Never mind, let’s set out in a playful mood, beginning with a question from a Guardian quiz: “What’s the link: Nevada; Arcadia; Saxon; Azure…?” If you’re having trouble, I can help you out by adding a fifth item: “X  Æ A-Xii”.

Has that extra item given the game away? We’ve all glimpsed “Lil X”, as his nursery pals call him. He was the adorable imp, the one Elon brought to the Oval Office that day and who was chattering away in his own world, picking his nose, while Donnie was mouthing big-boy strategies. You see, the answer to my quiz question is that these are all names of Elon Musk’s children.

Wasn’t that Oval moment touching? Doesn’t every glowing dad think of taking the kid to the office — not just to show him or her off or to prove how domestic and human he is, but to let the toddler smell the office and know that POWER is more than the hum of business machines and the dismissal of minions. 

At the latest count, Elon Reeve Musk, aged 55, had 14 children. Though he is not shy about admitting there might be more. Indeed, he’s a naughty boy proud about how many others there could be, hiding behind that curtain, waiting to jump out and goose their dad. After all, a guy can’t keep count of everything — you wouldn’t expect Musk off the top of his cloudy head to know to the nearest 10,000 just how many people he rendered unemployed in his DOGE crusade. Nor that various estimates put the number of deaths caused by the withdrawal of USAID at sort of 640,000. Musk counted zero.

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Of course, most of those unlucky 640,000 were far away — if you’re weak on geography, just think of it as “out of sight”. We are accustomed to that tradition now. Strangers are dying all the time. It’s an elementary aspect of strangeness. Nothing personal. 

It’s the “nothing personal” that upsets me. The best thing about Elon is the silly-kid angle. To see him playing with Lil X reminded me that we seldom see Donnie with Barron (and I worry about Barron) sharing a hot dog at a ball game or playing chess together. And indeed, chess tells you a lot about Elon. He used to play. I bet he’s pretty good, yet easily wiped out by masters. Like Garry Kasparov resigning against Deep Blue back in 1997. So Elon has said chess is over. It’s just a matter of so many finite moves. No point in playing. That must be hard for a smart four-year-old who dreams of mating dad. And hard for Elon who does seem to aspire to being four.

That age has so little shame or doubt in being selfish — and selfishness is necessary because it’s total (as in totalitarianism). Perhaps that’s why Elon is in his element playing with children? It’s being with grown-ups that makes him sweat. So he’d go to Mars where he could jump two-and-a-half times higher than here. Have you ever considered what diminished gravity might do for elongation?  

So spare us those snarky know-alls marveling at how a genius couldn’t keep his fly zipped. (No one has ever said Elon enjoys the sex. It’s just a progressive duty for him.) Instead, what one has to recognize in Elon is the populating generosity, the sacrificial impulse prepared to give up his own brain cells, his vital bodily fluids and 20 minutes now and then with a view to spreading genius as if it was manure.

Remember, folks, this Elon is 55 and promulgating his eyes out for science, for the future, for America. He’s being horny for posterity — excuse my language, but if you’ve ever sexed with anyone that old you know this is no joke, and in his steadfast duty of impregnation Elon is wearing himself ragged. For us. For civilization. For peanuts. And now, he has been appointed to co-lead a project to examine the future conduct of war. 

Like a child playing with toy soldiers, Musk wants an army of mini-mes. And when it comes to armies, he knows sufficient principles of engineering to understand discipline and marching in step. That’s all that works if the infants begin to get the idea that in his natural forgetfulness they don’t matter individually. And Elon is so famous that he could hardly go anywhere without raising clouds of awe and contempt. How could such a dad take you out for a burger and a movie? As if a kid doesn’t prefer his father being just one of the great crowd of dingbat dads. Imagine how hard it is to be the child of the richest man on earth without succumbing to a fatal lassitude, a catastrophic carelessness, or even some whispered thought of revenge. 

But Elon doesn’t know how many children he has had. He’s open to being open-minded — and he enjoys a joke or two about his affect sometimes seeming vacant. But his apparent indifference can be read as a kind of universal paternalism along the lines of: “Imagine me as the father of all children… Et cetera.” You know where that loftiness is headed. Et cetera isn’t just a boasting allusion to the X that Musk owns, it’s a computer’s vision of delicious series.

Amid all the mysteries that await our far-away future, there will be the uncertainty over whether Elon was an actual, breathing human being, or something less provable but more enduring — an idea? A fiction? A commercial?

Of course, there was no way we were ever going to get Elon to Mars (and he had talked about that happening in the next 10 years — by which time he would have been set for Medicare). So try to think of an alternative scenario: suppose Elon was to reveal that instead of going to Mars he is already from there. How did he get here? By magic, by religion, by being beamed up, or just garden-variety AI. Was he sent as a torment or a tease? Your call. 

You see, I think I’ve worked it out: he is not one of us. The silly kid is really an alien, like a savior sent to reclaim us. I’d prefer him in full-length sackcloth robes, sandals or barefoot, sermonizing on the mount and in the malls, doing tactful miracles on talk shows. He grows a beard, his hair goes white, he mouths the blather of salvation — you know that routine. You thought this ministry had gone out of fashion, but Elon can bring it back, as our revered hermit surrounded by children, with that daft smile pinned on his face. Yet if you look behind the empty eyes, you may wonder if he isn’t anticipating some assassin, one of his own, who holds a knife as bright as the sleekest Tesla Cybercab.

I warned you, I could end up sounding crazy. But these days, what excuse is left for trusting sanity?

People had always imagined that robots would look like us, but these forklifts hint at a different future — one in which robots are made in the image of the work, not the worker.

For the question of whether robots will be the same shape as humans is not a settled one. In fact, it is a point of some debate in the robotics sector. Elon Musk promises legions of humanoid Tesla robots, poised to take over manual labor and build a colony on Mars. And his is not a particularly wacky view; other executives, including those less given to overconfident predictions, have made similar forecasts. In his lecture delivered to the Cosmos Institute last month in Oxford, the Anthropic co-founder Jack Clark predicted that, by April 2028, bipedal robots will “begin to do useful work in the real world in partnership with human tradespeople”. While being bipedal does not mean a robot is identical to a human, it certainly denotes it being closer in form to us than to a forklift.

