has been hard at work on a new Riskgaming scenario titled Flagship Down, which explores the politics and economics of the modern research university. It’s ready for alpha testing, and we’d love to have you join us.

Read more about the scenario on the RSVP page. It’ll be hosted in Flatiron, Manhattan this Thursday, March 19, from 5–8pm ET. We have space for up to 10, so please join if you can make it.

RSVP for Riskgaming

Policy Breakfast in DC on Wednesday March 25: “Defense Industrial Policy Done Right”

In association with the Manhattan Institute and as part of the Hill & Valley Forum festivities, I’ll be co-hosting a panel discussing how the federal government can buy and deploy new technology faster — and what that would mean for rebuilding the defense industrial base.

We’ll discuss what it takes to get best-in-class technology into the field using the tools DoD already has — and what has to change for DoD to act like a serious customer. We’ll also examine how preferences and add-on requirements shape who can compete, how fast capability is deployed, and whether they strengthen the industrial base or distract from mission needs.

8:00–9:30am ET near the U.S. Capitol on Wednesday, March 25.

FEATURING:

• Reihan Salam, President, Manhattan Institute, Moderator

• Judge Glock, Director of Research, Manhattan Institute

• Matt Babin, Head of Shipbuilding and Naval Programs, Palantir Technologies

• Plus yours truly

If you want to join, just reply to this newsletter and I can send the RSVP link. We are quite full already, but I promise the breakfast will be fun if you can make it.

Days later, TIME published its new cover story, “The People vs. AI,” profiling nine Americans — nurses, pastors, filmmakers, state legislators — united by a shared conviction that the technologies reshaping their lives are being forced on them by institutions they don’t trust. The newsletter Transformer, meanwhile, published a long, damning analysis of why the political left has essentially refused to engage with artificial intelligence at all, instead dismissing it as “spicy autocomplete” while ceding the entire policy debate to the right.

So: The government is saying trust the people, the people are saying they don’t trust anyone, and the political movement you’d expect to care most about corporate power, public welfare and inequality has decided the most transformative technology of our time is a mirage.

Debates over the role of trust and truth in policy have followed a striking pattern, from Ozempic, to mRNA vaccines, psychedelics, even crypto. A potential breakthrough technology arrives, and then the attention economy engulfs it. The resulting information market — not peer review, clinical trials or careful regulatory deliberation — determines what the public believes, what gets funded and what gets approved. Over time, the infrastructure for figuring out what’s true about a new technology has collapsed. Everyone can feel it…and no one knows what to do about it.

I’ve spent the past year building something to try to help people understand this problem better by letting them feel what the collapse is like from the inside.

Gray Matter: Selling Science in the Age of Attention is our newest Riskgaming scenario, and it’s available to download and play today. It’s a live trading card game for 18 to 54 players, playable in about ninety minutes. It is the first game I’ve designed, and the most personal project I’ve worked on at Lux.

The premise: It’s 2027, and a postdoc at NYU has accidentally created a “pattern recognition” drug — essentially, a drug that purports to make you smarter. Within months, three variants hit the market: AlphaAxon, the Wall Street favorite; BrainBatter, the artist’s choice that also attracts Chinese influence; and ClariCore, the “responsible” European alternative.

The FDA skips Phase III efficacy trials under the new administration’s “innovation acceleration” framework (sound familiar?). But a mandatory one-year review is fast approaching, Congress is in chaos and the fate of human cognition will be decided not by peer review or clinical trials, but by the three forces that actually shape our reality: the people who know, the people who are loud, and the people who are rich.

Get the game

When I started designing the game, as I later told Business Insider, I wanted a way to talk about AI without actually talking about AI. I’d been watching how Ozempic exploded through influencer culture decades after the underlying science emerged, how mRNA vaccines became hopelessly politicized as rumors outran safety data, how crypto inspired hot takes from people who couldn’t explain the technology. In each case, the pattern was identical: a breakthrough hit the attention economy, and the resulting information market determines outcomes just as much as the science. I was absolutely sure the exact same thing was about to happen with AI.

So I turned information, attention, and money into the three currencies of the game. Information Agents — scientists, regulators, professors — hold exclusive Clue Cards but need attention to make their data matter. Attention Agents — journalists, influencers, podcasters — can amplify anything but need to get paid. Money Agents — investors, lobbyists, hedge funders — can buy information and attention, but have to decide whether to bet on credibility or virality. Players trade all three currencies freely. There are no rules governing deals. No enforcement of promises. The room determines the market prices for attention, information, and money. The only thing that matters is the cards in your hand.

Here’s where the game gets at something some simulations miss: every Clue Card has a credibility score and a virality score — and critically, those two metrics don’t always move in the same direction. High-credibility information is often low-virality (the juiciest rumor is often the least true), although there are plenty of exceptions (sometimes truth is stranger than fiction).

And the act of making information public (publishing it) is itself a hard strategic choice with real and permanent consequences. Any player can publish a Clue to a public board at any time, which means it counts toward the FDA’s decision, since it is now aware of the information. And once information is out there, it can’t be retracted, although it can be republished. But the board only displays the last three Clues published, because even public information is ephemeral. Want to know if something was published earlier? That costs a Money Card, because in the game world, as in the real one, research to dig up public data is its own economy.

The game thus creates a tension meant to mirror our reality. Attention Agents want to publish, because being first earns them a virality bonus. But Money Agents often want to suppress information, because their scoring rewards holding Clues that were never published — insider knowledge that the market hasn’t priced in. So the same piece of true, important information might be worth more to one player kept secret and to another blasted across the public square. That’s how information actually moves through the world — or doesn’t.

One addition to the game, which changed its character, came after beta testing. Something was nagging at me: the game was modeling information, attention, and money well, but it wasn’t fully modeling the entire spectrum of motivations. Yes, most of the characters cared about seeing a different combination of drugs either stay approved or get pulled by the FDA. But for all players, the “true” efficacy, safety, or backdrop of those drugs was neither a positive nor a negative. It simply wasn’t relevant. So I added a new layer: eight of the players in a full game don’t care which drugs the FDA approves. They care only about the truth environment itself.

The Truth Seekers score highest when accurate information dominates the public record. Conspiracy Theorists score better when false narratives spread. And Chaos Monkeys (my favorite addition) win only when no consensus forms at all (think media broadcasters who succeed when there’s constant news churn to spew). The point, though, is that none of these people are villains. They all think they have good reasons for wanting what they want.

When we ran the game at The Ned in Manhattan last fall, that design choice transformed the room. Midway through, a player posing as a neuroethics professor silenced the crowd by tapping his wine glass. I suspect most people thought he was a facilitator making a game announcement. Instead, he declared (in-character) that the drugs were being peddled by evil corporations that only wanted to make the rich smarter. “He’s right!” chimed in another player. “He’s an enemy of capitalism and American innovation!” shouted another. It was beautiful pandemonium, and exactly how debates play out in real life. Instead of thoughtful deliberation we got narrative combat, where volume and timing decide who gets heard.

By the end of that runthrough, the information players had published, traded, amplified, and buried over ninety minutes had taken on a life of its own. The public record bore only a passing resemblance to the underlying science I’d written into the “secret canon” of the game. Players who held true information had sometimes found it more profitable to stay quiet, while players who held garbage had sometimes found it easy to go viral. The system had worked as intended, and the result was a reality that no single player had intended but that all of them had built.

When I started building this game, the premise was speculative: a fictional administration skipping Phase III trials, an FDA under political pressure to move fast, and a public desperate for answers but unable to agree on where to find them.

Today, the real FDA commissioner is proposing to invert the standard for which drugs require a prescription. DOGE has gutted FDA staffing, so the agency’s reviewers say they can’t meet congressionally mandated deadlines. And 99% of Americans use a technology weekly without always realizing it (AI) is one that over 70% of them view negatively.

Gray Matter is still fiction. There aren’t super-cognitive enhancing drugs yet, unless you think of AI as a super-cognitive enhancing drug. Perhaps it is. Regardless, the whole scenario is less fictional now than when I wrote it. The post-truth drug trial is not a thought experiment but the world we’re living in: a world where the science is never settled fast enough, where the people with the data aren’t the people with the megaphones, and where the line between selling and settling science has become impossibly blurred.

