
By Milk Road AI
Date: October 2023
This summary unpacks how exponential tech like AI and blockchain are driving the marginal cost of everything to zero, creating a world of abundance. It's for investors and builders navigating the coming decade of disruption and opportunity.
The world is on the cusp of an "economic singularity," where the marginal cost of goods and services approaches zero. Salim Ismail, founder of Open XO and co-host of the Moonshots podcast, explains how AI and blockchain are accelerating this shift, presenting both Star Trek-level abundance and Mad Max-style disruption.
"We have about a decade of really messy transition between going from scarcity systems to abundance systems. Once we navigate that decade, we'll be fine. Then you really don't need money going forward."
"If you have an AI alone doing the diagnosis, you start at 88% accurate. What does that tell you? That tells you we should be just eradicating all human doctors and giving it straight over to AI because the AI is better than a doctor with an AI because the doctor brings all their personal human biases."
"The problem with we have in humanity is our emotions are paleolithic, essentially a lizard brain, our institutions are medieval, and our technologies godlike."
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We have about a decade of really messy transition between going from scarcity systems to abundance systems. Once we navigate that decade, we'll be fine. Then you really don't need money going forward.
What's up everybody? It's LG here and welcome to Milk Road AI, the weekly AI show that wants you to keep your day job for as long as you can, even if it means pretending to be a 100 different bots on the internet. Today is February 16th, 2026. We're recording this a week in advance because our guest is just that popular. Before we get to him, I have a message for you.
Every single civilization gets a moment where the traditional rules stop working. We're living through ours, and most people don't realize the game has already changed. Our guest today believes we're living through both the Star Trek and the Mad Max versions of the AI future, and he's here to tell us how to prepare for both. We're welcoming back Salim Ismail, founder of Open XO and co-host of the Moonshots podcast with us to break those down.
Today's episode is brought to you by Bridge said stablecoin payments instantly simple global friction free and some turn crypto tax chaos into confidence. So Lim, welcome back to the show man.
Great to be here.
Okay, so let's get right into it. One term that you throw around all the time that I think is really valuable and we talked about this with Dr. Alex two weeks back is the economic singularity which is the idea that the marginal cost of everything like energy, health, transport, all that is going to go to zero. Selium tell me how that shapes out over the next couple years and what is wealth going to mean in that world.
So there's a lot of discussion about this topic importantly now because it's becoming more and more relevant. In 2014, Jeremy Riiffken wrote a book called The Zero Marginal Cost Society. And he basically said, "What's going to happen is capitalism is becoming so successful at dropping marginal cost, the cost of most things are going to go to zero and it's going to essentially eat itself. And then we need a postcist type of society. What does that look like? Nobody really knows because it's been the dominant mode of discourse in the world for the last few hundred years."
And so the discussion around the economic singularity is what happens when that when we get to that point and there's a lot of different angles to take on this. One is fiat currency versus crypto, the gold floating off the gold standard. There's the inflationary aspect of fiat currencies, the deflationary aspect of technology. So there's a bunch of factors combining, but it looks like we're going to hit these points fairly quickly, mostly driven by the fact that the cost of energy is dropping.
And when you drop the cost of energy radically, then lots and lots of other things become lots of other dominoes fall. So navigating that is the tricky part.
So what does that look like? Like when the cost of energy drops, when does that happen? And what what are the effects that we're going to see like in our daily lives or even I don't know in the stock market or where do you see the effects of this happening?
So right now when you look at the AI stocks, they're limited by how much energy they have access to. And so open AAI is doing very well because it's spent a lot of time and effort securing energy future over the next 3 to 5 years and so they've been locking up energy sources wherever they can. Other people are bringing energy sources online as fast as they can.
Look at for example Fermy Energy which is an energy generation project out of Texas large man-made energy project ever intending to produce deliver 12 gigawatt a year over like a dozen years. They formed one year ago and they went public in August or October at a 17 billion valuation.
Okay, just what's the name of this company? Who's this?
It's called Fermy America.
Okay, f R Mi Fermy heard of this. Just consider that for a second, right? That they went from zero for incorporating the company to a $17 billion valuation in like 10 months. Now it's down dropped a bit, but the just the fact that you have that many zeros behind it is unbelievable.