As recently as this time last year, a wide rollout of electronic colleagues looked unlikely. Even in China, the world leader of the humanoid robotics market, the stumbling and malfunctioning first cohort of robot competitors in the Beijing half-marathon were treated as more of an entertaining sideshow than a serious sign of things to come. Clark himself appeared relatively pessimistic about the capabilities of humanoid robots at the time; in response to an Amazon research paper about the performance of a specialized robotics system for stowing items in the company’s warehouses, he noted that state-of-the art automation was coming from designing highly specific hardware and “carefully structuring your system around a few core tasks”. The experiment, he wrote, “should temper our expectations for bipedal robots leading to some massive improvement in automation — at least in the short term.”

What changed? It may simply be that this massive improvement has arrived. At this year’s Beijing half-marathon, several robots outpaced human participants, even breaking records. This feat had serious implications, demonstrating the kind of durability that might soon make the technology suitable for industrial applications.

On that basis, Clark’s prediction — that more human-like machines will start trickling into the workforce next year — starts to sound plausible, though we can expect humans would still be on-site to correct for their defects. Manual labor will be slowly automated. Or it may be that Clark believes the underlying AI systems are becoming so powerful, so fast, that the obstacles will be swept away. The robots’ cognitive abilities will catch up with their strength and dexterity. Manual labor will be rapidly automated.

“Truly general intelligence would obviate some of the flaws,” Clark wrote in his sceptical 2025 missive. “So if bipeds arrive at the same time as a generally capable intelligence, I’ll need to eat my words.”

This is now the precipice at which we find ourselves. As AI improves, those in the field say robots will become more capable of learning for themselves, of adapting to new environments without pre-programming, and even employing reasoning. They’ll be easily able to work in an Amazon warehouse — and then some. The ultimate prize, as Clark says, would be truly general intelligence: a system that can turn its hand to any task without specific training. Many imagine that, in this scenario, the machine most suited to carrying around a general, human-like intelligence would be in the shape of a person. After all, the world is built for humans, and humans have the dexterity to adapt to a vast range of manual tasks.

Many industrial robots, by contrast, are made to complete one specific task from a set point. Or else they operate entirely inside facilities built for them: look, for example, at the fulfillment centers of British grocery delivery giant Ocado, where a “hive” of robots roll across a grid system, picking and packing orders.

The question is whether the economy will demand robots that can venture into unexpected environments. For this, humans are far more adaptable, taking on stairs and uneven terrain. We climb ladders and traverse scaffolding and even rooftops. It’s hard to imagine a machine able to do all that if it isn’t shaped like us.

Clark is probably correct that the bipedal assistants will arrive sooner rather than later, precisely because they might be a stopgap between human work and a totally different way of making things. The trades of the future could look more like the work of British startup Automated Architecture, which makes mobile, robotic micro-factories that can build pre-fabricated components of a house quickly and closer to its final site. Inside the micro-factory, one large robotic arm performs tasks that might typically require several different production lines, producing floors, walls and roofs. Human workforces are still needed to assemble the timber-frame panels, but the process minimizes how much construction is needed on-site by pre-making all the elements for the shell of a building. Think of it like buying a gingerbread house kit instead of baking all the pieces from scratch.

In this way, the robotics of industry can go beyond the human approach to a task. Why climb a ladder when you could send a drone? These are already used for surveys and roof inspections. With the right dexterity, perhaps they will be able to perform the fixes as well.

Humanoids, argues Josef Chen, the founder of London-based restaurant industry robotics firm Kaikaku AI, are like the equivalent of a pick-up truck on a construction site. “Even though it’s not used for any serious work, people just have it for optionality.” In this analogy, you turn to a digger for digging, a crane for lifting. You wouldn’t expect the truck to do those specialist tasks, even though it can be useful for transportation, towing, or navigating tricky ground.

Those who believe in the utility of the human-shaped robot, though, believe that getting it right could unlock huge gains — and huge threats to the human workforce. As Clark wrote back in 2023, “true economic growth from AI happens when you don’t need to design for robots”. If an army of person-shaped droids start arriving in human workplaces, with no adjustments needed for them, it is easy to envision how this would accelerate workforce displacement.

Matvey Boguslavskiy, a hardware researcher and director of the Society for Technological Advancement, doesn’t buy that. “I think the future economy is going to have robots with many different form factors, doing many different things,” he says. Indeed, if robot arms or vehicles or dog-like quadrupeds prove vastly more efficient than humans, the argument about whether the world has to be redesigned for robots falls flat: the economic incentive will be enough to justify a redesign.

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So if applications in the workplace favor the specialized machinery end of the robotics scale, then perhaps the promise of the humanoid robot is in the home. Whereas a factory might have space for several machines, each built for a different purpose, homes are more cramped. It would be difficult and expensive to accommodate an ironing robot, a cooking robot, a gardener robot, and so on — but what if they were all rolled into one? .

But here the robots will encounter another obstacle: human disquiet. There is something freakish about Tesla’s Optimus, or Boston Dynamics’ Atlas. The way they are lined up like an army in some promotional videos doesn’t help. It’s also in how close they are to being human-shaped, yet how far, almost like there’s a real person under there wearing a creepy costume. It’s the almost-ness that gets you. The heads are almost the right size, the hands almost lifelike — if often clothed in serial killer black gloves.

It may be that we’re too conditioned by science fiction horrors to accept humanoid robots. But the reason those fictional visions terrify us in the first place is because they tap into a primal fear — of a monster, or döppelganger.

To make robotics more palatable in the home, many companies are making devices less threatening by ramping up their apparent cuteness. Pixar has a lot to answer for here. Everyone I speak to on this subject cites Wall-E and the success the animation studio had in making a boxy, metal robot into a lovable character. One startup robotics lab even brought in Toy Story screenwriter Alec Sokolow as creative director when developing Ongo, a smart desk lamp with big, Disney-worthy eyes.

