AI, PE, and the Landscape of the American Economy

Whether your local florist was recently purchased by FLOWERCORP and you can now only buy begonias on subscription, or you’re a senior citizen Walmart greeter currently training your LLM replacement how to wave in a friendlier manner than you ever could, all American lives have been touched by Artificial Intelligence and Private Equity.

Both AI and PE promise lowered costs through technological and scaled efficiencies. So then, why do they make things more expensive and worse?

Last year, Blackstone purchased Jersey Mike’s and now your sandwich is smaller and costs more. You are free to go to whatever local sub shop is still standing in your previously-charming town if Blackstone hasn’t replaced it with a Panda Express yet. Are these the same guys that own our houses? I think they own the houses too.

Although, to their credit, Blackstone is financing AI projects to replace lawyers, so they must have an altruist among their ranks somewhere on 345 Park Avenue.

Private equity quietly sits behind every door in the American economy from healthcare to entertainment, but has found its perfect home in AI. Remember when corporations would boast about the shear number of people they employed and the gigantic positive impact those salaries have on the local communities?

Now PE is asking each portco to evaluate who actually is immune from automation. Forget offshoring, they are out of luck too. AI is a proxy for human thought. Its implementation decreases a corporation’s dependency on actual brains. Not only does the customer now place their order at McDonalds kiosks, but at many companies social media now manages itself, and GPT builds the pivot tables.

Meanwhile, on any podcast this week, the guest and host were chest puffing about how their sons are going into the trades because AI will never be able to do that stuff. Give it five years.

Optimus robots will be doing your cooking cleaning, plumbing, HVAC, framing, and flooring. We are in the midst of a technological revolution that will come for every current iteration of a job that we have. Human dexterity is a problem that AI will solve in the near term. We are in a race to build the infrastructure to replace ourselves at work and home and the starter gun actually fired November 30th 2022 when Sam Altman debuted Chat GPT. It was the only iPhone moment we have had this decade.

Computers now speak English, we can throw away the keyboards. It’s time to build the infrastructure behind AI. The greatest example of institutional capital going all in on AI infrastructure are Vanguard and Blackrock signing off on Elon’s new $1 Trillion dollar pay package at $TSLA ( ▼ 0.31% ). The Ex-DOGE Chairman’s somehow successful affordable-electric-car company is leveraging the profit from consumer automobiles to build robo taxis to take on Uber and humanoid robots to take on janitors. Here is my take below on why Tesla’s board approved the biggest individual pay package since King Tut.

Even the DOGE-less federal government is participating in the AI hype. The White House announced November 24th, 2025 that it is launching the Genesis Mission to expedite discoveries in science, engineering, healthcare and energy through the development of a centralized national artificial intelligence powered by new and old super computers with access to complex data sets across the entire federal government.

This may be a science and infrastructure initiative on scale with the Transcontinental Railroad, Manhattan Project or Apollo Missions, but those examples operated at significantly larger portions of GDP than our Pre-Genesis spend on AI according to Goldman Sachs. Will AI spend reach the level it took to build the railroads?

Outside the stewardship of the public sector, Private Equity is off to the races grabbing a piece of every AI firm on earth. I met with two young Y-Combinator AI founders this week. They both had disheveled hair, bleary eyes, and each separately asked me how am I implementing AI at Freddy Media. I was sort of embarrassed to tell them each that I only use AI to write my newsletter.

Some PE backed Founders make entrepreneurship look like a Montessori school program where playing is as important as learning, or strung out founders like those guys who gave too much of their company away for quick money. However, new technology allows founders to move faster and bring their vision from zero to one without funding or salaries due to AI. That $500,000 Y Combinator grants founders to find themselves is no longer a great deal when most of the startup costs have disappeared.

Those who take action and build businesses now will become the greatest entrepreneurs the world has ever seen. All major companies are in the process of leaning down to operate like these startups unburdened by bureaucracy and overhead. The modern entrepreneur will operate like a content creator with a small team pulling off revenue numbers per employee that Microsoft, Apple and Google never could have imagined.

My hope is that AI sparks entrepreneurship in America, and our rate of new business owners 10X’s over the next decade. This could create so many positive outcomes and give disaffected Millennials and Gen Z renters a leg up on the Boomers and Gen X’ers who will be late to adopt AI. Decentralized and revitalized entrepreneurship is the way forward for our country. Think main street powered by AI. The future is bright.

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