Blain’s Morning Porridge 23rd Jan 2025 – Peak-Musk, Stargate, Silk-Roads and the New Morality. Three days of Trump.
“I realize what is great for the country isn’t always what’s optimal for your companies.”
The Trump Presidency is not short of surprises. It will generate all kinds of consequences. The first is we’re approaching Peak-Musk. Expect to see the battle between Musk and Sam Altman of OpenAI get brutal. That Trump is transactional is no surprise, but how will supporters consider his meme-coin monetisation of power?
I nearly used “Who will rid me of this troublesome priest”, as my opening quote this morning… but Sam Altman’s snipe at Musk yesterday was just too delicious not to use.
We are just a few days into Trump’s second presidency and although nothing should surprise us, it’s hard not to be shocked. There have been more than a few King Canute moments. Unlike Canute – who told the waves to stop to embarrass his sycophantic court – Trump seems to believe he and his cabinet of yes-men can marshal “the vast powers at [my] disposal to defeat what was record inflation and rapidly bring down costs and prices.” It sounded great… but how?
One way he will do so is by slashing energy prices through his “drill, baby, drill” policies. If he can flood the US with new fossil fuels, the prices will drop, but at the cost of knocking out marginal producers across the states as prices fall below their production costs. Demand and supply tend to balance. The Department of Government Efficiency will make lots of noise – and putting a few DEI staffers on paid-leave will reduce costs… not a jot.
Signing lots and lots of executive orders in public has provided some fantastic moments for MAGA voters to go into raptures about. What has been hidden are the emerging fault-lines between MAGA, the Libertarians, Billionaires and Tech Bros wings of Trump’ s MAGA. There are tensions – and Trump is happy to let them fester and develop. If his court are fighting each other: Bannon vs Musk, Musk vs Altman, Evangelicals against the Church… then they aren’t a threat to him.
But already there is “stuff” that matters – not just the noise of the old king’s second coronation.
We may have already witnessed Peak-Musk.
The $500 bln Stargate Programme (wow.. who remembers Stargate?) to accelerate AI across the US – with OpenAI, Softbank and Oracle at its core – might be a stroke of genius from Sam Altman, once-deposed-again-leader of OpenAI. He’s handed Trump a platform on a plate to demonstrate his vigorous leadership of the Tech Sector– using the stroke of the Executive Swifty to encourage AI to “electrify, baby, electrify” and “fund, baby, fund” to put the US at the core of the new industry, and ensure it harnesses the quantum leap into Artificial General Intelligence (“AGI”) – the emergence of which will leave AI firms looking like the horse and cart. Altman and his team believe it’s just around the corner!
Altman has also proven himself the perfect courtier: “We wouldn’t be able to do this without you, Mr President”, he said at bended knee in front of Trump’s throne. In return Trump is happy to cut through the power, land and other constraints that threaten to hold back AI run out. Apparently, the Stargate project has been in the works for nearly a year – and also involves Nvidia, Arm and Microsoft. At its core is Altman, Larry Ellison of Oracle, and Masayoshi Son of Softbank – a mix of AI brains, logistics and the money.
But notice who is missing.
Musk is said to be furious. He’s all over X like a slapped wasp talking it down, and quite rightly asking where the money is going to come from – suggesting they don’t have even $10 bln to invest! Masayoshi Son knows the money will be plentiful with Trump’s backing – he’s already lined up Gulf money into the project.
Altman’s riposte to Musk was classic: “I realize what is great for the country isn’t always what’s optimal for your companies.”
Musk and Altman “dislike” each other. Musk is said to be incandescent Altman is regarded as the brains and smart money of the AI sector – which will completely dwarf in scale his laudable successes in EVs and the Space industry. Stars rise and fall.
And that is Musk’s deep-seated fear – that someone else is smarter than him. When he call’s Altman a “paedo” you will know Altman has won. If Trump is listening to Altman, then he isn’t listening to Musk… How much longer will embarrassing Uncle Elon be hanging around the family? He’s becoming embarrassing, and claiming too much credit. Trump would never, ever, give a mock Nazi salute.
And if Altman is whispering honey into Trump’s ear, and suggesting that for the USA to be truly great again, it not only needs Fossil-Fuel energy, but the best in renewables, nuclear and new power… then would that be a bad thing?