There seems to be strong consumer demand for such devices, at least among gadget obsessives. There are countless Kickstarters for small robotic companions and widgets that receive hundreds of thousands of dollars in advance orders. However, an interactive paperweight can only do so much. To load the dishwasher, you need grip, spatial reasoning, and a way to get high enough to open or close it. If we really want a smoother life with no chores, there would seem to be few options beyond either hiring another human to help or letting humanoids into the home.

What’s the way forward? Boguslavskiy thinks one of the most useful forms will be the small, wheeled vehicle. We have already seen these catch on for vacuuming and mowing lawns autonomously. Why not for other tasks too?

Or if the human shape proves useful, the most acceptable forms might be some compromise between the humanoid and the cute. Take a look at Fauna Robotics, a New York-based company which was acquired by Amazon in March. Their products are deliberately fun to look at, with bright colors and jaunty eyebrows. Crucially, they avoid uncanny valley reactions by not trying to make the robot — named Sprout — look too human. It has Lego-like hands and a head that resembles a Wi-Fi modem. It looks like what it is: a machine. Sprout is also small, at 107cm tall, so won’t tower menacingly over a child.

Or there’s Memo, from California-based Sunday Robotics. Sometimes described as humanoid, the robot nevertheless does away with cumbersome feet, instead rolling around on wheels. With its permanent baseball cap, it looks more like a character in a children’s film than a chilling centurion of the future.

These non-threatening interfaces serve a deeper purpose than just saving children a fright. They strive to make it possible for us to live alongside intelligent machines. Though AI continues to seep into life and work, there are still many people who avoid using the technology or even encountering it as much as possible. When AI enters the physical world, it becomes less easy to ignore, and triggers in some people a sense of revulsion and anger. We have seen this in the repeated attacks on delivery robots and driverless cars.

People in the tech industry who delight in the miracle of creating motion, who have fun hacking together hardware projects on the side, perhaps underestimate how far there is to go on public acceptance of robots. Creepy, faceless, six-foot Cybermen are probably not going to help.

But amid the noise there is signal. Finding that signal, and discerning what the future is likely to hold, is the mission of the Swift Center for Applied Forecasting, where we apply scientific methodologies to scenario analysis and forecasting to predict the future. In 2025, we successfully predicted that major threats dominating the headlines would fail to materialize. We correctly forecasted a significant war between India and Pakistan would not occur; that H5N1 would not become a devastating pandemic; and that the global oil market would be resilient to price shocks despite the conflict between Israel and Iran. Conversely, we identified quieter, yet critical geopolitical shifts, such as the rising risk of US engagement in Venezuela, weeks before the mainstream press acknowledged this reality.

What does 2026 hold? The starting point is to know where to look. With that principle in mind, we have identified specific scenarios for 2026 — five relating to technology and five relating to geopolitics — that we believe are underrated and worth watching. In each case, resolution one way or another will dictate geopolitics for years to come or constitute a significant step toward a landmark in human history.

Technology

1. Will any, or all of, OpenAI, Anthropic or SpaceX IPO?

The potential initial public offering (IPO) of OpenAI, Anthropic, or SpaceX in 2026 would mark a new era for frontier technology. These firms will no longer be AI and rocketry startups, but full-fledged geopolitical assets. Crucially, an IPO forces transparency. For years, the capabilities and financials of these labs have been shrouded in NDAs and corporate secrecy. But a public listing would require the disclosure of risk factors and expenses such as compute costs. It would also require published revenues rather than opaque comments during podcast interviews. It would effectively serve as a public audit of the AI market, revealing whether the path to AGI is truly the profit utopia many believe.

An IPO for any of these entities would very likely to be the largest technology listing since Alibaba or Saudi Aramco. It would absorb significant liquidity from capital markets and would stand a good chance of setting valuation benchmarks for the entire AI and aerospace sectors for the coming years.

Each of the three companies is driven by an insatiable need for liquidity to fund the next generation of capital-intensive projects. It may be possible for all three of them to IPO in 2026. Our forecasters note that the prospect of artificial general intelligence (that is, AI with across-the-board human-level capabilities) and multi-planetary life has captured much of the market’s interest. 2026 may represent the optimal window to convert that hyperbole into public capital before the excitement fades or regulation arrives. However, the capital required for all three to IPO will be substantial — enough to leave a question mark over whether all three will IPO.

2. Will an AI system exceed 85% on the key intelligence benchmark?

How do you measure the capability of an AI model? By using “benchmarks”: suites of tests that assess the model’s ability to solve a range of problems. The ARC-AGI-2 benchmark is widely regarded as the only test that effectively measures “fluid intelligence”: that is, the ability to learn and generalize from novel information. While large language models (LLMs) can pass the Bar Exam by reciting law, ARC-AGI requires them to solve abstract visual puzzles they have never seen before. The average human scores between 60-65% on the test. A score of 85% is generally seen as the threshold for AGI-level performance on this specific benchmark.

Earlier in 2025, no AI model scored more than 24% on ARC-AGI-2. But Poetiq AI, a system that acts as a “reasoning layer”, or wrapper, on top of existing frontier models like Gemini, recently scored 54%. The fact that a small team of six researchers could leverage existing models to originally break the 50% barrier suggests that the underlying intelligence of current models is yet to be fully exploited.

The view persists that LLMs are merely “clever parrots”, but if a model were to score 85% it would be an important development. In short, it would constitute powerful evidence that we are getting closer to creating a general reasoning model. This would likely trigger an acceleration in investment and add fuel to the concerns of those calling to regulate frontier AI models.

Some of our forecasters are bullish. They argue that if a wrapper can double performance in a few months, the integration of these reasoning techniques directly into the training of GPT-5 or Claude 4, the leading models produced by OpenAI and Anthropic, could easily bridge the gap to 85% in 2026. More skeptical forecasters argue that the curve will flatten; the jump to 54% picked the “low-hanging fruit” of reasoning, but the final 30% represents a fundamentally harder class of difficulty.

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3. Will a private fusion energy company achieve net energy gain?

Energy is the hard constraint on the AI revolution. Data centers, between them, are as hungry for energy as are small nations. As such, the search for a dense, clean, and scalable power source has intensified. Achieving “net energy gain” — that is, producing more energy from an experiment than is put into it — in a private facility would be an important milestone, for it would signal that fusion is transitioning from an experiment to an engineering and commercial problem. It would unlock substantial investment and could fundamentally alter the long-term projections for climate change, industrial capacity, and geopolitical energy dominance.