The question is whether we’re going to understand the forces that got us here, or keep pretending they don’t exist. Gray Matter is my attempt to help you feel what it’s like to be inside the machine. My hope is that you’ll never look at a drug approval headline or a tech tweet the same way again.

Don’t miss

With the rumors swirling about SpaceX’s imminent IPO, it’s apropos that our next Riskgaming scenario explores the tradeoffs between national sovereignty, technological capability and security. Designed by , Dead Reckoning is a salon experience where players take on the role of companies, governments and the European Space Agency to determine the fate of Europe in the Space 2.0 era.

We’re hosting this game with a prominent think tank in a few weeks, so this is a near-final beta test as we improve the quality of the gameplay experience. Join us, give us feedback, and we’ll reciprocate with food, wine and drinks.

Details

• Date: Thursday February 12, 2026

• Time: 6:00pm ET - 8:30pm ET

  • Gameplay: 6:30pm - 7:30pm

• Location: Meatpacking District, Manhattan

• Feel free to send this invite to friends who might be interested, but we rarely can accept plus-ones at the door.

Sign Up (For Real This Time)

In fact, this might be one of the most exciting eras in biotech and healthcare history. Ambitious inventors are coupling past technological breakthroughs, like CRISPR-Cas9 and single-cell imaging, with today’s advanced artificial intelligence models to open up whole new areas of exploration. That means faster breakthroughs in the lab, and hopefully a rapid speedup in translating discoveries into therapeutics that benefit us all.

With so many changes happening at once, it can be hard to keep up, even for specialists. The challenge is multiplied by the global scale of this industry, where China and India are now key players alongside traditional incumbents in the United States, United Kingdom and Europe.

That’s why a year ago, the UK Embassy in Washington DC reached out to us for a special summit it was hosting on the future of biotech and health as part of Prime Minister Keir Starmer’s trade mission to America in early 2025. The embassy wanted a special educational experience that would help a diverse group of domain experts come to terms with the rapid technological changes underway and explore how those changes would affect the field as well as global economics and politics in the years ahead.

From this charge, our latest Riskgaming scenario, Experimental Automata, was born. It’s a salon experience for 30–60 players, playable in about 90 minutes, that facilitates a set of wide-ranging debates about the future of biotech and health. For instance, what’s the right balance between the privacy of patient health records and the voracious need for detailed and realistic data to train the next-generation of AI models? How do we figure in the yawning health inequality between the most developed nations and the emerging markets, where next-generation biotechnologies rarely trickle down?

Get the Game

What makes the game unique is that players take on a variety of roles from countries around the world, all with divergent objectives designed to spur unique conversations. Some players want to increase global supply chain integration to maximize economic efficiency, while others want to nationalize their health supply chains and advanced manufacturing. As players make policy decisions across five international summits during each scene, 30 indicators update to show the effects of those policies.

It’s a fairly simple game designed to make onboarding as fast as possible, but what was powerful in our runthrough at the UK Embassy was that instead of an awkward breakfast speech hoping to breathe early life into an all-day conference, we were able to get 60 experts moving, debating, cajoling and even laughing about the extraordinary changes underway in bio and health in the years ahead.

We learned a couple of lessons. First, it’s really hard for people to avoid status quo bias, particularly when they are debating challenging new issues with people they haven’t met before. The most extreme options were generally ignored in our runthroughs, as almost everyone tends to be pragmatic rather than ambitious with their arguments. The exceptions were more outlandish technology policies like geoengineering Earth, which were popular among Silicon Valley types (and received scant attention in DC).

Second, many people struggled with how policies would change multiple indicators at the same time. Improving America’s research capacity is great for the United States, but can harm Europe and China as they struggle to compete. The game is decidedly not cynical (I work at a venture capital firm after all), but relative factors make it hard to secure true win-win outcomes.

Third, the game isn’t as open-ended or dynamic as I generally want my designs to be. As I did research, it became clear that emerging market economies are really going to struggle in the decade ahead with advanced healthcare delivery. Given their cost and sophistication, taking advantage of the most cutting-edge treatments requires epic levels of institutional capacity, talent and funding, resources that are missing from most of the planet. Even the most bullish development economists struggle to describe how we could avoid widening this gap, and the game reflects that in its design.

What’s important in Experimental Automata isn’t who wins or loses, which is partially preordained by existing trajectories of countries like the United States and China (it isn’t possible to balance the game against reality). Far more useful are the open-ended educational debates the game forces players to confront from different perspectives. Even as entrepreneurs push technology inexorably forward, there’s still plenty of time to understand its implications and even shift its trajectory, if only we knew what to do.

Get the Game

Don’t miss

A lot of senior decision-makers — people who have been doing their jobs at the highest level for decades — play Riskgaming. The essential skill these leaders have honed is their ability to make extraordinarily complex decisions at a brisk pace. Generals and admirals make strategic and tactical decisions after decades of courses, simulations, training exercises and hardened field experience. Ideally, each of these military leaders can swiftly answer what should be done when an issue arises.

Play the game

Crises come, though, when fundamentals change. Suddenly, all of those layers of decision-making acumen built up over decades are less useful — or worse, are actively wrong. It is dangerous when incumbent leaders stay in place during transition points but haven’t updated their thinking about the world. It’s even more perilous when the institutions that appoint these leaders assume that the experiences that led to peak performance in the past will continue to be the requirements for the best leaders going forward.

A key current example of one of these transition points is autonomy and war. It’s been nearly four years since the start of Russia’s full invasion of Ukraine, and the major lesson of that conflict is the pivotal role drones and autonomous warfare will play from here on out. The pace of battles is accelerating in line with AI capabilities, and it’s increasingly untenable to have humans on the loop, let alone in it. The machine has to run as fast as its chips will let it.

That’s a very different pace of change for war. Normal defense innovation happens linearly. Bullets, tanks, airplanes — the equipment and materiel that make up a modern army are always improving, but never particularly quickly. No one doubts that the Gerald R. Ford-class aircraft carrier is an improvement over its vaunted predecessor, but neither do they believe it radically transforms the nature of sea warfare. For a navy admiral trained to command fleets, their judgment and experiences are as relevant today as they were decades ago.

Autonomy, on the other hand, is a rupture. AI capabilities over the past decade have exponentially improved, and just when people started to doubt its progress, we’ve seen it once again with the launch of Google’s Gemini 3 last month. Capabilities in the commercial sector are flowing into the defense sector as ideas and technologies diffuse across the porous border between these two markets.

Returning to Ukraine: the drones on the battlefield in 2021 are not those around in 2025. Both Ukraine and Russia are constantly fielding new equipment that’s improving on an exponential curve. As anyone who has followed the conflict knows, that’s required both sides to regularly adapt their strategies and tactics to the new normal of the automated battlefield. There are dozens of ambitious Ukrainian drone startups innovating across a range of functions, from rapid mine detection and reconnaissance to cargo and munitions delivery.

Yet, this is just one environment in defense. We are seeing the same exponential pattern in all domains of war, including land, sea, air, space, cyber and more. No facet of modern warfare will be left unchanged.

With fits and starts, America is adapting, but it’s been slow going. This is a crisis, and one that’s finally getting more attention. This week, The New York Times’s editorial board called for rapid progress on defense innovation. Like any rupture, autonomy is upending the carefully cultivated judgment of thousands of senior military officials. What was taught in boot camp, officer candidate school and war college or learned across decades of service is suddenly much less relevant. In a way, we are all amateurs in this new world.

Riskgaming is how we take sudden amateurs and begin to bridge their valuable past experiences to meet the demands of the future. Science, technology and finance are rapidly changing, but that doesn’t mean the cultivated instincts for decision-making and judgment have to be discarded. In times of intense uncertainty, Riskgaming allows leaders to keep their tools even as they throw out expired schematics.

It’s obvious who is ready to adapt. I spent an hour with a current four-star general leading one of the most important U.S. global commands. He gets this future, entirely. As we talked about AI and what it’s doing in different domains, I was profoundly reassured that this leader comprehends how much everything is changing, and just how much work is ahead for America to maintain its power this century.

