Arthur Hayes: AI 'Safety First' Is Actually a Destruction of Computing Power Demand, All US Government Options Lead to Money Printing, Ultimately Bullish for Bitcoin
BlockBeats news, September 22 - Arthur Hayes published a new long-form article titled "Safety First," with the core argument that Anthropic, OpenAI, and SpaceX's claims of prioritizing "safety" to slow AGI development are not driven by concern for human welfare, but by economic realities. The market doesn't lack demand for AI; it wants AI at "China prices," meaning intelligence that is 100 times cheaper than current levels. Hayes points out that "Safety First" essentially means the destruction of compute demand. If spending on training new models declines and labs shift to efficiency optimization, customers will spend less on compute. The three major AI labs generate no profits, yet their compute demand underpins over $1 trillion in investment-grade debt and hundreds of billions in low-quality debt, which rely on off-balance-sheet backing from profitable tech companies like Nvidia, Broadcom, Google, and Microsoft.
The real bag holders are U.S. insurance policyholders. Hayes cites Nick Nameth's analysis to reveal a "captive insurance scam": PE giants (Apollo, KKR, Brookfield, etc.) acquire insurance companies, stuff AI data center debt and AI-impacted SaaS private credit into insurance assets, and then provide fake backing through affiliated captive reinsurers with minimal capital. Nameth estimates such fake reinsurance assets total $1.54 trillion. Once AI data center debt is downgraded by rating agencies due to insufficient compute demand, insurers will be forced to add capital, but the affiliated reinsurers simply cannot pay, leading to insurer insolvency. Most U.S. states have insurance guarantee limits of only $250,000 to $300,000, and surviving insurers pay into guarantee funds only after the fact, which encourages maximum risk-taking by all parties involved. When AIG was bailed out in 2008, TARP funds ultimately flowed to Goldman Sachs and spawned record bonuses, while ordinary people only received foreclosure notices. Hayes believes this scene will repeat.
For crypto investors, the conclusion is a win-win. If the U.S. government chooses to become the "buyer of last resort for compute," it will print money under the guise of national security to fund unproductive economic goods, driving up financial speculation and Bitcoin prices; if the government chooses to bail out insolvent insurers, it will similarly need to print money to cover bad AI debt, increasing money supply and driving up Bitcoin.
Hayes specifically notes that the Federal Reserve unanimously voted to raise rates by 25 basis points last week, and RMP bond purchases stopped on August 14, but commercial banks have taken over by creating over $100 billion in money, and the rate hike gives banks an additional $7.5 billion annually in excess reserve interest, which will be used to expand lending and market speculation. Overall, the net effect remains stimulative. The crypto market's consolidation after a small rise in late August is about to end, dollar supply will continue to grow, and Bitcoin and select altcoins will rise. Hayes also calls this situation "incredibly beautiful," as the government will not allow the free market to stop building AI data centers, compute spot will see oversupply, AI agent usage will increase, and the surge in money printing will drive investors to chase crypto assets.