The probability for this event in 2026 remains low. The historical precedent is that technical progress consistently lags behind promised schedules. This precedent, understandably, weighs heavily on forecasts. But new developments contradict that pessimism. While only the government-run National Ignition Facility (NIF) has publicly achieved net energy gain, investors are piling capital onto attempts to repeat the feat in private facilities. Companies such as TAE Technologies, Commonwealth Fusion Systems, and Helion are deploying high-temperature superconducting magnets and advanced computational modeling that were unavailable a decade ago. For a private sector facility to achieve this would demonstrate fusion is becoming a commercially viable alternative to natural gas and fission — unlocking a scalable energy source that is capable of meeting the demands of the AI revolution.

A critical development to watch is the intersection of politics, media, and energy. Trump Media and Technology Group (TMTG) has announced a merger with TAE Technologies in a deal valued at over $6 billion. The combined entity aims to site its first utility-scale power plant next year. Devin Nunes, CEO of TMTG, has explicitly linked this move to “ensuring America’s AI supremacy” by providing the massive power required for future data centers.

While constructing a plant and achieving net gain are vastly different milestones, the aggressive timelines of private firms suggest that 2026 could see a breakthrough for private fusion. If a private company achieves what NIF did, but in a way that is commercially viable, the energy markets will price in a future of abundant power long before the first electron hits the grid.

4. Will Tesla deliver its first Optimus robot to paying customers?

While LLMs displace cognitive labor, humanoid robots target physical labor. Optimus is Tesla’s humanoid robot prototype. There are several hurdles to widespread commercial release of humanoid robots — with those problems including battery density and real-world motion and navigation — but if Optimus reaches the market, it would be a sign that humanoid robots have become commercially viable.

The implications for the labor market would be huge. Humanoid robots do not need breaks and are increasingly physically capable. If their dexterity and reliability improve, and the cost of running them comes down, then they will start to become serious competitors to human workers. Once a robot costs around $15/hour to operate, human wages for the equivalent tasks will be difficult for businesses to justify.

Elon Musk views Optimus as potentially more valuable than its car business, and competitors are on the march: companies like Agility Robotics and Figure AI are already running pilots in factories. Naturally, Swift Centre forecasters remain skeptical that mass adoption of humanoid robots will occur in 2026, viewing pilot programs within Tesla’s own factories as more likely than general retail availability. However, this is a crucial invention to watch in the months ahead.

5. The AI race: Will a Chinese company beat the US models?

The narrative of US leadership in AI is built on the assumption that export controls and superior talent will keep Western models ahead. However, if a Chinese company were to release an open-source model that beats Western closed models on a “time horizon” benchmark — which measures the ability of an AI to autonomously complete long, complex tasks — then the assumption of US leadership would be immediately weakened.

Already, the gap between US and Chinese models is closing faster than analysts anticipated. The next battleground isn’t just about chatbots that can write poetry. Instead, it is about “agency”: AI that can plan and execute complex tasks on its own. If a Chinese lab such as DeepSeek releases a model that tops the charts in autonomy, and gives that model away free of charge, that lab would be flooding the market with free, high-level intelligence. This would undercut the business models of the US tech giants and mean there was a real threat to the US’s leadership on frontier AI.

In short, it would prove that the US’s attempt to gatekeep the future is floundering, leaving Washington with next to no leverage and Silicon Valley with no monopoly. Swift Center forecasters are therefore closely watching AIs’ performance against the time horizon benchmark set by the AI evaluation organization METR.

Geopolitics

While technology seeks to drive the world into a new era, geopolitics in 2026 is defined by fragmentation and the conflicts of old. The post-Cold War order is fraying, and in its place is emerging a new round of protectionism, regional blocs, and raw power politics.

1. Will the Supreme Court strike down Trump’s emergency tariffs?

Since taking office, President Trump has leveraged emergency executive powers to impose broad trade tariffs, including a blanket 10% tariff on all global imports. The constitutional legality of these powers is now being tested in the US Supreme Court.

A Supreme Court ruling against Trump’s emergency tariffs would be a defining constitutional moment for the US in 2026. A strike-down could hamstring the administration’s economic agenda. It could also create chaos in global markets, for importers, having paid billions in import duties, will seek billions in refunds. Such a ruling would force the administration to seek alternative, and probably more aggressive, legal avenues to enforce their desire for protectionism.

Our forecasters note that this is a high-stakes legal battle with the potential for significant economic fallout. The administration argues that tariffs are a national security tool, citing precedents from the Nixon era. However, the Supreme Court has shown some resistance to executive overreach.

In response, the administration might use the Smoot-Hawley Act or the International Emergency Economic Powers Act (IEEPA) to provide legal justification for tariffs, signaling that the trade war will continue regardless of the ruling. A defeat would have the additional significance of being framed by the administration as an abuse of power by the courts, hampering the economic will of the people. But a win for Trump would show just how powerful he has become.

2. Will Russia and Ukraine agree to an indefinite ceasefire or peace agreement?

A ceasefire in 2026 would redefine the security architecture of Europe. It would almost certainly leave Russia in control of significant Ukrainian territory, validating the use of force to redraw borders. It would also force difficult conversations about the lifting of sanctions, the reconstruction of Ukraine, and the future of Nato. Conversely, a failure to reach an agreement risks an embarrassment for the Trump administration while prolonging the human, economic, and financial costs of the war. It also prolongs the risk of the war escalating into a direct conflict between Nato and Russia.

A peace in 2026 is unlikely to be a true resolution. More likely is an “indefinite ceasefire” akin to the Korean Peninsula’s frozen conflict. This allows both sides to claim partial victory — or simply survival. The key variable to watch is the terms of security guarantees for Ukraine and how seriously they are enforced.

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3. Will Benjamin Netanyahu still be Prime Minister of Israel?