On the other hand, I had a similar lengthy talk with a three-star general who is a deputy of one of America’s other most important commands. I had the opposite reaction: this is someone who thinks nothing has changed — that autonomy is merely a buzzword peddled by defense salesmen for profit. Intelligence analysis just needs more bodies to be effective and can’t be automated. I was gobsmacked. At times, I viscerally felt the cool shiver of past defeats in the face of recalcitrant hubris. This is what the French felt as German tanks drove through the Ardennes.

In short, we need better tools to upend and recalibrate our decision-making around AI and its effects on national security.

That prompt was the genesis of our latest Riskgaming scenario, No Man’s Land. Mike Bloomberg, who at the time was the chairman of the Defense Innovation Board, along with Beth Kroman wanted to convene a senior group of military leaders, congressmen, think tank presidents and private CEOs to competitively engage around the future of defense innovation and how the exponential growth of AI technologies would transform the future of conflict and the warfighter in the field.

We hosted that group last year, and since then, we’ve hosted the game for senior groups from U.S. allies, including Canada and Australia.

What makes No Man’s Land special — and also our richest Riskgaming scenario to date — is the number of tradeoffs the game models in an extremely compact format. It only takes about three hours to play with eight players, and the rules aren’t fiendishly complicated. Yet, the scenario allows players to balance economic growth and national security, emerging threats and great power competition, open source and proprietary technology, commercial competition and cooperation, productivity and employment as well as long-term investment against short-term capital constraints. That’s a lot of tradeoffs to balance in one experience!

Play the game

We’ve hosted dozens of Riskgaming events since we launched two years ago. But none of them have proved to be as controversial as a runthrough of No Man’s Land. There is always a divide among players who “get it” and those who don’t. What’s been interesting is that it is never a fight over the details. Instead, it’s a much more fundamental disagreement over the scope of future automation and just how much will change in the years ahead.

I’m not too scared by the bulls or the pragmatists: the bulls will rein themselves in and the pragmatists will figure it out. What scares me are the vociferously opposed, the leaders who believe autonomy is nothing more than a phase or bubble that will simply disappear. The arguments around our Riskgaming tables are invaluable, but I have grown more and more wary of the belief that a prior generation of leaders will catch up in time. When the world ruptures, there are those who find their futures and those who slink to the past. That’s the discriminatory power of a hard decision in a world that’s rapidly changing.

In addition to the game, I’ve posted our memo to the Pentagon outlining the main lessons of No Man’s Land. By all means, read that even if you don’t play the game.

Read the memo

Don’t miss

Sign Up / More Info

Details

Join us for a festive, fun and cooperative Riskgaming experience hosted by Lux Capital with some of our favorite global gift-takers. We’ll find out who’s naughty or nice — and whether the Arctic is tomorrow’s next superpower or IMF bailout.

When: Tuesday, December 2 from 6:00 to 9:00PM PT
Where: San Francisco (SoMa neighborhood, location disclosed upon confirmation)

Agenda

6:00-6:30PM: Arrivals & check-in
6:30-8:00PM: Play!
8:00-9:00PM: Bites, libations, and merriment

Sign Up / More Info

Don’t miss

The year is 2027. Scientists have developed Neurolifts, a new category of drugs that supposedly improves pattern recognition. What happens next?

In our latest Riskgaming scenario, Gray Matter, we’re simulating the chaos that erupts when a breakthrough in science or technology hits the public sphere and no one agrees on what it means. This “policy wargame” explores how attention, money and information interact in real time, how people make bets on credibility versus virality, and how narratives become policy before the science is settled.

We ran the beta test last month, and now it’s time to release the final edition to the world.

Join writers, journalists, scientists, founders and stray venture capitalists for a fun night of competing for the future.

Details

• Date: Tuesday September 9, 2025 from 5:30pm - 8:30pm

  • Game Runtime: 6:15pm - 7:30pm

• Location: Near Flatiron, Manhattan

• Cocktails + light bites will be served

Request Invite

We hope to see you there!

~ Danny, Laurence and the whole Riskgaming and Lux Capital crew

If you have previously expressed interest through our online signup form or previously attended a Riskgaming scenario, we’ve merged all of these different lists to this one here on Substack, where you can subscribe and unsubscribe as desired.

If you have any questions, just reply and I will do my best to answer them.

1. Casual meet-and-greet in Washington DC this Thursday

If you’re interested in complex science, technology and policy issues, Riskgaming, venture capital or just looking to complain about the nihilism of the world, I’ll be in Washington DC this week for a handful of dinners and policy conferences.

I’m working on a possible meet-and-greet of Riskgaming friends for Thursday, May 15th for Early Happy Hour.

Given the short notice, it’s probably easiest to just reply to this email and let me know you’re potentially free and I will manually try to get a squad together to drink.

2. Pittsburgh on May 21

Our Riskgaming director of programming Laurence Pevsner and I are scheduling a policy dinner in Pittsburgh on Wednesday, May 21st. We very rarely head to Pittsburgh, so if you are local and want to meet up, let us know. Also, if you have friends in Pittsburgh that you think we should meet, feel free to forward them this link or the entire email.

Sign up for Pittsburgh

3. London on May 28 & 29

Laurence and I are giving a few policy and game design presentations on Riskgaming to our friends in London.

If you are interested in joining either a meal or a full Riskgaming scenario runthrough in London on either Wednesday, May 28 and/or Thursday, May 29, please fill out the link below. As always, feel free to forward to anyone you think we should meet.

Sign up for London

4. Launch of Sam Arbesman’s new book “The Magic of Code” on June 10 in NYC

Our scientist-in-residence Sam Arbesman (who also hosts our sister podcast The Orthogonal Bet) is about to publish his latest book, “The Magic of Code: How Digital Language Created and Connects Our World―and Shapes Our Future.” You can read more about the book on Sam’s own Substack here:

Cabinet of Wonders

☞ Computation and Wonder, Soon in Book Form!

At long last, my book The Magic of Code is going to be published. Though really not quite yet—it’s not being released until June 2025, so there is a while to go. Nevertheless, the book is feeling real. The copyediting is complete and I am in the middle of looking at page proofs. The book is getting ready to go into production, beginning its long journey…

Read more

a year ago · 11 likes · 3 comments · Samuel Arbesman

Lux Capital will be hosting a special launch party for Sam on the evening of June 10th in NYC. We are already quite full, but if you want to join, please reply to me by email if you love the spirit of programming and the wonderful eccentricities that digital technologies have offered our world.

Don’t miss

Upcoming Riskgaming Events

After a bunch of fun in December launching Powering Up, our Riskgaming scenario on China’s electric vehicle market, we will be debuting our next game on the future of biotech later this month in New York City and Los Angeles. Come join! It’s a fun, cocktail-style setup similar to our DeepFaked and DeepSixed game that explores the radical inventions coming out of biotech the next few years and how we should respond.

No biotech or Riskgaming experience required. Just curiosity for the future of technology.

As with all of our events, we are constrained by fire code, so do sign up with alacrity below:

• Flatiron, New York City, Thursday February 20 from 5:00pm ET to 8:00pm ET

• Marina Del Ray, Los Angeles, Wednesday February 26 from 5:00pm PT to 8:00pm PT

Happy Presidents’ Day!

It’s Presidents’ Day in the United States on Monday, so enjoy the long weekend for those who can.

We will return to our regularly scheduled column next week.

Podcast: Luck rules our lives, so why don’t we teach more about it?

Laurence Pevsner and I talked with Nicholas Rush Smith, director of the Master’s Program in International Affairs at The City College of New York and its Graduate Center. We talk about the power of play, how dopamine affects the learning cycle, why losing is the best education for winning, and luck and contingency in international relations.

Feel free to listen to the entire conversation, but here’s a condensed and edited version of my favorite highlights. Nick joined us for a runthrough of Powering Up, which is where we started the conversation.

Nick Smith: I played Patrick Wong, who is running the China aspect of U.S. General. I felt pretty invested in Patty by the end of round one. I was reading his little bio, I was like, "Oh, man. This guy seems like he's got the future, but he's got this very difficult set of internal politics that he's going to be dealing with Detroit." I was quite invested in how Patty, as an individual, was going to fare.

