As we progress further into the AI realm, we have to dig into what is going to be the power basis going forward.
For years I wrote about how I am in the camp that the network-state will eventually replace the nation-state. This is a foregone conclusion in my mind due to the growing expanse of the digital realm. In other words, the network is becoming a centerpiece for society.
With that, it is important to mention I do not think this is something that is in the near or medium term. We are looking at a situation that is decades out. Perhaps we start to see the idea emerging on a larger scale towards the middle of this century.
This brings us back to the basis of power: the nation-state. It applies to the military, economy, education, natural resources, and population. The imaginary lines in the sand are not going away anytime soon.
While that is the probably case, few will dispute a world driven by the digital realm is becoming more likely. Each month, we see massive advancement. Whether we are focusing upon AI, robotics, or compute, all are exploding.
Thus we are left with the question, what is going to be the basis of power in the future.
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The Future Of National Power And The Role Crypto Will Play
If we are taking a nationalistic view, we can see how this all boils down to the fundamental unit.
I had already slated this article for today. However, there was a synchronistic event which supplements the central idea here. It is good to see things happening in real time.
Over the last couple years, we discussed the idea of data as the fundamental unit going forward. Everything is becoming tied to data, especially the military and economy. When it comes to the nation-state, these are two highly critical components.
Data does not operate in a vacuum. It has to be housed somewhere. Naturally, they are processed and stored on servers. But where are these located? Here is where we arrive at the major conclusions.
The source of national power, in the future, is based upon the data centers a country has. This is the fundamental unit of power.
If we break this down, consider the fact that, for a long time, manufacturing was the basis of the most powerful economies. This translated to the military since a country could build out whatever was required.
Under this scenario, the factory was the main unit. Countries that has the most factories, along with the advanced manufacturing techniques, were the leaders.
When dealing with the digital realm, we simply move from the tradtional to the AI fctory. At this point, we have the union of data (AI) plus robotiics. Of course, a key component in this is energy.
Project Stargate Announcecd
Donald Trump, along with some technology leaders, announced Project Stargate. This is a $500 billion venture between a number of different Big Tech giants looking to enhance the position of the United States with AI.
The project will entail a joint venture between Oracle, Open AI and Softbank with the promise of investing nearly $500 billion into artificial intelligence infrastructure over the next four years. Other partners also include NVIDIA, Microsoft and ARM— companies that have all been paramount to the significant AI boom in recent years.
What is interesting is the fact that Trump alluded to the same premise we are describing here.
Exact details around the project, the plans and the vision forward are yet to be announced. President Trump explained that one of the primary goals of the project is to build data centers and the means to generate the copious amounts of energy that will be required for AI advancements:
He hit upon the two key components.
Countries need to radically expand the number of data centers they are operating. These are the "factories" of tomorrow. It is, thus, closely tied to the energy production required to power them.
This is the basis of the economy. It is also where military domination will come from. We have AI driving robots, drones, and other UAVx. This is in addition to cyber-warfare, something that will be driven, in part, by AI.
Cryptocurrency Is A Big Player
As stated, I do think there is a link between cryptocurrency and AI. The two are not going to be separated in the future.
Crypto is the monetary system for the digital realm. It is native to the Internet. This was one of the omissions from the original protocols.
This means we are not only dealing with a medium of exchange (stablecoins) but also a value capture mechanism. The result of this is, as AI generates larger amounts of economic output, the value is positioned in the coins and tokens. As this occurs, we have a financial basis to fund future AI and robotic endeavors.
There is another side to this.
We are not looking at a future where massive amounts of compute are centralized. If we project out, we see inference as a bottleneck waiting to emerge. AI systems have to run somewhere. Eventually, things are going to operate on the edge.
Finally, we have the ability to incentivize activities. This is crucial for the creation of start ups along with community actions. A new paradigm could form where crypto incentives are the basis for further AI development. It might apply to data generation, infrastructure, or something we cannot even foresee at this time.
One way I look at it, if the market cap on the entire tokenized market is $50 trillion, could that fund a project similar to Startgate? To me, this is certainly something that could be leveraged for more expansive buildout.
To finish with one final thought: another step up the scale will be data centers in space. Perhaps that will be the basis of an article in another year or two.