
Derek Thompson
21.7K posts

Derek Thompson
@DKThomp
Sign up for my new newsletter! (Link below) Also: Co-author of Abundance, host of Plain English, and contributing writer at The Atlantic.



@DKThomp The two pillars of @pkedrosky's argument are fundamentally flawed. 1. "Orchestration improvements have driven capabilities, rather than model improvements". Wrong! Claude code/Codex are really good now BECAUSE of model improvements. This whole idea of investing at the orchestration layer is a lack of understanding. Yes there are innovations there, but most of the improvements are from models getting smarter at regulating their own state & exploring their environment NOT from harnesses 2. "Outside of coding, knowledge work is token compressive. so it creates less tokens than more" Wrong! Even in engineering many times the hardest things are not writing MORE code. it's making hard decisions. It can take a HUGE amount of tokens to eventually write 2 lines of code because of the work in planning, iterating, validating etc. The whole quote of "sorry I wrote such a long letter, I didn't have time to write a shorter one" applies here. In other domains, and we run agents for accounting, the work is extremely token intensive because you are paying people like Basis for accuracy and competency and as models get smarter you can spend order of magnitude MORE tokens to reach a decision or take an action that is good even if that action itself is few tokens.


@DKThomp NOT THE TOURISTS!

I'm going to make some obvious points. (1) Blowing up all the oil infrastructure in the Middle East is an insane idea, and may well result in a global economic crash and humanitarian crisis unrivaled in the lives of those now living. We're talking about the price of everything everywhere rising, from food to gas, at a moment when inflation was already high. All of that will be laid at the feet of the authors of this war. (2) The antebellum status quo of Feb 27, 2026 was just not that bad, but we're unlikely to return to it. Expect indefinite, long-term, ongoing disruptions to everything out of the Middle East. (3) Also assume tech financing crashes for the indefinite future. The genius plan to get the Gulf states caught in the crossfire has incinerated much of the funding for LPs, for datacenters, and for IPOs. Anyone in tech who supported this war may soon learn the meaning of "force majeure" as funding gets yanked. (4) Many capital allocators will instead be allocating much further down Maslow's hierarchy of needs, towards useful basic things like food and energy. (5) It's fortunate that all those progressives yelled about the "climate crisis." Yes, their reasoning about timelines was wrong, and much of the money was wasted in graft, but the result was right: we all need energy independence from the Middle East, pronto. It's also fortunate that Elon and China autistically took climate seriously. Now they're going to need to ship a billion solar panels, electric vehicles, batteries, nuclear power plants, and the like to get everyone off oil, immediately. (6) It's not just an oil and gas problem, of course. It's also a fertilizer problem, and a chemical precursor problem. Maybe some new sources will come online at the new prices, but it takes time to dial stuff up, particularly at this scale, so shortages are almost a certainty. That said, China has actually scaled up coal-to-chemicals[a,c] (C2C), and there's also something more sci-fi called Power-to-X[b] which turns arbitrary power + water + air into hydrocarbons. But all of that will need to get accelerated. I have a background in chemical engineering so may start funding things in this area. (7) Ultimately, this war is going to result in tremendous blame for anyone associated with it. It's a no-win scenario to blow up this much infrastructure for so many people. Simply not worth it for whatever objective they thought they were going to attain. But unless you're actually in a position to stop the madness, the pragmatic thing to do is: scramble to mitigate the fallout to yourself, your business, and your people. [a]: reuters.com/business/energ… [b]: alfalaval.com/industries/ene… [c]: reuters.com/sustainability…

Billy this is Deshaun Watson. We gave up 3 first round picks for him and he makes $230 million fully guaranteed. His defect is that he’s really bad at playing quarterback

We're excited to announce 'The Situation Room' by Polymarket is coming to Washington, D.C. The world's first bar dedicated to monitoring the situation. 🧵

Wow. Anthropic is eating OpenAI’s lunch in the enterprise


New newsletter: The transcript of my AI bubble conversation, with @pkedrosky. Feat.: - Why did the Mag7 equity miracle suddenly stop? - The growing private credit crisis, explained - Why the enormous revenue boom from new agents like Claude Code might be a sugar high, in which explosive revenue growth today precedes much slower revenue growth after AI adoption among software engineers peaks - Where equity value is flowing if it’s leaving software - Why US productivity seems to be rising but actually isn't derekthompson.org/p/yes-ai-is-a-…





New newsletter: The transcript of my AI bubble conversation, with @pkedrosky. Feat.: - Why did the Mag7 equity miracle suddenly stop? - The growing private credit crisis, explained - Why the enormous revenue boom from new agents like Claude Code might be a sugar high, in which explosive revenue growth today precedes much slower revenue growth after AI adoption among software engineers peaks - Where equity value is flowing if it’s leaving software - Why US productivity seems to be rising but actually isn't derekthompson.org/p/yes-ai-is-a-…

Two big reasons for this: 1)Trump said he’d fix economy on day 1; 2) voters think Trump is doing everything BUT focusing on the economy.