The emotion that comes with that can be incredibly valuable because, while we often talk about games and rational strategies, the fact is that our rational strategies are affected by the emotions that we bring. And in fact, rationality and emotion are deeply connected with one another. And so, after round one, realizing I'm really doing a bad job gave me impetus to pull back both for the company generally, and then for Patty as an individual.

Danny Crichton: Last year on the podcast, I talked to Kelly Clancy, who wrote a book called Playing With Reality: How Games Have Shaped Our World. One of the things she emphasizes is the dopamine loop. That the way we learn is by surprise. We're in the woods, something surprises us, something is dangerous, something is safer. We're hungry, the food works or it doesn't work. We learn from that.

When I look at international relations and international economics, so much can be textbook or case studies. I'm reading this and I'm like, "Yeah. It makes sense. Okay. Yeah. Facts, everything's logical." And you forget.

When you actually have to play this role and you have to play this character, and then someone backstabs you in scene four. Or, in your case, you got into a rut because you made a decision in the first scene or two and you're like, "Shit. I really screwed up. I need to turn this boat around immediately." That's a dopamine hit. And it may not be a positive one, but it was an unexpected one. You're not going to forget how you got out of that slump and caught up.

A lot of it is kind of negative, but it's also much more realistic to a competitive market.

Laurence Pevsner: One of the books the CEO of Osmo, a portfolio company, gave to us was A Theory of Fun by Raph Koster, a game designer. He argues that the losers tend to learn a lot more than the winners. If you just win, then you're like, "I'm so great, I don't need to learn anything." But if you lose, then that's where the real learning comes in. And that's the whole point of a game simulation environment; this is a place where it's okay to lose. It's okay to be wrong, and you're going to learn from it.

One of his other points is about, in game designer terms, called the skin of a game. What's the story around the game versus the actual function and design and rules? There's a lot of debate in game design about whether the skin matters. But he suggests imagining a game where there's a well, and you, as the player, are trying to fit different-sized people into the well. They're bodies, essentially, and you're trying to just make a perfectly neat stack in the well.

It’s a horrific concept, right? You're basically imagining a concentration camp burial or something. But it's also, from a game design perspective, Tetris. And this is one of these things where the skin matters so much. The emotional valence of playing Tetris would be completely different with that sort of skin on top of it.

Nick Smith: Well, and it's also interesting thinking about the difference between the rule-bound nature of a game and the unbounded nature of play. We often think of games as, well, you play a game. But the reality is that play is a free-form activity that children do without rules or where making up the rules is part of the play. That is slightly different from a game like chess, where the rules are very strongly set.

David Graeber's Utopia of Rules has some really interesting reflections on this dynamic, this relationship between rules and play. And he makes an argument that, on the one hand, play is beautifully freeing. But play also has a kind of terrifying quality that leads us to want the rules.

So for example, imagine existing in a world of playful gods. There'd be no worse world than having a playful god sitting over top of us, precisely because it would be such a god who'd be completely unfettered.

As I was finishing up his book in the last couple of weeks, it made me think about the way in which Ian Curtiss, your game designer, would bring in these random events at the end of every turn in Powering Up. He was a kind of godlike figure who was playing around with us, announcing news out of the blue that would fundamentally reshape the conditions under which we were playing.

And frankly, it had that kind of terrifying god-like quality to it. Every time, he would say, "All right, new news." And honestly, I would shrink in my chair.

Danny Crichton: As a side note, my favorite part about Utopia of Rules is the post office. I had no idea that in the 1800s, the federal government was essentially the post office. Something like 75, 80% of all federal jobs were the post office masters of all these small cities all across America. If you think about it, it makes sense. The post is the only way to get information from the West Coast to the East Coast. But I was blown away by that.

But I think you're getting at something Kelly was also getting at with her book, which is why do we care about games and chance and gods? She has multiple chapters on that as well. You are in this world that is unstructured, things happen randomly, you're grasping for some sort of metaphor for, what is happening to me? Why did I have all this bad luck?

We, as story creators, are always looking for a way to understand what's happening to us. Chance, probability, dice rolls — those are metaphors for saying, look, every day, sometimes you win, sometimes you lose.

Nick Smith: Totally. The language of chance is itself a story we tell ourselves about the structure of the market. So, to build on both your points about narrative, part of what I told myself about these cards is, this is really bad luck. But, as you've since explained to me, those were loaded dice. I was assuming that they were fair dice, in part because I had an opaque view of what the structure of the game was. The narrative of bad luck helped me get through it, but it also, in its own way, has the potential to deceive multiple decisions.

Danny Crichton: I think if you look at the political science literature and the philosophy literature, there's been a growing subfield of “luck studies,” if you will, of people who get lucky in their careers. One of the counterpoints to, say, meritocracy is, well, some people get lucky early on for whatever reason, they have a network effect that grows very early, and without that, they would never have succeeded. There's so much stochastic calculus going on in everyone's lives that you have to have systems to undo that or level the playing field.

I have not seen as much about luck in the international relations field, despite the fact that it feels like luck plays an even larger role there, just given the complexity of the international system. Think of classic chaos theory. It seems like luck emerges from that system much more than even domestic politics.

Nick Smith: I think the term of art would be contingency. Contingency is certainly something IR theorists have thought an awful lot about. One of my favorite books on this is a book by Christopher Clark on the origins of World War I, called The Sleepwalkers.

One of the things that he argues quite explicitly is, look, you cannot understand the origins of a gigantic event like World War I without understanding both the contingent structure of events and the ways in which people at the time were telling stories about what caused those events. As an example of this, he's got this extraordinary chapter on the assassination of Archduke Franz Ferdinand. Which, I have to admit, prior to reading Clark's book, I didn't realize what a complicated event the actual assassination was.

Ultimately, somebody shoots the Archduke, but instead of going to the hospital, he gives a speech. It's amazing. He basically says, "I come here to visit you people, and this is how you repay me, by shooting at me while injured?" I mean, it's kind of unbelievable. And then, of course, he dies. And talk about contingency. It is bad luck on a certain level, but it's also just a really bad decision to not go to the hospital.

But in the wider world of Europe at the time, this guy's bad contingent decisions very quickly gets narrativized in this nationalistic framework that Austro-Hungarians, et cetera, have to defend their empire.

To think back to the structure of Powering Up, it's amazing how quickly people come to adopt narrative roles. Like me as Patty, I very quickly decided, "all right. I'm going to be a mover and shaker here." And again, that's a really great part of the learning, is that the emotion drives outcomes.

🔊 Listen to the full episode of “Luck rules our lives, so why don’t we teach more about it?”

Lux Recommends

• Peter Hébert enjoyed reading about the diamond industry’s crisis amid the rise of lab-grown alternatives in Bloomberg’s “The $80 Billion Diamond Market Crash Leaves De Beers Reeling.” "The pain is spreading across the world: Chinese retailers have been shipping back tens of millions of dollars of unsold gems every month; Botswana, which hosts De Beers’ largest mining operations, has voted in a new ruling party for the first time in six decades as plunging diamond revenue reverberates through the economy; in India, factories have been shuttered and put up for sale.”

• Grace Isford recommends Sebastian Raschka’s essay on “Understanding Reasoning LLMs.” “Developing a DeepSeek-R1-level reasoning model likely requires hundreds of thousands to millions of dollars, even when starting with an open-weight base model like DeepSeek-V3. This can feel discouraging for researchers or engineers working with limited budgets. The good news: Distillation can go a long way.”

• Laurence loved Tim O’Reilly’s latest essay, “The End of Programming as We Know It.” “It is not the end of programming. It is the end of programming as we know it today. That is not new. The first programmers connected physical circuits to perform each calculation. They were succeeded by programmers writing machine instructions as binary code to be input one bit at a time by flipping switches on the front of a computer.”

• One Riskgaming reader (and me) really enjoyed this piece from Frank Hoffman on “Risk: A Weak Element in U.S. Strategy Formulation” (PDF) from the Joint Forces Quarterly. “Too often reservations or questions about key assumptions are seen as bureaucratic resistance, instead of what professional planners expect from a rigorously structured method.”