The Age of Musk is over. The Altman Era has begun. Tesla is being valued as an AI driven firm – yet its not part of the future? Is it time to cut that long in Tesla?
Presidential Pardons lay out the new morality.
Other inconsistencies in Trump’s opening days are mounting. He has threatened Mexico with crippling tariffs if the Government doesn’t stop drugs, declared the cartels to be terrorist organisations, yet he has also freed the scumbag/convicted felon person who enabled the commercialisation of the internet for drugs distribution and cybercrime. On Tuesday Trump pardoned Ross Ulbright – a self-described “enterpriser” who created the Silk Road market for illegal goods; from drugs to guns, hacking equipment, stolen passports and credit cards, and data on vulnerable people to target financial fraud upon – even as site to hire hitmen.
Silk Road was pivotal role in creating the unexpected and unforeseen niche that triggered Bitcoin’s growth. Ulbright’s moment of genius was to spot how BTC could be used as the medium of exchange on the site, solving the issue of how to anonymously transact for goods and services online, and outside the oversight of banks and the authorities. Bitcoin suddenly found the problem it had been looking to solve since its inception – enabling criminality! Ulbright made his money skimming fees and commissions of the website, and personally broking deals on it.
Two things happened:
- Without the dark-web creating a use-case, Bitcoin would have remained a very interesting, very clever, but utterly pointless experiment in non-cash payment systems. Better payment systems exist – but are not anonymous!
- It enabled and illustrated the Libertarian myth that money should be free of government oversight, and free to enable entrepreneurship.
Ulbright was arrested by the FBI in 2013 after an undercover sting. He was incarcerated for conspiracy to commit drug trafficking, money laundering, hacking and fraud. They built an impressive case against him, and investigated rumours he paid for up to 5 “hits” against rivals.
One man’s scumbag drug-dealing conman is another’s business hero.
Trump pardoned Ulbright as a Libertarian hero, saying “the scum [the FBI I guess] that worked to convict him were the same lunatics who were involved in modern day weaponisation of government against me.” He called Ulbright’s Life + 40 sentences a ridiculous example of government over-reach. Let’s figure that out; stopping crime making American “entreprisers” rich is over-reach? Does that mean American businesses taking over the Sinaloa Drugs Cartel can expect government protection if it’s now an American business?
Why not? There is a new morality at play in Washington. Invest accordingly. Trump loves Libertarians.. and Libertarians’ believe it’s fine to strip morality and ethics out of the prime objective – making money.
Prepare for kickback on $TRUMP
The extraordinary amounts of real and paper cash Donald and Melania have made front-running the inauguration through the launch of $TRUMP and $MELANIA meme-coins are beginning to hit the US mainstream media. Questions are being asked. Trump and his associates (who own 20% of the coin, Trump the rest) floated 200mm coins on Saturday morning, selling them up to $79 and they now trade at $38. There are a further 800mm coins that vest to Trump et al over the next three years. They are not backed or secured on anything. Just the name.
Crypto insiders know meme-coins have zero value except for what greater fools will pay for them. Experienced crypto traders are trading the Trump coins on the basis Trump/MAGA supporters will continue to buy as Trump’s star rises. Critics of the whole crypto flea-pit are amazed at the brass-neck of Trump’s naked money grab – raising the whole issue of worthless NFTs and similar.. who care, the market in speculative BS has no memory.
The crypto bros know Meme-coins and $TRUMP have zero intrinsic value. Do the buyers know that? The noise so far is light. On the sidelines we have Trump critics howling into the gale about it being “dictator-level corruption” (Anthony Scaramuci) or Coinbase’s former execs calling it a lottery. Eventually someone is going to score points against Trump on his naked greed and how he monetised his presidency.
Thus far Trump supporters seem happy… they believe $TRUMP is a proxy for the success of their candidate. As Trump’s genius is shown in Making America Great Again, then the coin will continue to rise… But all stars set when the sun comes up, and the Mid-terms come. As Trump becomes bogged down in reality and the coin is seen to tarnished gilt.. how will the holders who thought they were buying the dream react?
But that’s the point… in a land were drug-dealers are lauded as entrepreneurial heroes, where the naked pursuit of wealth is a virtue, and calling out a troublesome priest are seen as strength… This is the new morality….
Out of time, and back to the day job…
Bill Blain
Author of the Morning Porridge