So that's the that's the inner loop, right? Once you can get access to energy, energy turns into data center compute which turns into AI and then that starts dropping the cost in all sorts of domains. So that's why people are valuing this so much. When people talk about the AI bubble, we don't see a bubble at all. In fact, we see the absolute opposite.
If you have a chip, a blackwell chip, it is used instantly. And so there's no excess there. It's really really just how quickly can we bring energy online? is we bring our energy online, we get intelligence and then we use the intelligence to drop the the marginal cost of more and more goods and services. So that's the spiral that we're going through right now.
And then and so then how does that translate into our everyday lives? Like how will how will that change for me in the next 5 years?
So let's take two domains. Let's take education. Let's take healthcare.
Okay. So if I'm doing if I'm interested in education, the cost of education will fall to exactly zero over the next 3 to 5 years. You can already get almost any course online for free, right? But imagine in the next 5 years you have, let's say you have kids. I have a 14-year-old, right? the cost of any education will be a customized AI looking at your child and saying here's grade seven mathematics for that child and that'll be about an hour a day because that's all they'll need.
Then what do you do with them the rest of the time is the really big question. And so the we have really good evidence that a child with AI is learning at about five times more effectively the same amount at five times less time today. We have evidentiary basis for that.
So because sitting in a classroom you end up with the lowest common denominator. You're teaching for the weakest kid in the class. The stronger kids are bored out of their minds, right? And so when you have an AI that custom navigates your particular learning style, is it auditory? is a visual. What's the ability? Do you have a huge ability in mathematics but weaker in English?
It knows exactly the level you're at and constantly can test you just past your level. You're learn at a very compressed rate and a very accelerated rate. Well, that completely changes education.
In the US specifically, look at the entire cost of secondary post-secary education. The entire university industry and college industry essentially breaks. And so that implication is massive student debt which is used to indenture students today in the US that disappears. So what do you use to enslave the younger generation? You know all sorts of questions come up.
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Send them outside man. Let get them to learn some hard skills. Back to the basics. You know how to build a fire, that kind of stuff.
There you go. Go chop wood. Right. That's it. one hour of a hard AI calculus and the rest of the time you're you're you're climbing trees and weaving baskets or something. I don't know something something that I wish I had time to learn.
Yeah, exactly. Baskets part.
Okay, let's bring this back to the finance world. You've also you you've predicted like basically a massive corporate collapse maybe even sometime this year and that there will be a massive reskilling of the workplace. I would love for you to take me through how you see that happening in such a short-term time frame and what that looks like for like the stock market like what actually happens.
Well, we've already seen it, right? I said this back in November when I was last on your show, right? What just happened last week that the SAS world collapsed, right? We had a 20 30% collapse in in the stock price of major major massive companies. That was one on the Moonshots episode maybe two three episodes ago. We showed a tombstone of all the code generation companies, right? Cursor, Replet, whatever, who've raised hundreds of millions of dollars.
And then Claude Com code comes out and essentially wipes them all out in two seconds, right? Just in the last two weeks, we've had Clawbot come out or what is it called now? E-claw or whatever. And that is totally surreal and kind of freaking everybody out. I think is they're making a mountain out of a molehill for the moment. But the long-term vector is becoming undeniable that essentially software generation goes to zero.
If software generation goes to zero, what is what are you paying for when you're paying for SAP or Oracle financials etc etc. So the legacy systems houses will have a huge challenge. Now I think what'll happen is they'll incorporate AI very effectively. So they'll do better than the most. But if you're a startup trying to break into those ranks, you'll have a hell of a tough time doing it because you never know.
You'll raise $100 million and then all of a sudden GPT or Claude or Gemini comes along and just like wipes you out without even blinking. And now what do you do? So there's going to be what the the chaos I think is going to be the dominant dynamic over the next few months.
Like right now, how do you dare invest in an AI startup? Like how do you even think about that given the pace of change that it could be irrelevant in a week or two weeks or two months or two years, right? Not only could it be, you're damn near sure it will be irrelevant in a very short order. So the time for that startup to get going, get market traction and have an exit or an acquisition is huge. So massive issues here.
So the the this is going to hit the it's hitting the public market in the stock in the stock world, but it'll start to move to other sectors of the economy. I mentioned education. Let's just touch on health care for a second, right? It's also clear today we can have a doctor AI.