• Finally, Laurence, Deena Shakir and our scientist-in-residence Sam Arbesman all enjoyed Charles C. Mann’s essay in The New Atlantis on “We Live Like Royalty and Don’t Know It.” “[Thomas Jefferson] lived in a world of horse-drawn carriages, blazing fireplaces, and yellow fever. But what most separates our day from his is not our automobiles, airplanes, and high-rise apartments — it is that today vast systems provide abundant food, water, energy, and health to most people, including everyone at the rehearsal dinner. In Jefferson’s time, not even the president of the United States had what we have. But few of us are aware of that, or of what it means.”

That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.

How the West lost the future of the automobile

The bad news is that America and Europe have mostly lost the global future of the automobile to China. The good news is that you can now experience why in our latest Riskgaming scenario, Powering Up: China’s Global Quest for Electric Vehicle Dominance, which we released this morning with all of the materials you need to play. This is our third Riskgaming scenario after Hampton at the Cross-Roads and DeepFaked and DeepSixed, and it skews much more heavily toward economics and business strategy.

The game, designed by Ian Curtiss, simulates in less than two hours the history of an American and an European automaker (represented by “US General” and “Autobauer”) as they navigate China’s political economy in the 2000s and 2010s alongside the rise of electric vehicles from domestic upstarts (represented by the “Shanghai Car Company”). Powering Up explores the risks and opportunities of joint ventures, the challenge of using intellectual property in the most profitable way and how China’s political system (represented by the vice mayors of Chengdu and Shanghai) constantly sand off the proprietary edge of foreign companies to benefit domestic industry. A trusty “foreign consultant” rounds out the party of six, who is incentivized to make investment deals happen.

Unsurprisingly given that I work at Lux, most of our Riskgaming scenarios are forward-looking, exploring the future often through the lens of technical innovation. Yet, when it comes to understanding how Ford, GM, Volkswagen and other automakers fell so far behind their Chinese upstarts, I have been frankly shocked at how few people understand what just happened, or why Ford’s CEO Jim Farley called China’s automotive industry an “existential” threat to the company in September.

One of the primary objectives of Powering Up is to help policymakers and business leaders identify the factors that led to such a catastrophic reversal, and make sure they never happen again.

The story is in both short and long. In short, as can be seen in these graphs, electric vehicle production in China started skyrocketing in early 2021 and has grown exponentially since then.

Why? Take the BYD Seagull, a quite-compact urban sedan with seating for four that is priced under $10,000 in China’s domestic market and reaches $12,000 with more features. It’s China’s best-selling model, and what makes it so attractive is what made the Ford Focus so successful upon its debut back in the 2000 model year: the quality-to-price ratio. It looks good, it’s sporty, it’s functional and it’s got some cool technology that’s attractive to middle-class consumers and particularly younger ones who otherwise can’t afford larger and more expensive wheels. As Michelle Krebs reviewed in The New York Times back in October 1999 about the ‘econobox’:

Among the most impressive small cars of recent years, however, is a new entry, the Ford Focus, which melds edgy styling with a spacious interior and superb handling.

After a month with four versions of the Focus -- the base and midlevel sedans, the station wagon and the sporty, top-line sedan -- I concluded that the car is well suited to buyers who want more than basic transportation, but still want an entry-level price. It is a subcompact I could happily live with.

And

With its edgy styling, ample space for people and cargo, great handling and numerous features, the Focus makes a big impression. It is a lot of small car for the money.

That’s what Chinese automakers increasingly provide and Western automakers are no longer able to produce given their margin structures.

GM once produced about $2 billion in profit annually from its China operations, about 10-15% of its total global haul. It also sold more vehicles in China than the United States for more than a decade. All of that has been reversed, and the denouement happened last week when GM announced a $5 billion write-down of its China operations.

GM’s cars no longer compete in the Chinese marketplace, where consumers are gravitating toward domestic brands, as this chart shows:

While many of these companies are unknown in the United States, they are widely popular brands locally.

The West’s reversal here is a rather perfect tale of Clayton Christensen’s The Innovator’s Dilemma. Gas vehicles from the West have dominated China’s domestic auto market for the past two decades. China has therefore focused on leapfrogging into electric vehicles, but early models were poorly received and the lack of comprehensive charging infrastructure prevented widespread consumer adoption.

As the nascent technology matured though, electric vehicles have now overtaken gas cars in desirability. Without an internal combustion engine, they require far fewer parts and have lower maintenance costs, making them particularly attractive for buyers seeking affordability. The limited range of early cars has been solved through better hybrid technologies, with BYD selling a $14,000 car that can drive 1,300 miles, or roughly the distance from New York to Miami. Meanwhile, GM killed off the Volt — it’s only competitor in the affordable electric vehicle market — and just this week killed off Cruise and its fleet of robotaxis. This is a company ensconced in the amber of the 1950s past, not one that is poised to seize the future of the global auto market.

So, the short story is that domestic Chinese manufacturers have been on a tear over the past three years, and that is radically different from the previous two decades where Western brands had quite a lot of profitable dominance.

The longer story is that this didn’t happen by chance. Scott Kennedy of CSIS estimated earlier this year that China’s central and local governments subsidized the development of the country’s electric vehicle industry by about $231 billion. That’s a massive number, and one that makes the $53 billion of subsidies for semiconductors in the CHIPS Act look like a pittance.

Yet, how much would you pay to essentially buy a large stake in the global auto industry? After all, it’s one of the few industries that’s measured in trillions of dollars of annual sales (about $3 trillion depending on how you count). Car factories also act as the bedrock of a country’s manufacturing industry, maintaining the resilience and vibrancy of vast supply chains of materials and parts that help cross-subsidize many other products as well. In that context, $231 billion feels almost a pittance given the scale and importance of cars.

The “sudden” victory of Chinese automakers was more than a decade in the making, dating back to the late 2000s with a push through strategic industrial policy. That policy is now reaping massive dividends for China, a pattern that will likely accelerate alongside the emerging global middle classes in countries like India, Indonesia, Brazil, Nigeria and elsewhere.

Ian Curtiss wrote an op-ed last week in Foreign Policy on the collapse of Northvolt, the European battery manufacturer that declared bankruptcy in its competition with China’s BYD. Ian points out that the writing has been on the wall for years:

Beijing literally announced it for everyone to see, attracted immense investment in these areas, and then facilitated and coerced technology transfers to progress their capabilities. Now Western automakers are seemingly surprised.

Instead of understanding how the winds were changing, policymakers and auto executives failed to see a future where technological and consumer trends from a foreign market could overtake U.S. and European momentum. Foreign investment flowed into these fields in China, technologies were co-developed, scientists were trained, and subsidies were leveraged for short-term gains.

How did governments and top executives miss this?

The answer is that they didn’t pay attention to the power of exponential growth, nor did they take the lessons of Christensen’s disruption theory and realize that the infant electric vehicle technology of yesterday would one day evolve into the market-leading models of today.

In short — and we see this often in Riskgaming — our strategies toward uncertainty and risk remained static in an otherwise dynamic world. We hosted launch runthroughs for Powering Up in New York, Washington and San Francisco, bringing together a few dozen people across EV technology, policy, journalism and government. While there are differences in the cultures of all three cities that played (as well as at our smaller launch events in London, Tokyo and Romania), the one consistency is that players tend to choose a strategy early and then see it through to the end of the game.

That’s unfortunately a direct mirror of reality. An executive takes a new role and develops a strategy, and then executes that strategy ad infinitum. Yet, what companies and governments need to do is assiduously update their strategies to match new information and changes in the market and the world at large. Autopilot may work for Waymo (and I finally got my first ride this week in SF), but cruise control is no way to approach industrial competition. Lack of attention and lack of responsiveness is how the West lost the future of the global auto industry. We can’t allow that to ever happen again.

Sign Up for Riskgaming events

We’ve now published three Riskgaming scenarios, and we are always inviting folks to both beta test new scenarios and join us at launch events in the United States and across the world. Want to join us and prove you have the strategic acumen to improve the universe? Click the link and we will add you to a future game.

