On My Radar - Super A.I.

Written By Steve Blumenthal

July 25, 2025
By Steve Blumenthal

“I think A.I. is underhyped, not overhyped. It is actually much bigger than we can imagine.”

— Elijah Batt, Personal Hair Stylist of 25 Years and O.M.R. Reader

I listened to a fascinating conversation this week about artificial intelligence: where we are, and where we’re headed. Peter Dimandis hosted the podcast, and he and Dave Blundin interviewed former Google CEO Eric Schmidt.

Elijah is spot on.

At the 1-hour and 22-minute mark, Peter Diamandis asks former Google CEO Eric Schmidt a question that stopped me in my tracks:

“When do you see digital super-intelligence arriving? What does that look like in 10 years — or sooner? And what do people need to know to prepare — as parents, employees, CEOs?”

Schmidt’s answer was striking:

“When digital super-intelligence arrives — and it will — it’ll be like having your own personal polymath. Imagine the minds of Einstein and da Vinci, right in your pocket. The real question is: How will you use that gift?”

Schmidt says the natural limit on AI isn’t data or talent — it’s electricity. Meeting the power demands of the AI revolution won’t be easy. In the U.S. alone, data centers are expected to require as much as 92 gigawatts of electricity. For reference, a single large nuclear reactor produces about 1 gigawatt.

At today’s pace, it can take 15 to 20 years to plan, permit, and build a nuclear plant — far too slow to meet the coming surge in demand. Nuclear may be part of the long-term solution, but it won’t arrive in time to power the AI era. This is one of the reasons why I am bullish on natural gas and energy infrastructure for data centers.

So grab a coffee and find your favorite chair. AI is arriving faster than most realize. I listened to an outstanding podcast on the topic, took notes, and summarized the key takeaways below. It’s a complex area, but I’ve done my best to make it accessible and useful.

On My Radar: Trump, Powell, and Japan

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AI - What Artificial Superintelligence Will Actually Look Like w/ Peter Diamandis, Dave Blundin and former Google CEO, Eric Schmidt

Put on your sneakers, plug in your earbuds, and head out for a walk. You’ll learn where we are going with AI, the good and the bad, and it you’ll have a much better understanding of AI technology in our current and immediate future.

Peter H. Diamandis, MD, is a founder, investor, advisor, and best-selling author. Eric Schmidt is the former CEO of Google. Dave Blundin is the founder of Link Ventures Chapters.

00:00 - The Rise of Digital Superintelligence
09:26 - AI and Energy: The Power Behind Progress
18:34 - The Future of Work: AI's Impact on Jobs
28:02 - Navigating the AI Landscape: Opportunities and Risks
37:13 - The Role of Education in an AI-Driven World
46:41 - The Ethics of AI: Balancing Innovation and Responsibility
56:12 - The Future of Creativity: AI in Arts and Media

The conversation focused on exploring the rapid advancement of AI technology and its potential impacts on society, including energy requirements, national security concerns, and the need for regulation.

Of particular interest is the development of digital superintelligence (which Eric believes will arrive within ten years), the evolution of user interfaces, and the implications of AI on various industries such as entertainment and employment.

Eric pointed out the shift from manufacturing to service economies (globally), and the potential for AI to transform industries and society within the next decade.

AI's Impact and Future Developments

One of my favorite parts of the pod is Eric’s perspective of the rapid advancement of AI and its potential impact on society, including the need for increased energy production to support AI growth. He predicts that specialized AI "savants" could emerge in nearly every field within 5 years. This, of course, comes with the challenges associated with developing and regulating super-intelligence.

AI Security and Global Leadership

The potential national security implications of advanced AI models, is cause for concern surrounding biological, cyber, and other types of attacks. China's investment in AI and the challenges posed by open-source models could shift leadership from the West to China. Eric highlights a need for government regulation and the importance of tracking AI development, suggesting a "mutual AI malfunction" doctrine as a potential strategy for managing AI competition between the US and China.

Geopolitical Insights and AI Caution

Drawing parallels between the 1930s and the current geopolitical landscape, Eric emphasized the need for careful diplomacy to avoid escalating conflicts. He recalled Henry Kissinger, who believed in avoiding provocations and maintaining dialogue with China.