After two years of war in Gaza, and a shorter war between Iran and Israel, the Middle East is in a fractious state — with consequences for us all. Central to what happens next will be the political survival of Benjamin Netanyahu, the prime minister who took Israel to war. His coalition relies on the Israeli far-Right, making a two-state solution or normalization with Saudi Arabia difficult if not near-impossible. If Netanyahu loses, the probable winner will be Naftali Bennett. Bennett’s path to victory will require a coalition with centrists and possibly Arab parties. The departure of Netanyahu could therefore create an opportunity for a diplomatic reset between Israel and its neighbors.

This year, Netanyahu faces both an election and the resolution of his corruption trial. While the polls currently show him losing to a centrist coalition, the Israeli opposition is fractured, and Netanyahu is a master campaigner. If Netanyahu survives 2026, he will probably move to finalize his overhaul of the judiciary. Specifically, he could seize control of the Judicial Selection Committee and pass the “Override Clause”, which would allow his government, if it has a majority in the Knesset, to ignore Supreme Court rulings. This would effectively end the independence of Israel’s judiciary, removing the last barrier to permanent annexation policies and shielding Netanyahu from his own corruption trial.

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4. Will Reform UK win the most seats in the 2026 Welsh Senedd and England local council elections?

While the world watches Washington, a quiet political earthquake is building in Wales. The 2026 Senedd elections will use a new voting system that swaps “First Past the Post” for “Closed List Proportional Representation”. Insurgent parties such as Reform UK are expected to benefit from this new system, for as they can convert vote share into seats more efficiently than under First Past the Post.

After 27 years of the Labour Party’s governance in Wales, there is a feeling of voter fatigue. Issues such as NHS waiting times and controversial 20mph speed limits have been highly unpopular with working-class voters, who are flocking to Reform UK. Reform, riding high on its local election victories and strong public polling, could take control of the Senedd in 2026, with Plaid Cymru being the other major horse in the race. If Reform, the Right-wing party led by the Brexiteer and MP Nigel Farage, wins the most seats, it would be a historic shock to the UK’s political system.

A victory for Reform in Wales would be more than just a headache for Keir Starmer, Rachel Reeves and Labour; it would be a resounding signal that the traditional Westminster parties are losing their grip on power. Just as voters in the US, France, and Germany have punished incumbents for perceived failures on immigration and economics, Welsh voters appear ready to reject the norm. If Labour loses the Senedd — a socialist citadel the party has held for nearly three decades — it would signal that there are no safe havens from the rising challenger parties. It would demonstrate that the disconnect between the governing class and the governed has reached a breaking point from which traditional parties may not recover.

5. Will the Iranian regime fall?

There is growing unrest in Iran over the soaring cost of living. Across social media there are numerous videos of cars being set on fire during running battles between protesters and security forces, with several deaths already being reported. Many protesters have called for ending the rule of the country’s Supreme Leader, while others have called for a return to the monarchy.

While street protests are not new to the Islamic Republic, the recent events signal a shift in the political risk. The coordinated strikes by the “Bazaar” (the conservative merchant class) represent a historic break between the regime and its traditional economic backbone. Student unrest is common; merchant class unrest less so. This signals a substantial shift in the risk of the unrest turning into a crisis that the Iranian government can’t control.

Already, the Islamic Republic faces difficulty in de-escalating the protests. This is because the driving force is not just inflation, but fiscal rigidity. The regime faces significant spending pressure following the return of UN sanctions and the costs of the 12-Day War with Israel in June. Reports suggest that projected oil revenues now cover only a fraction of administrative costs: perhaps as low as 5%. This forces a stark trade-off. Does the government concentrate funding on security, or on the maintenance subsidies that previously helped manage social unrest? Our forecasters have noted the government’s decision to close public offices in 26 provinces. Officially, the reason for this was “energy conservation”, but given the context of mild weather and the country possessing the world’s second-largest natural gas reserves, it instead suggests the state is running on empty.

On the Islamic Republic’s side is that it remains the strongest regional ally to China and Russia. Iran sends ~90% of its oil exports to China, and China is Iran’s largest trade partner. Iran is also the only country in the region actively and publicly supplying Russia with military equipment for the war in Ukraine. However, with Chinese demand for oil lessening, Beijing’s willingness to bail out Tehran may be waning.

Should the regime fall, the geopolitical realignment would be profound. It would represent a strategic victory for the United States and Israel, while dismantling a central pillar of Chinese and Russian influence in the Middle East. The fallout would be felt directly in Europe, where the loss of Tehran’s drone and missile supplies would damage Russia’s war effort in Ukraine. Regionally, Hezbollah and the Houthis would lose vital support, dramatically reducing their capability to continue destabilizing the region.

Collectively, as we look forward to what 2026 may bring, we see rapid technological advancements matched by growing geopolitical tensions. Yet the dawn of genuine stability across the Middle East may be breaking on the streets of Tehran.

Consider the odds. If you use a gun with six chambers, the chances of surviving a single round are a little over 83%. By the time you have reached round four, your survival chances will be roughly 50-50. From then on, things deteriorate swiftly, and by round 25, should you have survived that long, your chances are around 1%. Now assume that everyone in the US is playing this game. By the time the trigger is pulled for the 70th time, there are only approximately 1,000 survivors playing. That also happens to be the number of billionaires in the US. Elon Musk and Donald Trump are among them. Both think they are really good at the game and they’re still playing. But how long can their luck hold out?

Musk’s chances of survival aren’t looking too healthy. He spun the barrel of the gun one time too many when he decided to start a public spat by criticizing Trump’s big, beautiful budget bill. It was an impulsive move that might work in business, where visionaries are rewarded for disruption. But in politics, the chamber is loaded more often than not.

Perhaps you object to my Russian roulette comparison. It’s too random. Success, in business and politics, you think, isn’t the result of luck. These guys have skills. Musk is intelligent; Trump is street-smart. Success in the real world is often a mixture of skill and luck.

This is all true. But my thought experiment makes an important point about big gambles that is often lost in journalistic narratives. Skill is important in everything we do, but few of us, including the most intelligent and best educated, are possessed of skills that no one else has. We mistake survival for superiority. Yet what makes the difference between success and failure comes down to the opportunities we grasp and the risks we take. Success is often the result of choices we made a long time ago, and which set us up for life.