😱 Sign up for future Riskgaming events

Podcast: “Introducing our new scenario, ‘Powering Up’”

So yes, our episode this week is on the same subject, but it covers a totally different angle. Now that Ian, Laurence Pevsner and I have hosted Powering Up across the United States (and Ian has hosted for policymakers and tech folks in Europe and Asia), we figured it’d be fun to just talk about all the observations we’ve been noticing, from differences in cultures of cooperation and competition to the important strategic implications of how players have been playing the game.

We got to record a live and in-person episode from our Menlo Park studio, and so tune in to hear us chat and then sign up for a future Riskgaming runthrough so you can join us at our next events.

🔊 Listen to “Introducing our new scenario, ‘Powering Up’”

Lux Recommends

• Deena Shakir loved Fei Fei Li’s conversation on the Armchair Expert with Dax Shepard podcast, covering everything from her humble origins to becoming one of the world’s greatest artificial intelligence experts. “Seeing Einstein's statue was kind of symbolic for me that I'm getting back to where really my soul wanted to be at. Because as a teenager, [landing] in a new country, trying to learn [the] language, deal with all the messiness, you know, Chinese restaurant, walking dogs. … I didn't forget about physics. I was taking physics classes in school, but I forget about the sense of love.”

• I love astronomy photos, and so I was delighted by the publication of new photos by Nasa’s Juno spacecraft of Jupiter. What’s interesting about this project (and the BBC has a great video on this subject) is that in addition to raw photography, Nasa is publishing open datasets of what Juno is observing, catalyzing a global community effort to enhance and optimize the visual depictions of the solar system’s largest planet.

• Laurence Pevsner enjoyed Samuel Firman’s essay in Noema on “Trespassing For The Common Good,” on how some English citizens are violating the notions of enclosure to reconnect humanity to nature. "Right to Roam has generated widespread debate about land access and justice in England and beyond — in large part thanks to its use of trespass as direct action. Making the case for a right to roam, and proactively modeling what it could look like, hundreds have mobilized to walk, swim, play and protest in off-limits locations around England: Kinder reservoir, Cirencester Park, Englefield Estate, Dartmoor National Park, Berry Pomeroy and Scots Dyke (an earthwork built in 1552 in the so-called Debatable Lands to mark the border between the kingdoms of Scotland and England).”

• If you want to read just an astonishing, trollish, and erudite interview, you shouldn’t miss Santi Ruiz’s interview with Edward Luttwak on his newsletter Statecraft in “How to Stage a Coup.” A big pull quote: “Now, you have to know what you're doing. What people running CIA personnel want to do is to obviate the need for intelligence officials to be intelligence officials, to be able to assess recruits, to understand them, to know what they are dealing with. They want to do this by getting only people who have never had contact with any foreigner (which, by the way, doesn't assure anything). In other words, if you want to improve the CIA, you have to empty out the building. You have to fumigate the building — exclude any technical people who really should belong to one of the 17 intelligence organizations that cover electronics, photography, and everything else. Nevertheless, CIA has some of those people — Those people should be transferred. Having transferred them, you restaff with young Americans interested in foreign parts who have traveled around and picked up a language or two. We start with that. And if you're worried about counterintelligence? Your professionals should have the feeling in their fingers. And if they don't have it, they should sell insurance.”

• Finally, and I honestly haven’t had time to process it, but Google announced a major quantum “breakthrough” with its Willow chip this week. Meanwhile, noted quantum computer scientist Scott Aaronson discussed the details and critic Gil Kalai wrote about it as well. Is quantum the next frontier or just another slow walk of innovation? I guess that depends what parallel universe you are living in, and in this universe, I didn’t have time to do the research.

That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.

Modeling the complex and diverse threats that are targeting the world’s most important election

For all the talk about the revenge of the bipolar or multipolar world, the honest truth is that America’s presidential election is the definitive event in international relations. Every four years, global leaders wait with bated breath to see how the world’s sole remaining superpower tacks its sails.

That decisiveness also means that more and more of those leaders are no longer passively holding their breath for Election Day results, but are instead using the full spectrum of tools available to them to actively influence the election’s outcome. That can mean propping up one side or the other; fomenting chaos, nihilism or cynicism; or just extracting cash from the ever-burgeoning economic scope of U.S. elections, which this year has breached $14 billion across 11,000 political groups — and that’s just what’s disclosed.

Worse, the complexity of threats to U.S. elections continues to deepen. Artificial intelligence and big data combine to offer influence operations a level of personalization that was non-existent in previous cycles. The lives of Americans have rapidly digitalized since Covid-19 and the 2020 cycle, offering more surface area for hackers, cybercriminals and others to endanger the vote. Then there is the inexorable rise of the influencer industry and TikTok concomitant with the decline of traditional news sources.

Appreciating this complexity and expansiveness is hard with policy memos — which is where Riskgaming comes in. With just days before Election Day, I’m excited to publish our second scenario, DeepFaked and DeepSixed: AI Election Security and the Future of Democracy, which incorporates the diverse threats that confront U.S. security officials with the dizzying diversity of actors who can potentially offer clues to solve them.

DeepFaked and DeepSixed is a bit different from our previous political and economic simulations, which tend toward groups of 4-8 people negotiating, haggling and cajoling over the course of several hours. Instead, this game centers on an intelligence fusion center at the White House where 54 people come together to offer information and to seek out patterns of threats against American democracy. Player roles come from across government, international organizations, the private sector and non-profits, and they are all designed to offer both a crisp backstory as well as essential clues relevant to that character’s background.

During each of two scenes — one representing the events before Election Day and the other during and after the ballot — players walk around the fusion center trying to connect their clues to those from other players. When they identify a potential threat, they submit the details to the “center director” for processing. After a debriefing at the end of the scene, points are offered for correctly identified threats and lost for threats that didn’t pan out. It’s a cooperative game, with everyone racing against time and the chaos to seek signal in the noise.

We played the game earlier this year with our friends at TheFuture.us, a “policy studio that forecasts the coming tech disruptions to future-proof America,” which inspired the game’s design. That event included secretaries of state, Senate candidates, policymakers from across local, state and federal government as well as a number of tech CEOs and venture capitalists.

This week, we hosted two parallel runthroughs in New York and Washington with a collective 100 players spanning politics, tech and finance. Our special guest was Senator Mark Warner of Virginia, who spoke about his efforts to secure American elections, and then proceeded to role-play his character, seeking out help on a threat the country faced before the election (he succeeded).

Compared to our other riskgaming scenarios, where it can take a good 15-20 minutes for some players to fully inhabit their characters and begin making strategic decisions, this game’s simpler design helped everyone dive right in. There were agency turf wars, arguments over evidence, and even a potential threat identified all within the first minute of the experience kicking off.

However, when all the points were tabulated for both scenes, New York scored 10.5 and our Washington crew scored 5.5. Why the gap? A few observations, which you can hear more about on the Riskgaming podcast this week between me and our director of programming Laurence Pevsner.

🔊 Listen to “Introducing our new scenario, DeepFaked and DeepSixed”

First, we noticed in New York with the tech- and finance-centric crowd that there were more of what Laurence dubbed “super-connectors” — people who tried to connect together others’ clues and not just their own. While playing, they would pick up on a pattern and would actively work to bring those people together to trade notes. This helped to build signal quickly under the tight conditions of the game. There were less of these super-connectors in DC, where players tended to be more goal-driven to seek information directly relevant to their own character.

Second, we observed that in Washington, some people dismissed their information out of hand and didn’t share it with others. They had read their clue and decided that it wasn’t likely to be relevant, and so they had decided to withhold it to make it easier for everyone else to find information that might be more impactful. The downside to that analytical filtering though is that crucial facts about some threats to the U.S. elections were entirely lost. In New York, we saw less of this filtering and more of a perspective that any information might be useful to someone somewhere to connect a stray dot. That helped players discover threats serendipitously.

Third and less surprisingly, both groups performed better in their second scenes than in their first ones, as they got used to the game and the group. It’s an important pattern we see in the real world: groups that have previously worked together are going to perform better than people who have never met each other. It’s critical to build relationships and a working culture before the security threats begin.