So when you go to the doctor, you get the right diagnosis today about 74% of the time. So three out of four visits you get the right diagnosis. One out of four they get it wrong. Okay? When you take a doctor and give the doctor an AI, the doctor gets it correct 76% of the time. Okay? Better but only incrementally better.
If you have an AI alone doing the diagnosis, you start at 88% accurate. What does that tell you? That tells you we should be just eradicating all human doctors and giving it straight over to AI because the AI is better than a doctor with an AI because the doctor brings all their personal human biases. They don't know the latest drugs. They think they know but they really don't. All of that comes into play.
So now when you can give a and it'll be free obviously. So in this year I will predict that we'll have a a bunch of AI doctors appearing for free in the app store. Okay. Now when you have that and you can do diagnosis for free, well prescription becomes very easy, right?
And over the next two, three years as we get prescription personalized to us and I can have some manufacturer do a personal diagnosis of my genome and my multi microbiome and all my connetos etc. and then print out the pills that I need for my condition with the dosages all built in. This completely changes healthcare and it'll take healthcare down to near zero.
Now this has a bunch of effects. One is all the corporate actors in that world are severely dented but GDP drops pretty dramatically. Okay. So in the US healthcare is 20% of GDP right? So this is where GDP is a really bad measurement for the economy because if you say solve cancer GDP drops because you're not spending that money. So now what do you do?
So this is the difficulty with fiat currencies and with the current system that we have that's all predicated on economic growth of of the current system and the current system is not designed for deflationary technology. So I could delve into this a bit more because this is a really important point because it speaks also to why crypto and Bitcoin are such a big deal. But this is the future we're looking at right in front of us.
I want to pick on something that you said here and and that you're kind of alluding to and you're talking about the deflationary effect and you're telling me that I'm going to have apps in the future that are doctor apps that are basically free so I won't have to bother with paying for a doctor or specialist or I mean in Canada I guess I wouldn't have to wait to the emergency room for for 3 days for my twisted ankle but just as a small point there 40% of ER visits are unnecessary not really emergencies you can tell there so right there you could save a massive amount of money and make the system much more effective.
So, but if it's if it's 20 but if it's 20% of GDP, there will be people and companies that inevitably want to monetize this. So, how how do how do countries how do the wealthiest people in the world? How do they balance that? Because that 20% of GDP like that's a lot of money for a lot of people every year, man. And they do are not going to go down without a fight. And yet it feels like it's kind of the same people who are also saying like, "Oh, well, we just got to turn over the keys to all these AIs." Like, how does it how No, but really, how do the financial elites manage this whole change? That's that's what the people that the people that actually pull the strings. Like, how does that how does that even work? Because you talk about deflation, but that's profit and that's what they live on.
Huge big big big problems. So, um they are not very happy campers right now, right? If you're the CEO of a big SAS company, you are freaking out right now. Not because you think you're really damaged or that that the clawbot may really take over, but the the the perception that it could wipe you out is just damaging your stock radically. Okay. And and how do you recover from that perception is the biggest the hardest part.
But if you take say health care specifically, if you're a doctor network in the US and you're spending millions of dollars with with in doctors, let's just take medical education, right? you I'm a I'm a Har I'm a doctor I'm a hospital training facility and I'm training doctors I'm a medical school I'm Harvard medical school and an AI is doing a 20 to 30% better job at diagnosing any condition than the best training I can give okay you're that's an existential threat right now what do you do you this is what I call the immune system response when you have a disruptive idea in a legacy environment the antibodies come and attack you.
So for example if Few years ago, the state of Texas banned tele medicine. The doctor's lobby won and said, "Well, even for a little mark on my hand, I have to go to the doctor. I can't do it over a screen ever." Right? So, that's the immune system winning. That's the legacy. That's what we call regulatory capture. Okay? Which is what's happened to the finance world, right? That's why the crypto banks are being attacked in the US.
So the the that'll sustain for a little while, but it can't hold over time because the reality over time will just hit you and you have to deal with it. So what they're doing is they're just slowing it down as much as possible and that's what we'll see happen. We'll see drag out. The FDA will be asked to slow it down for the benefactors or the the donors in that in that realm and see where it goes.
