Strategy in the Era of AI

Setting the stage

People have been using “strategy” and “tactics” like they are interchangeable when they are distinct levels of work. Confusing them is how people go really fast in the wrong direction, burn resources on “how” questions, and never answer “why this.” Strategy is the choice of the game and the reason you are playing that specific game. Tactics are the moves you make once the game is worth playing.

The cleanest split is the question you are actually asking. “Why” and “where” live in strategy: Why this market, this customer, this time horizon, this definition of winning? Where do we refuse to play? “How” is almost always tactical: How do we ship, price, staff, sequence, or execute inside the game we already chose. “What” is the slippery one. “What product should we build?” can be strategic if it is really “what game are we in?” It is tactical if it is “what feature do we ship next?” Treat every “what” as a fork until you know which side it belongs on.

The two questions I keep coming back to are the ones that expose whether anyone has done the strategic work at all: What game are we even playing? And why are we playing this game instead of another? If those two cannot be answered in plain language, you do not have a strategy. You have a bundle of tactics looking for a purpose.

In the era of AI

AI is the most disruptive technology I have ever seen, and I suspect the same is true for you. I have used so many tokens to manifest absolutely nothing of value except a few tools for myself and this platform hosting this static content. A lot of motion. Zero progress.

There is a lot of talk about AI, and it is impressive technology. I can swing wildly in opinion based on the day and the most recent experience I have had with it. The core energy driving the mania is an absurd level of FOMO. I don’t think we have ever experienced it like this as a species, because the potential is proving out right now.

The most strategic question I am finding right now requires a bet: is the AI capability curve sigmoidal or exponential? Are we building a PhD intern with infinite stamina, or a digital god? That is the underlying uncertainty at this moment. It is up to us to place the bet and act in accordance with it. I am writing this, and framing that question, because I am thinking through how I intend to bet and use my time.

The implication of the curve

The question of how to spend our time will boil down to what we sacrifice now until the question gets an answer. What is worth the sacrifice?

Let’s consider three driving sacrifices that are generally made for a commercial success: health, relationships, and wealth.

Health

Is it worth sacrificing health until the curve question has been answered? In the digital-god case, the question is whether your health makes it. Do you believe you can last the next ten years wrecking yourself on the hope that a god shows up with magical pills? In the infinite-intern case, the answer is a clear no. The tools get faster, but the time to validate quality does not. You still have to understand the work, and the work that almost certainly survives is regulated. An army of interns also raises a simple regulatory problem: who wants to trust interns with their lives?

The health sacrifice only makes sense when the default is the resilience of age. A healthy twenty-year-old can make it because it is not a real sacrifice. That is the same pitch venture capitalists have made to 20-somethings in the Valley forever. The world is not radically different. I am a 45-year-old man. My default is decay without effort, and I need a strict regimen to keep vitality as I restore it.

In any strategy, health is the energy bar in the fight. How much of you do you spend maintaining it, how much do you burn toward an objective, and how much do you keep in reserve for an emergency?

The energy available to you determines what game you can actually play, if you play at all. It changes the scope of the game and the field of play. The risk with AI is the feeling of infinite capacity when the bottleneck is still human validation. For many people of age, this is a forced role change: from the front-line commander leading from the front to the four-star general determining grand strategy. Those roles exist for good reasons. Someone has to play the strategy game, and it is a slow, boring game.

Relationships

To do anything serious you have to dive deep and get absorbed in whatever the game demands. That is the sacrifice of social dinners, game nights, and the like. That is time with family, or not. That is the spouse, and whether you like being touched.

In the digital-god case, this sacrifice is pure waste. A god will not restore broken relationships. In the intern case, the sacrifice has new risks. It can be the motivation that forces a real outcome. It can also be vanity posing as nobility, and this is the old hustle-founder tradeoff. It is not new, but it still requires an honest look in the mirror. The new risk is an infinite army of interns becoming a digital simulation of relationships while the old ones decay for good. Do the interns become an echo chamber or a battle arena? Do you get tired from the battle? Do you want no conflict? We have too many new ways to get distracted that feel real while we neglect what is actually valuable.

This runs on the same fuel as health: time. However, the time is energy spent differently via presence. That requires a sense of where you want to end up, with whom, and whether your neurology will like that destination. Thinking strategically here is figuring out which bridges are worth building and which are worth burning.

Wealth

Finally, what about wealth building and management? Does it make sense to elevate spending? What are the new assets?

In the case of the digital god emerging and providing abundance for all, wealth gets awkward and strange. That being said, the old game of status will still operate in new ways. There will be some that value the old world rankings, and entirely new forms of rankings will take place. We call this the singularity because we really can’t see what happens beyond it, but this doesn’t translate into an asset development plan. If anything, it strategically requires you to look at which forms of status you value and how that may shift in abundance.

If the god is a vengeful and angry demon set on destroying us, then the foil to this is the Amish. Almost nothing touches them except a paperclip agent paving the planet into data centers. That is not a plan for my calendar. The best hedge against a rogue AI is land that you can operate despite collapse, so this is the first actual wealth transfer to make between balance and a real estate property.