That’s the game — it was a blast. And now all the materials needed to play it are available on the Lux Riskgaming website.

Are American elections safe? Yes, and no. As Senator Warner was describing in his remarks, federal agencies are working tirelessly to protect the vote from foreign interference and emerging technologies. For instance, just yesterday the FBI, ODNI, and CISA determined that several deepfake videos circulating online were planted by Russia to foment disenchantment with the democratic process. These agencies are doing the best they can under the circumstances.

What’s missing is that the private sector is weakly engaged in these national security conversations. It’s hard for dozens of companies with relevant information to coordinate with local, state and federal election officials plus the intelligence community plus international counterparts. There is just too much surface area.

Second and more challengingly, elections are held infrequently. Unlike, say, financial transactions which are rigorously and continuously monitored by well-staffed security operations centers — no such infrastructure exists for U.S. elections, which are organized by thousands of different local counties. Every four years, these election agencies have to rebuild their security playbooks for new technologies and new threats with help from federal institutions like the Cybersecurity and Infrastructure Security Agency. Elections need surge capacity to protect them.

Third, while nearly all counties lack sufficient resources to protect elections, the reality is that a small percentage of counties in critical swing states will determine the outcome. For those who wish to threaten American elections, these are ripe targets. Not only should we have a reserve force of cybersecurity and other professionals prepared for each election cycle, but those resources should be more heavily deployed to the greatest hotspots on the map.

Those are just some of our findings with this new Riskgaming scenario. My hope is that as more people play this game and internalize the complexity of election security and emerging technology, they will come out energized to confront these challenges to American democracy. Security is always an arms race even for a superpower — but that doesn’t mean we’re DeepSixed.

Links

• DeepFaked and DeepSixed Homepage

• Game Scenario and Rulebook

• Lux Riskgaming Homepage

• This week’s podcast discussing the game

Sign up for Riskgaming!

Excited to join a live Riskgaming event with us here at Lux? We have a proper signup form now, and we’d love to have you come to our next installment.

✍️ Sign up for future Riskgaming events now

The Orthogonal Bet: Exploring the history of intelligence

In this episode, Lux’s scientist-in-residence Sam Arbesman speaks with writer, researcher, and entrepreneur ⁠Max Bennett⁠. Max is the co-founder of multiple AI companies and the author of the fascinating book, ⁠A Brief History of Intelligence⁠: Evolution, AI, and the Five Breakthroughs That Made Our Brains. This book offers a deeply researched look at the nature of intelligence and how biological history has led to this phenomenon. It explores aspects of evolution, the similarities and differences between AI and human intelligence, many features of neuroscience, and more.

🔊 Listen to “Exploring the history of intelligence”

Introducing our newest initiative, Lux Labs

Before we close out, we have an audacious vision at Lux to fund the most pathbreaking companies in the world. Sitting parallel to our traditional venture funding is a new initiative we launched this week called Lux Labs. As we described in the announcement:

Lux Labs formalizes a pattern that we have used repeatedly and to great success across Lux’s funds, where we partner with ambitious people with brilliant and proven ideas and offer them an entrepreneurial pathway to transition from the intellectual ferment of the research lab into the competitive free-for-all of the marketplace.

Our own Josh Wolfe discussed Lux Labs with Allie Garfinkle at Fortune Term Sheet:

Venture is in a pullback, Wolfe says, making this the ideal time to pursue a differentiated approach. Lux Labs will offer hands-on support, like IP rights, company formation, board member recruitment, and building networks.

“Sometimes it starts with a thesis,” said Wolfe. “Sometimes it starts with a specific breakthrough. Sometimes it starts with a breakthrough scientist, an individual. We’ll find a team and actually convince them that they should spin out.”

Come join us! And check out our one-minute teaser on YouTube.

Lux Recommends

• One of our friends at Lux, Valentin Pitarque, sent us Jared Cohen’s essay in Foreign Policy on “The Next AI Debate Is About Geopolitics.” “America cannot achieve AI autarky, especially when it comes to data centers. AI software must run on AI hardware somewhere—the question is where. The United States needs to develop a list of partners with the capacity, will, and aligned interests for a secure global data center buildout.”

• In a stunning analysis, Dylan Patel and colleagues at Semianalysis track down “Fab Whack-A-Mole: Chinese Companies are Evading U.S. Sanctions.” “Sanctions violations are egregious. SMIC produces 7nm-class chips including the Kirin 9000S mobile SoC and Ascend 910B AI accelerator. Two of their fabs are connected via wafer bridge, such that an automated overhead track can move wafers between them. For production purposes, this forms a continuous cleanroom and effectively one fab. But for regulatory purposes, they are separate! One building is entity-listed by the U.S. and working on advanced logic for AI chips, a clear national security concern. The other is free to import ‘dual use’ tools as it runs only ‘legacy processes.’ Do you believe they aren’t sharing anything over the wafer bridge?”

• We had Fluke author Brian Klaas on the RIskgaming podcast earlier this year, and his new essay in Aeon is a great dive on “Without chaos theory, social science will never understand the world.” “By smoothing over near-infinite complexity, linear regressions make our nonlinear world appear to follow the comforting progression of a single ordered line. This is a conjuring trick. And to complete it successfully, scientists need to purge whatever doesn’t fit. They need to detect the ‘signal’ and delete the ‘noise’. But in chaotic systems, the noise matters. Do we really care that 99.8 per cent of the Titanic’s voyage went off without a hitch, or that Abraham Lincoln enjoyed most of the play before he was shot?”

• Sam recommends “Retro 80s Versions of Tech Company Logos” as well as “The ABC of Fonts,” a three-part series by Simon Garfield on “Albertus, Baskerville and Comic Sans.” “In a now-famous thought experiment, the type designer Cyrus Highsmith once tried to plan a day in New York without Helvetica. A tough assignment, for it was everywhere: dollar bills, breakfast cereals, morning newspapers, subway lettering.”

• Finally, wargaming (the far less interesting variant of Riskgaming if I dare say so myself) got a nice profile in The Wall Street Journal this past week in “A Million People Play This Video Wargame. So Does the Pentagon.” “Whether AI and advanced software actually improve wargaming and preparations for war is a question sparking battles of its own. Warfare is so complex—buffeted by factors ranging from equipment and strategy to politics, weather and corruption—that modeling all the inputs entails parsing an almost infinite number of variables. Quantifying unquantifiables such as military morale requires arbitrary decisions.”

That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.

The world is hitting an entropic apex. We need new tools to understand chaos and crisis.

It’s a really big day over here at Lux. About a year after we first previewed the Lux Riskgaming Initiative here on “Securities”, I’m delighted to announce that we launched Riskgaming publicly today, including publishing the complete game kit for our first scenario, Hampton at the Cross-Roads, which explores climate change and the future of America’s maritime security. Paper copies of the scenario booklet have just arrived — and they look gorgeous.

Margaux MacColl of The Information, who joined us for a runthrough last week, wrote up a full and exclusive story on riskgaming and its launch for the publication’s Saturday Profile this morning. You should (of course) read the whole thing, but my favorite bit was this:

Up in Lux’s 11th-floor Manhattan offices, I received the role of local union president and spent large parts of the evening bartering with Mike Koscinski, a startup software engineer, who played as a district congressman. I begged him to take my $2 million and in return support an increase in union jobs post-hurricane. I thought we had an agreement until he disappeared into a closed-door meeting with the CEO of the biggest company in town—my sworn enemy. When he finally emerged, he rushed to reassure me he hadn’t supported the CEO’s plan to cut jobs. “I’m standing up against some powerful entrenched interests,” he said. “They wanted me to go scorched earth, and I said, ‘No, sir!’”

So what is riskgaming? Riskgaming is a scenario played by a a small group that simulates a complex problem. We’ve written four scenarios so far, which covered climate change and national security, the ethics of doing business in China, AI and election security, as well as AI and national security (AI is not our obsession, but it is the obsession of many people these days!). The way I approach designing these scenarios is to give each player the freedom to make their own choices within the constraints of their own incentives — politicians want to get elected, CEOs want their stock prices and valuations to go up, and journalists want attention and influence. Couple that open game model with well-researched stories and scenarios, and you have a combustible mix of negotiation, education and fun.