This will be a structural problem. We've seen this already play out. I I'll give you an example, a macro example of the full arc of this transition and that'll give people something to at least anchor around. Take music. Okay? And the arc that I'm talking about is scarcity to abundance. Okay? That's the arc.
If I have healthcare delivered by an app for free, that's abundance, right? I have an abundance of healthcare. Right? Now, I have a scarcity to healthcare. You go to the emergency room in Canada, you're waiting for hours because there's one doctor per 45 million patients, right? And so and and in and in third world countries and emerging markets, it's even worse. They literally have a doctor per 100,000 citizens in the country and how do you navigate that? So they've got scarcity up the yin-yang.
We saw this transition fully, that full arc happen in the music world. So in the music world used to have seven or eight major music studios selling the cassette, the DVD, the CD, selling scarcity as a product to the individual consumer, right? 20 bucks an album or 20 bucks for a CD or a cassette or whatever. Then Napster came along digitized music illegally and then we did it properly and we legally digitized music and now you have two platforms iTunes and Spotify selling you an abundance of music on a subscription model. Okay.
So the physical product scarcity goes to a digital abundance subscription model and that's the arc that we'll see. We expect to see that happen in energy and in healthcare and in education and in any domain you care to pick. Transportation, look, it's clear we're going to go from owning a car to accessing a car and paying like 20 cents a mile for an autonomous car to drive us around. Okay?
Rather than the several dollars a mile it costs us today to move around, owning a car, insurance, all of the registration crap that goes along with it, etc., etc. So that as we start to see that arc hit more and more domains, the seven or eight music major music studios have to change their business model when this happens. Right now you're only left with two incumbents. And you'll see the same thing with autonomous taxis and with all sorts of other environments including healthcare, including education. And so how to navigate that becomes a huge challenge.
Now this becomes a monster issue. It'll happen first in the less regulated environments because easier to attack. There'll be massive protectionism in the financial sector, healthcare and others like we have seen already, but over time that'll just get washed out. When I talk to bank CEOs, they're like, "Wow, we hate the regular. It's a nightmare dealing with the regulator." And I'm like, "Are you kidding? That's your best friend. They're keeping they're keeping the startup hordes at the gates. Otherwise, you'd be wiped out in a week."
So that that transition is going to happen and it's going to be a very unpleasant one depending on the industry you're in. I do want to ask you about those regulators. But first, you did touch also on Bitcoin and the finance world and Agents. That is definitely like on our other channels where we talk about crypto. That's definitely a big narrative that I honestly think we haven't done a good job of tapping into is this idea of Agents, millions of Agents doing microtransactions.
And you've seen this like mult book trend online the last couple weeks. Whether it's real or not doesn't matter. It's still preview of like this is what Agents will be doing or maybe are doing right now and they're using the the optimal technology for that seems to be blockchain. Is that something where you see do you see that trend totally accelerating and becoming a reality?
Yes. And it's worth talking just now about the Byzantine general's problem, and I don't know to what extent you've ever covered that on on the thing, but are people are your listeners aware of that?
Tell us about it again.
Okay, so the core innovation in blockchains, okay, is a very old computer science problem called the Byzantine Generals problem. It's actually the story of Constantinople in the 15th century. It turns out there were eight generals circling the city trying to coordinate an attack, a siege. uh and they were sending messages around that little network. Who's going to go first? What town are we going to get in? Uh go how how are we going to get in etc.
And the problem they had which is why it's called that the name is that one out of the eight generals was a traitor and could send the wrong information u uh blow the element of surprise blow the whole operation right um and in computer science terms that's become known as the Byzantine general's problem. And on a computer science perspective, from a networking perspective, the challenge is how do you send a secure, trusted, authenticated message over a network when you don't trust the network, right?
Really hard problem. 40 years of computer science PhDs have been trying to crack that problem without success until the blockchain. And on a blockchain, because of the distributed ledger technology, um, you can send a secure, trusted, authenticated message. If I send you a message on a blockchain, you have a 100% guarantee that it came from me, can't be revoked, can't be double entered, etc., which is kind of like a magical thing in a digital world.
