Sycophantic AI, battery tech, and AI gaming
Lux Recommends #459
Which of the two Manhattan Projects was the most important, why ChatGPT suddenly got so obsequious, and what happens when AI writes video games. Plus a look at how tech is turning the Middle East back into a pivotal region.
From Lux Capital
This week, Lux’s Josh Wolfe sat down with Ed Ludlow on Bloomberg Technology to explain why the United States needs to invest in R&D now, how Lux sets an appropriate bar for science risk in the ventures in which it invests, and what it means to fund the “slow burn of serendipity.” Noting that academic research may take a decade or more to turn into a marketable good, Josh noted in a new report in the Wall Street Journal that Lux is “trying to help scientists find new paths so none of these great works end up as Rembrandts in the attic.”
From around the web
1. Might vs. math
If you’re looking for conversation topics over Memorial Day weekend, I’d point you to ’s “The Other Manhattan Project,” in which he explores the impact of Simon Kuznets’ National Income and Product Accounts (NIPA).
Oppenheimer gave us history’s first atomic weapon, and Kuznets gave us history’s first means of calculating the size and composition of a national economy. As for their relative importance, allow me to offer a provocative debate topic: “RESOLVED: America would have defeated Japan without the A-bomb but might have lost to the combined might of Japan, Germany, and Italy without the NIPA.”
2. Yes-bots
Laurence Pevsner recommends a new piece by on human-AI alignment, or the extent to which our interests, purposes, and intentions are — or could ever be — aligned.
It’s bad that [Chat GPT] 4o was overly sycophantic. But I was also surprised that people were surprised. OpenAI is a research lab, but they are also a product company. Companies want to make their products more engaging. They invent new algorithms, run A/B tests, and if the right numbers go up (e.g. “thumbs up” reactions) without obvious negative side effects, they ship changes at scale…
So a sycophantic AI was inevitable. Like a best friend who justifies your dumbest romantic decisions, or a president who surrounds himself with yes-men, most of us choose enablement, consciously or not. “Psychological dependence” can also be defined as “user retention.” “Addictive” is a synonym of “sticky.”
3. Atoll reads
The Onion is always good for a laugh, but our scientist-in-residence, Sam Arbesman, found the site’s new list of “bestsellers” for June 2025 — a lampoon of the AI-generated fake book titles that recently ran in the Chicago Sun-Times — particularly funny.
4. People’s Republic of Power
This week, our editor Katie Salam came across ’s look at China’s solar panel and battery industries — and why they are eating the West’s breakfast, with or without tariffs.
The reactionary answer is that they’re only cheap because of unfair subsidies and exploitative working conditions. But that’s an outdated perspective on what’s actually happening. The idea that China could only compete with Western manufacturers by cutting corners rather than genuine expertise stinks of arrogance. China does provide subsidies to battery manufacturers, and there is convincing evidence that the country has relied on forced labour in some of its supply chains. I’ll address these points later. But, China mainly dominates these markets because it has produced a long-term industrial strategy for these technologies and has honed an optimised, modern supply chain as a result. … It has developed an incredibly competitive market with companies fighting for any edge to cut prices and beat competitors.
5. AI Mode
I’d suggest new reporting in Bloomberg on HoYoverse, the video game company that finally broke open the American market for Chinese games and is now spinning out a company focused on AI-generated and enhanced gaming.
[Hoyoverse founder Cai Haoyu is] segueing his video game success into a separate, California-based artificial intelligence startup called Anuttacon, where he’s researching the use of cutting-edge technologies to develop nontraditional interactive media. …Cai has recruited about a dozen former HoYoverse employees for the startup, according to a LinkedIn analysis. His first project is a spacefaring video game where the player interacts with a cute girl whose dialog is AI-generated.
6. If Trump builds it
Finally, Laurence recommends an FT op-ed by Josh Zoffer, who checks in on U.S. President Donald Trump’s progress on his promise to bring back manufacturing to the United States. Josh was on the Riskgaming podcast back in April.
If Trump really wants to supercharge US industry, he needs to do more to give the next generation of American manufacturers the (literal) tools to compete. He should start by ensuring that the sovereign wealth fund he has asked Bessent and commerce secretary Howard Lutnick to draw up includes an asset-backed equipment finance programme.
