirs will have more resources. Net result? probably fewer jobs and wealthier companies yet again.

Anyway, I remember that Google demo of making restaurant reservations. I believe it was scripted and had a human fallback. Little did we know that Google would drop the bag on the whole transformer thing that came out soon after. I wouldn't be surprised if it was some of the same people involved.

What the author is talking about isn't rent-seeking per se but a moat. The entire proposition of OpenAI is that they can build a moat and recoup the billions of investment. I'm not convinced that's true, which is part of the author's point, for some of the same reasons:

1. Cost of hardware and training and tokens keeps going down. We saw the same thing with Bitcoin mining. I wonder if we'll see ASICs enter the fray here too; and

2. China will make sure no one company owns this future. DeepSeek was a shot across the bow of OpenAI, Google and Anthropic. It is a national security issue for China.

Where I disagree is that this will be an end for the rent-seeking class. I think we're bouldering towards a dystopian future of even more wealth concentration where most people get displaced by automation and AI, which suppresses wages and ultimately leads to a situation where a handful of people have all the money and almost everyone else has no money.

[1]: https://en.wikipedia.org/wiki/Inclosure_act

[2]: https://medium.com/@jrcoleman97/the-hidden-origins-of-capita...

> Enter AI, the great equalizer of time.

I didn't read any futher: this article is dumb. If a company has the capability to hire literal people to waste your time, they can deploy more AI than you to waste the time of your AI.

Or they just use price to limit access instead of time. Which means you're totally SOL if you have time but no money. Pay to win, that game everyone loves /s!

AI doesn't flatten asymmetries, it exacerbates them.

2. Anthropic does not care about what models and hardware he is running under his desk.

3. When you look behind the cupboard—Anthropic is "rent seeking" on a level well above consumers.

4. I've got "AI safety" + "Capitalism" + "Military-industrial complex" bound together on my mental corkboard.

This is an oxymoron.

Giving functionally illiterate people computers with GUIs should be regarded as a mistake.