So, what blockchains do is allow you to decentralize authentication. Okay? And this has very profound ripple effects. And very few people even in crypto understand how broad this goes. The today all the centralization happens retail banking. Well, all a retail bank is is a centralized ledger saying you deposit a,000 bucks and I lent it over there. Right?
If I can decentralize the ledger at a much lower cost with the same authentication, I don't need the retail bank, right? So, I give retail banking like three or four years before it gets severely damaged. Okay? If you're a banker, you're like, what what the hell do I do with all my banking people, right? And so, that's a massive challenge coming and there's no way of stopping that because the technology is just that much better and cheaper.
But it ripples out to all sorts of areas. Intellectual property, a a university degree, some body at credentiing that yes, you've studied for four years and test passed the exams. Government does a whole amount of authentication saying, "Yep, you own that land title. Yes, you have a fishing license. Yes, you're 18 years old, etc." So, when you can decentralize that, the cost of running government will drop very, very dramatically.
A few years ago, I was asked to give a talk at the in the US to the Republican National Leadership Conference, okay? And the and we went back and forth with the speaker of the house who Eric Caner at the time. What would the title of my talk be? And I was like, "Are you sure you have the right person cuz I'm not sure you know you really want me?" And they're like, "No, no, one of our donors is one of your Singularity alumni. He's insisting." We're like, "Fine."
And the title of my talk that we settled on was how do you drop the cost of government 10x within 10 years which you could do okay with AI blockchain etc etc. Um we it the whole thing broke down because I said well that's great but then you have to get your people to embrace technology and they said we can't do that we're Republican and so so that was the end of that conversation but the the the technology is happening. You can't stop the spread of technology.
And I go back to Jeremy Riiffken's point. Better and more effective technology that makes things cheaper can be slowed down for a while, but it can't be stopped. And over time, it's just going to come along because we just we all would take on what's best. And uh this means massive pain for the quite a few verticals where you have regulatory propping it up for the moment.
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So, we've talked a lot about we you mentioned a few times I love your white blood cells analogy about uh the new you know kind of attacking the new system and how it eventually breaks through and that's kind of you're telling us again outside of the incumbents for all of these industries sim like for healthcare and for for finance and for all transport all this different stuff outside of the incumbents that are you know today today's record companies let's say what is the biggest point of friction preventing all Outside of all of that, outside of all that, like is it is it going to be people? Is it policy? Like what is the biggest what is the biggest thing slowing us down besides the forces the forces clinging to what the system they've built outside of those forces? Or is it is it individuals who are just not going to be able to accept this? Is it policy? It's going to be way too far behind. What's what's
So, let me speak to this at at three levels, okay? Uh four level. individual, you've got the company or organization, you've got the institution. There's like three or four levels to this. So, you have people that have individual blockers, right? They their amigdala freaks out and they see anything new and they freak out and they go, "Oh my god, autonomous cars ban the car. The car might kill somebody, right? Because people don't want to be killed by robots. They'd much rather be killed by drunk people." Which my colleague Brad Templeton jokes about all the time.
We are not responsible drivers of two-tonon cars moving at high speed, right? Uh, for your viewers, if they're old enough, about 15 years ago, there was a Blackberry data outage around the world, and for about 3 days, nobody could send Blackberry messages like anywhere for 3 days. The I remember seeing a statistic, the accident rate in Abu Dhabi dropped 40% those three days. Okay? Because people couldn't text, they couldn't drive, they couldn't text while driving, and the accident rate like literally a 40% drop. Okay?
That just tells you right there people should not be driving, right? Okay. Now, that's the individual immune system because people go, "Oh my god, new technology." And this is related to a very old amygdala that we have at the back of our brain, right? We have this little organ. I can't remember if I talked about this last time, uh, but we have this little organ at the back of our brain that's scanning for danger. It's a survival mechanism we evolved when we were running around the plains of Africa.
If you heard a noise in the bushes, you ran because bad news could kill you, right? Good news doesn't kill you. If I missed a piece of good news, I might miss some fruit that I could eat. So, we are hyper sensitive to danger and negative news. When we come across something new, we relate to it as unknown. We relate to it as dangerous and therefore ban the autonomous car, ban the humanoid robot, ban crypto, ban whatever. Okay, so that's the individual immune system. Okay.
