UN week lays bare the fragility of US exceptionalism 

I’m writing this from a hotel room on West 56th Street in New York, a couple of hundred metres from Trump Tower – not by design, just an accident of booking. It has been an extraordinary fortnight, and an extraordinary time to be watching the world from here.

Last week I was in Palo Alto with my colleague Amanda White and our long-time academic collaborator, Professor Stephen Kotkin, hosting our quarterly Fiduciary Investors Symposium – this instalment on the Stanford University campus, as it is every September. Situated within Silicon Valley, it is hard to argue with anyone who calls Stanford the epicentre of the transformation now under way in our economies, our societies and arguably our species: artificial intelligence.

Our sessions brought together asset owners, fund managers, academics and even one of the co-founders of Anthropic, maker of the Claude models and, by most measures, one of the hottest private companies on Earth right now. 

Anthropic and OpenAI are both said to be eyeing valuations approaching US$2 trillion. Between them, and largely outside the reach of Chinese competitors, they look set to entrench an even more concentrated technology market in the United States, layered on top of the Magnificent Seven. Governments everywhere are still working out what this means for growth, privacy, data ownership, intellectual property and jobs. Nobody has a settled answer.

From Palo Alto I moved to client meetings in Connecticut, Boston and New York – arriving, again by accident, in the same week as the United Nations General Assembly and UN Climate Week. Though fascinating, I would not do it again by choice. More than 117 heads of state and government were in town to wrestle with two questions above all others: how to build guardrails for artificial intelligence, and how to make sense of the roughly 165 conflicts currently under way around the globe, Israel-Palestine and Ukraine-Russia chief among them.

Professor Kotkin made a point to our Stanford audience that has stayed with me: look back at both World Wars, he said, and you find a long chain of smaller conflicts that eventually became entangled. He was careful not to claim history is repeating. Neither will I. 

But it is hard not to feel that we are sitting on a tinderbox of fragility in global affairs – and too easy to wave that off as simply “Trump rhetoric”.

Superpower lost? 

On the one hand, I am anxious about where the world sits in terms of the likelihood of “hot war” and the obvious humanitarian and economic toll that brings. On the other hand, I am optimistic about the sheer scale of innovation now within reach.

Up and down Park Avenue and Wall Street, in meetings with some of the world’s most senior investment leaders, the story is similar: it is raining money for fund managers with any connection to AI and technology, private markets especially. And yet, I left those meetings a little unsettled. 

The United States now commands more than half the world’s capital and three-quarters of its military might, and both shares are rising. But a country I have visited hundreds of times over 40 years feels, to me, increasingly lost even as it grows more powerful and more wealthy. It feels obsessed with money, with appearances, with winning. None of that takes anything away from American ingenuity, risk appetite or the genuine generosity of the Americans I count as friends. 

But the rest of the world is losing patience with the scale of the imbalance, and Europe’s answer cannot simply be to wait it out – it needs more innovation, more risk-taking and less regulation of its own. I do not think the current imbalance is sustainable. I worry it will end badly. None of this is helped by a president whose manner and rhetoric are, frankly, hard to stomach, whatever one thinks of his administration’s underlying objectives.

All of which turns my mind back to Australia. Prime Minister Anthony Albanese has been in New York this week on a punishing schedule, doing his best to represent a country that, I fear, is not reinventing itself fast enough, is not productive enough, and is barely participating in the digital economy at all. 

That is a genuine puzzle for a well-educated, wealthy nation with strong rule of law and enviable security. Instead we seem to be experiencing mainly the downside of this transformation, most recently in the reported OpenAI-linked breach of Medicare data. I do not have the answers on how to regulate this next wave of technology. 

But I am convinced that if governments and citizens do not find them, we risk being carried along by forces, increasingly concentrated in the hands of a small number of billionaires and companies, that we barely understand and have no real relationship with.

It is, without question, a fascinating moment: more opportunity and more transformation than most of us have seen in our lifetimes, and quite possibly more fragility and risk to go with it. 

The United States remains a country of extraordinary contradiction – brilliant people, extraordinary wealth, extraordinary innovation, and, in both the Bay Area and New York, extraordinary and worsening poverty and homelessness, visible on almost every corner.

On its current trajectory, the AI revolution may well be just another accelerant of those trends.

Colin Tate AM is founder of Conexus Financial, publisher of Professional Planner.