MBI Daily Dose (July 05, 2025)

Companies or topics mentioned in today's Daily Dose: Student loan, Progress in AI, AGI implications for rise and fall of nations, Traveling

Apollo published a presentation titled “The pause on reporting delinquent federal student loans to credit rating bureaus has ended: Implications for consumer spending”. This is, unfortunately, one of the tangible headwinds for consumer discretionary spending going forward. Some excerpts:

45 million people have a federal student loan. 24% are delinquent among those obligated to pay.

Eleven million consumers could see their credit scores decline and therefore lose access to borrowing if they don’t start repaying their student loans.

Millions of people had their student loan payments paused during the pandemic, but now they have to start paying them back again, which makes it harder for households to afford other things, and that can slow down consumer spending.

Tyler Cowen made the point that while progress in AI has been “staggeringly high” than expected so far, you probably shouldn’t expect such rate of progress to continue. Some excerpt from his post:

It would be interesting to chart the rate of LLM progress, weighted by how people actually use them. The simplest form of weighting would be “time spent with the LLM,” though probably a better form of weighting would be “willingness to pay for each LLM use.”

I strongly suspect we would find the following:

1. Progress over the last few years has been staggeringly high, much higher than is measured by many of the other evaluations For everyday practical uses, current models are much better and more reliable and more versatile than what we had in late 2022, regardless of their defects in Math Olympiad problems.

2. Future progress will be much lower than expected. A lot of the answers are so good already that they just can’t get that much better, or they will do so at a slow pace. (If you do not think this is true now, it will be true very soon. But in fact it is true now for the best models.) For instance, once a correct answer has been generated, legal advice cannot improve very much, no matter how potent the LLM.

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What if Cowen’s call for subdued expectation proves to be premature and we do end up in “AGI” land? I can imagine some eyerolls here (perhaps including yours truly), but I have to admit if someone explained “Deep Research” to me three years ago and asked me to estimate my probability of such a technology being available at nearly zero marginal cost, I think I would have estimated the probability of that being reality to be ~5%. What that tells me is it’s better to be a bit humble about my own ability to predict the pace of AI’s progress and be more psychologically and intellectually open to more wide ranging possibilities.

To that point, Rand published a provocative report last week titled “How Artificial General Intelligence Could Affect the Rise and Fall of Nations”. The report outlines eight potential AGI futures, as shown below.

In the conclusion section, the report summarized the implications of these potential AGI scenarios:

I am currently traveling with my family for the 4th of July weekend, so I didn’t read the entire report. But I did feed the report to NotebookLM and listened to the podcast version of it which I think did a pretty good job of compressing the report.

Speaking of traveling, we came to this Airbnb (a ranch in the middle of nowhere) in California. I had to jog for three minutes to record the whole place (video is at 2x speed), and there are still parts of the ranch (for example, a swimming pool and a farm with several other animals) that weren’t captured here.

It’s hard to find gems like this at a reasonable ADR except for Airbnb ;)

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