Then you get to the organization and the organizational immune system is the collective process frameworks, KPIs, etc. And the challenge there is that all every organization in the world is geared for two things. And this was first identified by John Hegel and John Celely Brown. All our organizations are geared for efficiency and for predictability. Okay? If you're McDonald's, you're trying to deliver the same burger and the same quality in a million locations around the world.
Health care system, you're trying to deliver that many operations per day out of your hospital beds, etc. Whatever it is. But today with the volatility in the world, that doesn't work. You need to be architected for agility, flexibility, adaptability, speed. Okay, which is what the exponential organizations framework helps deliver, which is why I've been chasing that around for the last decade or so.
Then you get to that's the immune system of the company. So in any big company, you try anything disruptive, everybody goes, "No, we can't do that." And there's like hundred reasons why they'll say, "We've tried it before. Uh we don't have the budget. Uh we or we'll try it next quarter because our parties are slammed." There's like 50 reasons I have on a big list. The third level of immune system is the institutional immune system.
So, healthcare has a bad immune system. You try and get the doctors to update, they're like as a body, they'll go, "Well, that can't be right." And a could never do a better job of diagnosis than I could because I'm the expert, right? Um, you have um the education. God help you if you're trying to update academia, right? And in the worst immune system I've seen is religion, where they'll literally kill you if you don't adhere to the religion. You don't want to provoke the religious immune system.
And so every organization in the world, journalism has an immune system. For 25 years, people are saying to the journalism world, you you the business model is broken. You have to update the fact classified as which used to support the newsrooms. That model is breaking. And they'd all go, "Yep, yep, yep, we're working on it." And nothing was done for 25 years and now most newspapers are getting wiped out.
And so you have the institutional immune system which is like hardest and the most gnarly because it's baked into the collective group think of that um that world. Uh the probably the weirdest phone call I've had in the last 15 years was from the Vatican. Um they called up and said, "Look, the Pope Pope Francis was trying to change the church. His immune system is 2,000 years old. Can we have you come in?" So I did a workshop with the top 80 most senior leaders at the Vatican, right? uh which had some interesting conversations around this.
One of them which we brought up was like we said look we have life extension coming and we're going to be radically expanding human lifespan right your business model is to sell heaven now how are you going to sell heaven if people aren't dying right that's going to be a challenge and so that yielded some rich Italian swearing coming back at me um so you have this kind of different levels of immune system at the corporate level at governmental level uh any legacy in public sector the existing policy is the immune system right we have taxis is fighting Uber. We have bankers fighting Bitcoin. We are not progressing society enough.
So we've spent a lot of time in our open exo ecosystem solving for those immune system responses and we solve for big company immune systems and we solve for public sector immune systems. We know how to solve for the institutional ones. We just haven't done it yet. But we know what to do.
So a lot of this, you know, I will say I'm a little bit in the scared camp to be honest with you because I'm definitely scared of the unknown and I've always been a very open curious person. Uh part of me is as much as when I'm frightened or hesitant, I'm like, I'm just going to jump without really knowing, I'm just ready to do it. I'm a I'm a letter rip kind of person. Uh despite I kind of like the thrill in this situation, Sel, I feel like you're really good at painting both a negative and a positive view of this massive disruption that's coming up. would love for you to talk through that because I I feel like when people hear like hey this is going to be an upended this is going to be upended like yes sure an app for your healthcare sounds awesome but I also know that that'll be paired with a lot of people I know losing their jobs right so how how does this shape out in a in a in a positive way I think I think a lot of people assume the negative they assume the Mad Max but how do we I I don't know if they also I don't think they can see the Star Trek let's put it that way yeah so there's about 20 questions buried in there so let me let It's my specialty is ask really long annoying questions. Talk talk through talk through this uh a little bit.
Okay. So, um the starting point for the Star Trek conversation is very very simple. Okay, which is the following. Technology is a major driver of progress in the world. If you can accept that, you could argue actually that technology is the only major driver of progress in the world. And we've seen unbelievable technological advance from fire and the wheel and the printing press and the steam engine and electricity and da da da da da. You can see that our lives are a thousand times better today than they were a few centuries ago.
Anybody just think back to your own grandparents and what they had to do to to stay alive and get us here and you appreciate how much better technologies today, right? I'll give you the most banal example just to drive the point home. Uh