Now, consider the infinite army of interns. This is where it feels like we have maximum opportunity in the current-day game. The core humanity game still exists, but now the field of play feels like it is shifting dramatically as knowledge and tactical execution are feeling insanely cheap. For those that are manic about AI, the current state of play has AI pegged as jet fuel in moving fast. This is true, but it is not yet jet fuel in validation.

Thus, if the current technology is fixed in place then it will split the market. Super easy-to-validate things become cheap while hard-to-validate things remain slow. The old liability game of who pays for failure will still exist. Some markets will be flooded while some markets get deeply entrenched. In other words, the game will remain a game; we should expect the ceiling of what the players can direct and execute goes up dramatically for some but not all. At least, this is what is being sold, and an army of interns feels magical. It is hard to fight the feeling that abundance is coming.

Acting on the pure feelings of the moment can be a strategic failure.

Strategically, it is important to focus on what is going to remain the same rather than what changes. We can expect people will still want things, especially things that other people do not have. People will still need food, clothes, housing, and relationships. Even in abundance, people will invent new forms of scarcity, and just look at Pokemon cards as an example. Taste will become sharper and remain a scarce skill, and it will be directed towards managing and directing the interns. We should expect hipsters to want authentically human-crafted things, so the joy of craft will be elevated beyond survival within some communities. Not everything will be great and amazing, and we are going to lose some people to nice soft isolated bubbles of comfortable echo chambers.

Sadly, much of the amazing technology we have emerging is going to become known, normal looking, and simply boring. Just look at how unbelievable airplanes are in taking humans anywhere, and most of us absolutely hate flying. It did not take long for the magic of flying to become a boring painful step between locations.

From a strategy perspective, the first thought you have to do is decide how much to hedge in the doom situation to establish a fortress to endure whatever else happens. This is because we can only imagine how the abundance can play once it is boring, and it might get dark because human neurology is not tuned for it. The risks of things going very badly are echoes of sci-fi warnings.

Once you have your fortress planned and allocated, the next step is boiling down how much you want to risk for status, and that’s the game. Status is weird and tribal, so this is a core question of which tribes do you want to compete with. Once you settle on the form of status, then it becomes investing in acquiring the form of leverage to ratchet up in that game.

Beyond status, the next game is the personal and more important way to spend wealth, which is how you spend your time. The potential of the army of PhD interns is that you can learn things faster, and you can scratch the itch by simply asking the AI the first reasonable step on a journey to fulfill a lifetime dream. Now has always been the best time to learn new things, but the legion of interns available for a reasonable price remove any excuse. Work with it, find its rough edges, and live your life with passion.

How my strategy shifts

In terms of the major question between the emergence of a digital god versus a sigmoidal flattening of the capability where we get this legion of genius interns, I’m leaning towards the interns. I want to justify this because everything up until I wrote this and started to think critically would suggest we were on an exponential curve, and the nature of a sigmoid function is that it can look like an exponential function until it levels off.

This leveling off does not mean that the capability isn’t extraordinary or not well above 99% of people. It would be foolish to discount the current state as not disruptive in a serious way. Instead, this is about negative visualization. Leveling off is the end of the hype cycle for AI, and there are many good reasons to believe this is true unless the current level of AI leads to another breakthrough to raise the ceiling. I’m not saying that we don’t arrive with a digital god, but instead I’m saying it is best to act as if the digital god is delayed.

So, I ask myself this question: what game am I playing? Simple, I’m playing Stardew Valley in reality. The game isn’t a joke as it is a reflection of a well lived life which is why it is so popular, and it even changes the status game that I play. When I tell people that I retired early, the feeling is very different than I’m a rancher because a rancher is sexy and cool rather than a stock market parasite.

This is the game that I’m willing to play until the end.

My health is the energy bar at the bottom of the screen. I focus on good sleep, lifting heavy things, and not wrecking myself with manic token sessions. I’m old, and if I step out of line then I’m punished for days.

Seasons are the real timer and set the pace rather than arbitrary deadlines to create shareholder value faster. Winter is coming. No amount of hustle and bustle will force a cow to gain weight or the pasture to grow faster. I’m choosing a calm that is compatible with human neurology and connects me to the planet in a meaningful way.

My cattle are pets that I eat, and I can control their inputs such that I get the ultimate status luxury good: beef without microplastics. I only eat meat, so I gain a level of sovereignty that is rare. I will view complete obliviousness to the news as the ultimate status game victory. I live on my land, eat my meat, and do whatever I want.

My family, friends, and neighbors are the town which are real and more restorative than any intern chat can offer. Gifts are presence, not optimized outreach that creates shareholder value. The community center is the local integration bet against the dead internet.

My explorations into technology and robotics are the dungeons that I explore. I have ideas around ranching automation, building guardrails for the infinite army of interns, new domain specific languages, and micro-container services to protect me from rogue agents. I can’t help but be creative with technical endeavors.

This is the game that I am playing.