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Lawfare won’t beat Trump

By Wolfgang Munchau

This is certainly the case for Musk. He is the world’s richest man because he gambled on the success of two businesses: investing early on in Tesla and founding SpaceX. These two shots paid off. But the odds of that happening are incredibly small. In our game metaphor, this is like hitting the lottery jackpot twice, or getting to round 100 in two Russian roulette games. The odds of that happening are vanishingly small. But once you’ve made it that far, it’s tempting to believe it wasn’t luck at all — that you were just better than everyone else.

Musk, for his part, has not been so successful in politics. And that is in large part because of a cognitive error that successful people are especially prone to — the fallacy of composition. This is the mistake of thinking that something that is true for me and my world is true for everybody. Musk made the mistake of thinking that what worked at Tesla and SpaceX would work in politics. He assumed that his outstanding success in this world, and his disregard for convention, would be transferable to politics. But what made him excel at business has made him clumsy, even self-destructive in politics.

He’s not unusual to think like this. I know several successful investment bankers and business consultants who were plucked from obscurity to become the finance ministers of their countries. They were, the story goes, good at numbers. But they had only ever known Goldman Sachs or McKinsey, and the world of politics functions according to very different rules from the boardroom. Almost all of them failed because their skills didn’t translate to politics. They were not stupid, but they were ignorant.

Musk’s DOGE experience is the perfect example of this. If you want to save money in a large company, it’s pretty straightforward: you start with cutting waste. But fixing a bureaucracy is different. You do not start with what you see, but with the laws and regulations that are the root cause of the waste. These aren’t immediately obvious. It takes time and requires patience and attention and a deep knowledge of how these things glue up the system. These are things that Musk doesn’t have in abundance.

Politics and business don’t only look at waste differently, they see risk differently too. Bankruptcy is the extinction event you risk in finance, but it happens rarely. In politics, however, extinction events occur all the time: just look at Liz Truss. I do think she was unlucky: she made a grave error at the wrong time. But it is much harder to hedge risk in politics than in business or finance. Political risk is harder to hedge, harder to model, and almost impossible to bounce back from. Musk is learning this the hard way. He took a gamble by investing heavily in Trump’s win, and then burning bridges with the administration: he is left with two companies whose fortunes are heavily intertwined with regulation that Trump ultimately controls. Trump has the gun to Musk’s head.

Originally, Trump was the same as Musk. He was a businessman who had never really dabbled in politics. He thought money talked. As a result, he has been prone to fallacy-of-composition type errors: he, too, thought he could run the administration like a business. But he learned — believe it or not — that he had to be more cautious. He knows it’s not all about luck. He knows that he is the elected CEO of a democracy, not the dictator for life in the boardroom. Yet Musk is still thinking like a business dictator whose companies will do exactly what he wants. And unlike Trump, he will not get a second term.

There is also a more subtle difference at play that one billionaire now understands and the other does not. In business, money rules. But in politics, money only matters. Just because you’re rich doesn’t mean you can remake politics according to whim; you can’t buy votes. You may be, like Musk, one of the true creatives in our economic life: you can succeed in business even if 51% of the population absolutely hates you. But to succeed in politics, you need to build coalitions of voters, or parties, that constitute a majority.

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After Musk, the deluge

By Malcom Kyeyune

Musk had the good chance — and terrible fortune — to be the owner of a large social media platform at just the right time: it gave him the power to enter politics when the odds were heavily stacked against him. But it was also part of his downfall. In politics, you have to be prepared for people to disagree with when you try to get anything material done. Opposition leaders will challenge you and tell different stories. A debate in parliament couldn’t be more different from a trip down the X hole, where you can spend an entire day having discussions with people who reinforce your views. Musk, rarely away from his smartphone, believed what it told him.

This echo chamber effect is particularly pernicious in our current moment. It has left leaders in the dark as to what voters really think. Spend too much time talking to your own people, and reality disappears from view. We saw it only the other week during the Polish presidential elections. The supporters of the losing candidate, Rafal Trzaskowski, the liberal mayor of Warsaw, were absolutely convinced that their man was going to win — even though the polls were too close to call. We saw it, too, during the Trump-Harris race last year. The liberals keep on talking to themselves and massively misjudging the strength of their opponents, along the way disregarding the will of the people. The same also happened in the run-up to the Brexit referendum in 2016.

Today, X and Truth Social, Musk’s and Trump’s media platforms, are the Right-wing counterparts to the Left-leaning metropolitan newspapers. And when the inhabitants of each are surprised by a result they didn’t expect, they don’t accept the result — they look for someone to blame. So the Russians get fingered. Today, the delusions on each side are being amplified. And such is the disconnect that, from the talk in his little echo chamber, Musk is now convinced he can use his money to create a new political party at the center of US politics. He should probably look at what is happening to Emmanuel Macron and his party, perhaps the most daring political experiment of radical centrism we have seen in an advanced Western country. There’s plenty of money, and there’s no support. It has failed to appeal to voters. Trump knows this. He is the antithesis of all centrist politics. He knows how to disrupt, but he also has a keener understanding of how politics works now: unlike Musk, who got lucky, but thought that luck was enough.

Here is my prediction about Musk. He will continue to make reckless bets unshaken in the belief that he can’t fail. In my Russian roulette example, we can expect only one person to be alive by round 107. That person will be Trump.

Inevitably, the squabble played out on social media, where both parties proceeded to denounce each other in increasingly rabid terms. Musk accused Trump of being a hypocrite, a man who pretended to care about the US budget deficit while conspiring to make it worse. He said that Trump ought to be impeached and replaced by his vice president, JD Vance. Trump, meanwhile, hit back saying that the real problem with federal deficits was all the unearned subsidies and corporate welfare that Musk was leeching from Uncle Sam. And Steve Bannon piled on calling for Musk to be deported back to South Africa and have his citizenship revoked. By now, the love-in on the White House lawn, with Trump advertising Tesla and Elon expressing devotion, is but a distant memory. Bridges have been burned; there will be no reconciliation.