The real concern, in his mind, is the rapid advancements in AI and the potential for open-source models (access to free information) to be weaponized, urging caution and investment in monitoring and defense against potential threats from both state and non-state actors. He raised a particularly interesting idea: the development and potential of AI models, highlighting the possibility of creating less intelligent models to study and control more advanced ones.

AI's Impact on Future Jobs

The impact of automation and AI on the job market could be grave, but is also an opportunity; arguing that while some jobs may be lost, new higher-paying jobs will be created, particularly in areas involving human-computer interaction. However, he emphasized the importance of retraining workers and investing in education to adapt to the changing economy.

He highlighted the need for companies to embrace AI and innovation, noting that big companies often lag behind smaller, more agile ones in adopting new technologies.

AI's Impact on Future Interfaces

On a lighter note, Eric detailed the evolution of user interfaces, predicting that traditional interfaces like Windows, Icons, Menus, and Pull-down (WIMP) will become obsolete as AI agents can now communicate in natural languages.

Younger generations, who are "digital natives," are better equipped to handle the rapid changes in technology, suggesting that they should focus on applying intelligence to solve real-world problems, such as climate change and energy systems.

As for the futute of the entertainment industry, he noted that while AI can reduce costs and improve efficiency, it will not replace human creativity entirely. He concluded that the industry will continue to thrive, with a shift in revenue allocation toward more creative individuals.

AI's Impact on Democracy and Media

Eric discussed the implications of AI's persuasive capabilities, highlighting concerns about unregulated misinformation and its impact on democracy. Exploring the future of digital interactions, including personalized experiences and the potential for digital essences of people to outlive the humans themselves, and how it may change our relationship with loss and grief.

He touched on the evolution of media consumption, noting the shift from long-form content to shorter formats and the challenges this presents for deep research and critical thinking.

Adapting to Digital Superintelligence

Eric discussed the importance of learning loops in software companies, predicting that the next generation of successful tech companies will be those that can quickly adapt and learn from user feedback.

He emphasized that hardware companies, while important, grow more slowly than software companies.

Per his concerns about AI and super-intelligence afflicting humanity, he believes the real danger is not violent destruction but the gradual erosion of human values and autonomy.

Automation and the Future Economy

Eric is confident that digital super-intelligence could be achieved within 10 years, offering individuals access to a powerful tool that could potentially enhance human capabilities. He emphasized the importance of focusing on overall societal health rather than just economic metrics like GDP.

Recommendations to Businesses

  • IT Team: Implement the new security protocols discussed in the meeting

  • Management: Review and update the company's data privacy policies

  • IT Team: Conduct a thorough audit of all current software systems for compliance with new regulations

  • HR Team: Provide training on the new security measures to all employees

  • IT Team: Develop a plan for regular security audits and updates

  • IT Team: Investigate and address any vulnerabilities found in the current systems

  • IT Team: Ensure that all new software and systems meet the updated security standards

  • Management: Establish a process for reporting and addressing security incidents

  • Security Team: Review and update the incident response plan

  • IT Team: Conduct a risk assessment of the company's IT infrastructure

  • Management: Develop a strategy for improving the company's overall cybersecurity posture

  • Management: Provide regular updates on the progress of the security initiatives to the management team

  • Government: Increase funding for universities to acquire necessary data centers and computing resources for AI research

  • Companies: Implement learning loops in their products to enable faster adaptation and growth

  • Educational institutions: Incorporate AI education into their curricula

  • Government: Regulate AI development to prevent misuse and ensure safety

  • Companies: Develop strategies for protecting intellectual property in the age of AI

  • Researchers: Continue studying the impact of AI on human purpose and well-being

  • Policy makers: Address the potential negative effects of AI on employment and retrain workers

  • Companies: Explore ways to make low-paying jobs more productive using AI tools

  • Entrepreneurs: Focus on creating new businesses that leverage AI's learning capabilities

  • Government: Consider implementing policies that promote innovation in AI development

 

See CMG Disclosures at the bottom of this page.

 

More From Ray Dailo

If there is something for us to keep our eye on in terms of the U.S. governemnt fixing its deficit and debt challenges, it is the following.

  • Cut the deficit (how much the government overspends vs. what it takes in) to 3% of GDP. The current deficit is ~ 7% of GDP.

  • Increase taxes by 4%

  • Watch for politicans willingness to take action

Not unreasonable. Not impossible.

Ray Dalio was on Fox Business News this week.

