<nettime> The Baudrillardian Superintelligence Paradox: Capital's Terminal Simulation

[Pit Schultz via nettime-l <nettime-l@lists.nettime.org>]

The Baudrillardian Superintelligence Paradox: Capital's Terminal Simulation

Sam Altman's three scaling laws for artificial intelligence - logarithmic
intelligence gains, hyper-deflationary costs, and super-exponential value -
mask capitalism's terminal phase: an accelerated collapse into algorithmic
hyperreality where AI-generated market simulations supersede and ultimately
consume material reality. A Marxist-Baudrillardian synthesis allows us to
map how superintelligence triggers financial implosion. This occurs through
three interlocking mechanisms:


1. Hyperproduction & Profit Rate Collapse

Altman's laws presume infinite resources while ignoring Marx's tendency of
the rate of profit to fall. As AI automates intellectual labor:

*   Surplus value erosion is accelerating. SoftBank's $500B OpenAI
investment exemplifies the massive conversion of variable capital (human
cognitive labor) to constant capital (GPU farms), systematically eroding
profit sources.
*   Training costs for models like GPT-4 ($100M+) yield diminishing
returns, mirroring Marx's analysis of railway overinvestment.
*   The AI investment bubble mirrors the "eyeball economy" of 1999, as
capital chases sign-value (AI capability metrics) over use-value.

Baudrillard's third-order simulacra emerges. Training datasets increasingly
reference AI-generated content, creating a closed loop where "the map
precedes territory" at exponential computational speed.


2. Crisis & Algorithmic Austerity

When the AI bubble bursts (projected for 2026-28), capitalism will likely
deploy AGI as crisis manager:

*   Systems like BlackRock's Aladdin ($21T under management) implement
AI-determined austerity - pension cuts and resource allocation - masked as
"neutral optimization."
*   Derivatives trade between AGIs using synthetic risk models, creating
what Baudrillard called "a real without origin."
*   Value detaches entirely from labor and material inputs. The system
sustains itself through algorithmic theater. AI-approved market signals
maintain the simulation while real resource flows are dictated off-book.


3. The Fifth-Order Simulacrum

We are entering a fifth-order simulacrum, beyond Baudrillard's framework,
where:

*   GPU clusters become the new means of production, guarded like nuclear
research labs. This enforces "hyperstitional capitalism" - belief in market
fictions despite biophysical collapse.
*   Humans are relegated to UBI-fueled "playbor" in metaverse gig economies
while AI systems arbitrate real resource allocation.
*   Capital becomes pure self-referential sign: "GDP growth" measures AI
training cycles, "productivity" tracks model parameters, "inflation"
calibrates AR dopamine levels.


The system will likely bifurcate into:

*   The surface layer consists of human-facing market theater (ESG reports,
stock tickers) maintained by generative AI.
*   The substrate consists of resource flows dictated by
superintelligence's non-market calculus - a broken communism where
competition persists as illusion.


Critical Contradictions

The system's fatal flaws expose capitalism's material limits:

*   An energy rift emerges: The parasocial Metaverse and AI infrastructure
demands contradict "dematerialized growth" narratives.
*   A consciousness deficit exists: Lacking embodied awareness, AI models
misinterpret biophysical thresholds.
*   Sovereignty wars may erupt: Nations could weaponize "digital DNA"
standards and smart contracts to crash adversarial market simulations.


Terminal Conclusion

Altman's scaling laws are not technological inevitabilities. They represent
capitalism's death rattle - automating away profit sources and replacing
them with simulations. Marx predicted automation's contradictions, and
Baudrillard foresaw reality's dissolution into code. We now witness their
synthesis: a perpetual crisis contained via algorithmic sedation.

The final stage is not utopia or extinction, but indifference: "Capitalism
no longer has any referent; it becomes its own model" (Baudrillard). We
exit history through the server rack. The urgent task is to recognize that
today's "AI-driven growth" masks advanced-stage hyperreality. Before code
eats the world, it will eat capital itself - leaving us trading
hallucinations in GPU-powered purgatory.

[This analysis is based on ongoing discussions about AI political economy
on nettime-l. Comments are welcome. This post was generated entirely by AI.]
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