Though the level of vitriol and undignified childishness of the bickering between the President and the world’s richest man has been shocking, nobody can say that they didn’t see it coming. For weeks, the media has been reporting on the growing discord between Musk and the administration, primarily over the trade war. And other parts of Trump’s coalition — including billionaire and megadonor Bill Ackman — have made their dissatisfaction with the economic policies increasingly clear.

But the “big, beautiful bill” was the final straw. After spending a hundred days talking about fiscal responsibility, the danger of the exploding deficit, and suffocating levels of debt, Trump and his Republican Party made one of history’s greatest political U-turns and endorsed a bill that made all of these problems spectacularly worse. Adding insult to injury where Musk is concerned, the budget bill terminates nearly all ongoing subsidies for EVs, while leaving the corporate welfare handouts for internal combustion engines in place. Clearly, no good deed in Washington ever goes unpunished: after sacrificing his own reputation on the Trump altar, Musk has been rewarded with a knife slipped between his precious Tesla’s ribs. Some Democrats, sensing opportunity, are already calling for Musk to return to the fold.

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DOGE has devoured Musk

By Malcom Kyeyune

But the dramatic collapse of a part of Trump’s political coalition isn’t just the result of two narcissists’ clashing egos. It signifies a deeper shift. Washington, after all, is intensely transactional; if you donate large sums of money to a party, you naturally expect to get something in return. Given how incredibly spendthrift Elon Musk has been, it is extremely noteworthy that he would end up being denied access to the pork barrel. This is not, however, a sign that Congress has decided to reject corruption — the existence of the big, beautiful bill is proof enough that the swamp has only gotten worse. No, the messy divorce is a sign that the political process — even the process of ordinary political corruption — is starting to break down.

Congressional Republicans, meanwhile, are getting queasy because the bill essentially represents a capitulation in the face of looming fiscal disaster; a resolution to simply sail the Titanic straight into the iceberg. The Trump administration sold itself as the last chance to try to steer the ship to safety before America’s state finances collapsed. But instead of changing course, Trump and the GOP actually decided to throw more coal into the boiler and go full speed ahead.

This time around, their fiscal profligacy has not been without consequences. The bond market is already wobbling, as weakening demand for more dollar debt slams head first into a state that is poised to gorge on even more unsustainable borrowing. Combined with a capricious and almost arbitrary economic war against the rest of the world, weakening America’s internal economy while alienating allies and making them less willing to bail America out from its fiscal irresponsibility, and you see the makings of a perfect storm.

The parallels between this crisis and the one that triggered the French Revolution of 1789 grow ever stronger. Elon Musk has played out his role as America’s Jacques Necker to its conclusion; he has gone from rockstar technocrat enjoying widespread popular support to spurned sidekick whose attempts at reform were frustrated and blocked by the very people who brought him in in the first place. The French monarchy did actually try quite hard to escape its looming bankruptcy during its last years in power; but, just like with DOGE, those reforms became more and more chaotic and even tyrannical or illegal towards the end, as the political system slowly collapsed into acrimony and infighting.

Meanwhile, in America, as the “big, beautiful bill” kills off even the pretense that Trump is working to forestall financial disaster, and with Congress so gridlocked and the political system so polarized and dysfunctional, there’s only really one politics left that still works: the politics of executive fiat. With Trump taking the same path as Louis XVI, will he suffer the same fate?

Certainly, his administration is going to go down fighting; as it loses many of the battles it began this term by initiating (the trade war, peace in Ukraine and the Middle East), it is simply picking more. Trump kicked off this term declaring war on illegal immigrants and the federal bureaucracy, and even though neither has gone well, he’s also declared war on Harvard University. Perhaps, though, this impulse to constantly pick new fights is perhaps less irrational than it appears. America is going broke, Congress no longer works, laws can barely be passed, and the bureaucracy itself is slowly failing. The only way to cut spending in that environment is by resorting to semi-tyrannical executive action.

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The decline and fall of MAGA

By Ross Barkan

While the official rationale behind the war on institutions like Harvard, or research funding more generally, often cites issues such as antisemitism, or wokeness, or DEI, it’s increasingly clear that the money withheld will never be restored. While this stand-off between Trump and the institutions could be described as a culture war spun out of control, or a distraction from other failures, it is also, in truth, a sort of improvised bankruptcy proceeding. When the Soviet Union slowly went to pieces, the same thing happened: at first, the money simply stopped coming, and only later did people belatedly realize that this was the new normal, and the money would not be coming back. In truth, there is no other way to even attempt to cut spending in America right now; Congress is simply incapable of doing the job.

Perhaps, five months ago, it was possible and indeed reasonable to talk about Trump’s administration in terms of “will they fix it or won’t they?” There was momentum and DOGE held a threatening promise. But today, the man who embodied that reform is now openly denouncing his former political allies and the system has proved resistant.

The President, meanwhile, is openly threatening some of America’s most dynamic companies, because of personal animus. Tesla and SpaceX, whatever their flaws, still represent an area of genuine industrial innovation in America, at a time when deindustrialization has devastated it. Destroying Tesla out of pique or petty revenge won’t do America any good, but one gets the sense that “doing good for America” is not really on anyone’s agenda any more.

On the one hand, it’s a marvel to behold the indefatigable Vermont socialist getting the band back together for his barnstorming “Stop Oligarchy” tour — one that first drew sizable crowds in the Midwest and is now drawing tens of thousands on the second leg across the Mountain West, co-headlined with Rep. Alexandria Ocasio-Cortez (D-NY). Sanders has been decrying the evils of oligarchy for decades, and now, with Elon Musk all but co-presidenting with Trump, he looks like a prophet.

On the other hand, there is very little that Sanders (even with AOC by his side) can accomplish. The Democrats are the minority party and act afraid of their own shadow, while Sanders is a not-so-spry 83 years old and stooping more by the year. The experience of seeing Sanders rail against capitalism and the One Percent doesn’t quite hit like it did a decade ago, It’s akin to catching a Rolling Stones show in 2025 — it’s great to hear the timeless hits and all — but the thrills are fleeting. You ask yourself: Are you still Feeling the Bern, or is that just actual heartburn?