Quoting Dalio,

“The basic picture has not changed — if the US doesn’t cut the deficit to 3% of the GDP, and soon, we risk facing an economic heart attack in the next three years. The good news is that these cuts are possible. If we change spending and income (tax returns) by 4% while the economy is still good, the interest rate will go down as a result, and we’ll be in a much better situation. And we know this kind of balance is possible because it happened between 1991-1998. My fear is that we will probably not make these needed cuts due to political reasons, and will have even more debt and debt service encroaching on our spending that will ultimately lead to a serious supply-demand problem.”

Click on the photo to listen:

Source: Fox Business News, Instragram

That means more bonds being issued (supply) than buyers willing to buy (demand). That means higher interest rates.

See CMG Disclosures at the bottom of this page.

 

Trade Signals: Update - July 24, 2025

“Stay on top of the current market trends with Trade Signals.”

“Extreme patience combined with extreme decisiveness. You may call that our investment process. Yes, it’s that simple.”

– Charlie Munger

Market Commentary:

The Market Commentary section summarizes notable changes in the core key indicators: Investor sentiment, market breadth, stocks, treasury yields, the dollar, and gold. The Dashboard of Indicators provides a detailed view of all Trade Signals indicators.

Notable Changes This Week:

  • The Weekly MACD for the S&P 500 Index remains bullish. The Daily MACD turned bearish, indicating initial weakness.

  • The Weekly MACD for the 10-year Treasury Yield turned bearish, signaling higher interest rates.

  • The Weekly MACD for Gold remains bearish.

Key Macro Indicators - Investor Sentiment, Market Breadth, The S&P 500 Index (Stocks), The 10-year Treasury Yield (Bonds), and the Dollar:

About Trade Signals

Trade Signals is a paid subscription service that posts the daily, weekly, and monthly trends in the markets (and more). Free for CMG clients.

TRADE SIGNALS SUBSCRIPTION ACKNOWLEDGEMENT / IMPORTANT DISCLOSURES 

The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. Not a recommendation to buy or sell any security.

Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. 

 

Personal Note: NYC and Days Long Ago

I was in NYC this last Monday to have dinner with John Mauldin, Ben Hunt, Ed D’Agostino, Olivier Garret and Peter Boockvar.

The discussion was fantastic. We talked macro of course and caught up on our families. Some great insights, but no change in our generally shared outlook. Dinner was at the Bryant Park Grill. The Bronzino was outstanding. The company, priceless.

Steve, John, Ben, Ed, Oliver and Peter

This was really cool. Movie night… outside in Bryant Park. What a perfect night.

Bryant Park, NYC

As I walked home from dinner, I smiled as I passed the Warwick Hotel.

The memories came rushing back. Young and dumb, ten of my pledge brothers and I piled into the back of a U-Haul truck and drove from Penn State to New York City. We laid mattresses on the floor, grabbed our pillows, and tucked a keg of beer between us. Eastbound on I-80, we set off on our “pledge bolt” to the big city.

“Yubby,” one of our brothers and a first-year assistant manager at the Warwick, found us two rooms. We spent the weekend exploring the city with wide eyes and full hearts.

For those unfamiliar, pledging a fraternity is a kind of initiation. A pledge bolt — when the pledge class sneaks away together — is a rite of passage, a spontaneous act that bonds future brothers through shared mischief and adventure. Somehow, that whole wild process forged lasting friendships, a foundation that has stood the test of time — at least in my experience.

As I stood there, I thought about the friends we’ve lost since that trip in 1981. I doubt any of us told our parents where we were going. And if my own kids ever tried something like that? I’d probably lose my mind. Still… what a trip it was.

Young and dumb. And grateful.

Lastly, our family said goodbye to our beloved dog, Shiloh, last night.

He was a beagle-terrier mix — spirited, loyal, and full of love. Susan found him at the SPCA thirteen years ago, and from the moment he arrived home, he became an integral part of the family.

He was deeply loved and will be forever remembered. Our hearts are heavy.

Welcome home, Shiloh.

With kind regards,

Steve

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Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.
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Stephen Blumenthal founded CMG Capital Management Group in 1992 and serves today as its Executive Chairman and CIO. Steve authors a free weekly e-letter entitled, “On My Radar.” Steve shares his views on macroeconomic research, valuations, portfolio construction, asset allocation and risk management. Author of Forbes Book: On My Radar, Navigating Stock Market Cycles.

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On My Radar - Trump, Powell, and Japan