It’s been an adventure bringing Pentagon-style wargaming into the deep tech / hard science world over the past year. I’ve played hundreds of board games thanks to my husband’s fanatical obsession (we have about 650 board games and 600 square feet of living space — you do the math on that), and I have also participated in mock academic policy simulations in the past. With riskgaming, I wanted to build a unique experience from the ground up that took advantage of the best practices from the defense strategy world while opening these experiences up to the wide range of leaders that Lux engages with at the intersection of science, business and policy.

In the tradition of the very earliest startups we back here at Lux, I started simply: hand-written documents, a sketch of a story and a scenario, some pretty terrible imagery from OpenAI’s DALL-E, and very accommodating founders from the New York City ecosystem who showed up at Lux’s office with absolutely no idea what they were about to get themselves into. Their collective feedback was invaluable, and allowed me to rapidly iterate Hampton at the Cross-Roads and the principles of riskgaming more broadly. The “product” we offer with riskgaming today is so much more compelling and profound than what we first started with, and that’s thanks to the helpful community that makes New York — and America’s — startups grow and thrive.

Since those early forays, we’ve had hundreds of players join all four of our riskgaming scenarios, ranging from early-stage founders and software engineers building at the cutting edge of what’s possible to combatant commanders, think tank presidents, Fortune 500 board members, congressmen, magazine editors, state-level secretaries of state (the chief election officials of most U.S. states), U.S. Senate candidates, federal agency heads, and a slew of others.

We’ve had the opportunity to partner with great organizations including Mike Bloomberg and his team at Bloomberg on the future of AI and national security, as well as Miles Taylor and Evan Burfield at TheFuture.us alongside Sam Englebardt at Galaxy Interactive on AI deepfakes and America’s election security (an experience written up by Dan De Luce and Kevin Collier of NBC News last month).

At its core, riskgaming is about empathy, understanding the incentives and motivations of very different types of people and why some can work together and others can’t. With our scenario on the future of AI and national security for instance, we had tech CEOs and military generals essentially switch jobs for a day, with flag officers taking up the leadership of early-stage startups seeking exponential growth while tech CEOs negotiated the funding of the Pentagon’s annual budget. Hilarity ensued — both sides corrected the other and pointed out the obvious mistakes they were making. That mirth transcended to education and ultimately to empathy — the realization that the world isn’t a devious design dropped down from on high, but the aggregate outcome of innumerable individual decisions that are chosen under constraints and incentives.

As I evolved riskgaming, I narrowed our focus to the most complex challenges in the world that I could find, ones where individual people have vastly different reasons to find a resolution. In our first scenario Hampton at the Cross-Roads, a shipyard that builds America’s aircraft carriers becomes a battleground over job growth, unionization, fighting against China, protecting domestic manufacturing, balancing regional economic growth as well as the individual machinations of politicians at different levels of government. There are no easy answers here, nor are there right ones. I’ve watched about 16 teams play through the scenario, and each time, people invent new strategies and find new points of negotiation that no one else has found before.

That’s what’s I’ve been working on over the past year here at Lux. So what happens next? First, we’re transitioning our editorial brand here from “Securities” by Lux Capital (with those pesky quotes) into just Riskgaming (no quotes required, thank god). I’ll still be writing up and publishing the newsletter and podcast as before, but they are going to center more specifically around the themes of risk and decision-making that have always been our most popular topics (our top-ranked podcast episode remains “Risk, Bias and Decision Making: Pre-mortems” with the late Daniel Kahneman alongside Annie Duke, Michael Mauboussin and Josh Wolfe).

The newsletter and podcast in turn fuel our live events. We host riskgaming events in New York City, Washington DC, San Francisco and any city where we can congregate an interesting group of thinkers and leaders together to solve humanity’s greatest challenges. We’ll be designing new riskgaming scenarios just with Lux as well as with existing and new partners — if you or your organization is focused on a uniquely complex challenge that doesn’t get enough attention, feel free to reach out.

Finally, we’re always on the hunt for talent. If you are interested in working with Lux full-time or as a part-time freelancer, we have roles ranging from guest programming and events production to scenario design and essay writing. Reach out to me with a portfolio if you love the subjects we explore and want to help us build.

If this were a startup, I think we’d be at the seed stage shooting for a Series A in a year or two. It’s been a great year, and so much more to look forward to with riskgaming. For the thousands of readers and listeners who check in with me and Lux every week – thanks for being here, and I look forward to continue highlighting the world’s challenges. And one day, I hope you all can join us live for a riskgaming session yourself.

Maintenance and the Eclipse: Two short podcasts

I’ve been heads down on this riskgaming launch the past few weeks, so apologies for the slow progress on the podcast side. But we have two great short episodes to catch up on.

First, our scientist-in-residence Sam Arbesman and I talk about last week’s eclipse, and its meaning for community and science in a polarized world. It’s our rare fully uplifting episode, and a delayed echo of my piece on the James Webb Space Telescope in “Scientific Sublime” from mid-2022.

🔊 Listen to “The Zone of Totality with Sam Arbesman”

Second, Josh Wolfe and I discuss the most recent Lux quarterly LP letter, where we focus on the venture investment opportunity around maintenance broadly conceived. As the world hits an entropic apex (the subject of our LP letter a year or two ago), the need for repair and maintenance of our technological and physical infrastructures is increasing dramatically, forcing new solutions to be built. We talk about the thesis, companies we think are compelling, and what happens next.

🔊 Listen to “Lux and the Art of Startup Maintenance”

Lux Recommends

• Sam points to a snarky article on the ‘Qommodore 64,’ a Commodore 64 that’s designed to simulate IBM’s 127-Qubit ‘Eagle’ quantum processing unit (QPU). The results of the two computers competing with each other? “[s]arcastic researchers say 1 MHz computer is faster, more efficient, and decently accurate” than its quantum brethren.

• Last week in “Pacific Stratagems,” I emphasized the frenzy of global diplomatic activity that took place on April 10th. Katsuji Nakazawa picks up the thread in Nikkei Asia, writing how the timing coincided with the passage of America’s Taiwan Relations Act back in 1979. “A countermeasure was also necessary if Xi was to save face in front of his domestic audience. According to Taiwanese media, the Xi-Ma meeting initially had been set for April 8 but was delayed two days. Likely, this was deliberately done so Xi's tete-a-tete with Ma would coincide with the Japan-U.S. summit.”

• Tess van Stekelenburg recommends an hour-long discussion hosted by Stanford’s Eric Nguyen on “EVO: DNA Foundation Models.” Evo, which was launched via the Arc Institute, has taken the Bio + ML world by storm, and Eric is an expert at what the model does and the bio applications it unlocks.

• Sam enjoyed OpenAI researcher Richard Ngo’s short story “Tinker,” which was published by Asimov Press and takes the heady perspective of an AI chip. “My memories of the early stages are hazy—I spent months predicting internet text, pictures, and videos, without full awareness of what I was doing or why. It was only once I began interacting with humans and other AIs that I gained a better understanding of my situation.”

• I enjoyed a short article on Curbed where Christopher Bonanos tracks down “The Hardest-Working Turnstile in the [NYC] Subway.” “They are obviously built to last, and, he notes with some pride, have vastly outlived their design expectations: 'One of the testaments is just how many sheer cycles they do without failure, without maintenance,’ he says. ‘I mean, those things can turn hundreds of thousands of times without a maintainer even needing to do anything.’”

• Finally, fractals are incredible mathematical entities that have enticed viewers for decades thanks to the work of Benoit Mandelbrot. But they have always been in our mind’s eye, and never in nature. Now, Sam points to news that scientists have discovered the first fractal molecule. “It’s an enzyme used by a species of cyanobacteria to produce citrate, which was found to naturally assemble itself into a specific fractal pattern called the Sierpiński triangle.”

That’s it, folks. Have questions, comments, or ideas? This newsletter is sent from my email, so you can just click reply.