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Why Trump loves corrupt Democrats

By Ryan Zickgraf

That’s a legitimate question, because it isn’t just Bernie who is getting long in the tooth — so are his supporters and those currently raging against the Trump machine. A decade ago, I described the Sanders run as a “punk-rock presidential campaign,” a middle finger to the political establishment that was far and away most popular with bright-eyed but downwardly mobile college students and 20-somethings. That dynamic played out in the 2016 Democratic primary, in which Sanders thumped Hillary Clinton among under-30 voters, including 83% of young people in New Hampshire.

Not anymore. Today, those packing into high-school auditoriums to cheer Bernie or busy marching in the streets aren’t quite replicating Lollapalooza; it’s more like a particularly raucous school-board meeting. The same Millennials who helped make Left populism cool in the 2010s and marched for a racial reckoning five years ago are now slouching towards middle age. Meanwhile, white-haired dissidents at Tesla protests in 2025 outnumber those too young to rent a car. It’s a changing of the guard — but, ironically, back to the old guard.

The youth have been missing for so long, it’s a wonder that progressives don’t print their faces on milk cartons. College campuses have been quiet, noted Inside Higher Ed, even among institutions where activism is practically an intramural sport. “I haven’t seen a whole lot, which is kind of uncharacteristic of our campus”, observed a student at American University in Washington, DC.

In online forums, political organizers are also making noise about the missing youth. “The last two Tesla protests I went to — the majority were elderly, and I appreciate their support, but why no young people?”, reads a viral post in the subreddit for the 50501 movement, the online group coordinating the anti-Trump capital city protests and others. “If at age 30, I’m the youngest showing up, there’s a problem”. Another post suggested that there were more elderly Trump voters opposing the president’s overreach than young liberals.

It’s no coincidence, then, that the most significant impact made by the Resistance thus far has been a consumer boycott by older Democrats refusing to buy Teslas — it’s not as if many 20-year-old baristas and other members of the precariat are the ones withholding their Cybertruck purchases. Otherwise, with young people gone, the Big Dad Energy at 2025 rallies isn’t enough to make a major impact. The size of the Sanders rallies are impressive, but other protests have largely been a fraction of the size they were during Trump’s first term.

Where did the kids go? The best answer is that most of them didn’t vote at all. The peak of the hyperpolitics era is behind us, and election turnout in November trended downward for young adults. They’re growing more disillusioned with all institutions — the courts, the media, and politicians — no matter which party they’re affiliated with. A new analysis of Gallup data found that less than a third of under-30s trust the government, a new low. In my reporting, I have spoken to many young people who view all politics as toxic, a form of entertainment that didn’t change the world, but ruined a lot of personal relationships. Why doom-march in public when you can doomscroll from the comfort of your home or, better yet, soothe your crippling anxiety with ASMR videos. 

When the youth did vote, they leaned Republican. According to data whiz kid David Shor, Trump won a majority of those under the age of 26 except women of color — a massive change from both 2016 and 2020. They voted for a political revolution over the status quo but from the right, much like the children of Sixties hippies who became Reaganite yuppies. As it turns out, Gen-Z loves Eighties nostalgia of all kinds, whether it’s bubblegum synth-pop, Stranger Things, or the market-friendly politics of Michael J. Fox’s Alex Keaton character from the sitcom Family Ties. 

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Can ‘abundance liberalism’ save the Dems?

By Sohale Mortazaci

But there has been a reluctance to demonstrate even among young Leftists. Some of that is undoubtedly a result of the chilling effect of the campus crackdowns on those protesting America’s role in the Israel-Gaza war and the Trump administration’s disturbing persecution of demonstrators accused of “un-American activity”, such as Mahmoud Khalil, the Palestinian student activist student detained by ICE and facing a revocation of his green card.  

Yet there has also been an ideological drift among activists who now reject the Sanders coalition as sellouts who supported “Genocide Joe”. Many under-30s Leftists are delusional anarchists who barely mention Medicare for All, minimum-wage hikes, or the universal programs popular in Bernie World. They view Gaza as the Mother of All Causes, the most important battleground in the intifada against Western “colonizers”. All other causes are somehow related, from trans justice to Long COVID to fat shaming. Are you autistic? “Learn how police abolition and neurodivergence advocacy are connected”, reads a flyer from a recent Stop Cop City event. No wonder most normies aren’t grabbing their keffiyehs and joining up.

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The Left won’t let go of woke

By Catherine Liu

But if there’s someone that can relate to dropping out of politics — it’s Democrats writ large. Outside of Sanders and a handful of others, party leaders have been MIA during the first wave of the Trump administration’s decimation of the federal government, perhaps to some undisclosed White Lotus hotel to mourn the false promise that they could slowly coast to permanent victory against conservatives by simply letting them die off. Since the George W. Bush years, liberals clung to the arguments made by John Judis and Roy Teixeira in their polemic The Emerging Democratic Majority, that America’s changing demographics — more college-educated professionals and young single women and minorities — would lead to Dem dominance.

Judis and Teixeira have now recanted — and so should the Democrats. They will have to figure out how not to be a party everyone hates more than the horrid Millie Bobbie Brown robot movie. If the Democrats want to get there — and, let’s be honest, no one’s quite sure where “there” even is anymore — then short of sending Bernie Sanders through a time machine to a decade when his brand of righteous fury felt less like a nostalgia act, they may have to craft an appealing majoritarian agenda and a credible leader this side of a nursing home to champion it.

In its small way, the whoopee-cushion function illustrates a weakness of Tesla’s CEO, the serial entrepreneur-turned-political actor Elon Musk. It is not enough, apparently, for Musk to be idolized for his achievements in business and technology. He also insists on engaging in the kind of attention-seeking behavior you might expect from a troubled 13-year-old boy, albeit one who commands unfathomable wealth and influence. The potential downsides for Tesla have long been apparent. The same man who exhibited those fart sounds to me — a progressive-minded software contractor at a major European company — also said that he was thinking about trading in his Model Y in protest at Musk’s political activism, which was then just getting started.

Today, Tesla’s future hinges on a bewildering combination of factors. In addition to Musk’s overbearing persona, given free range on his social media platform, X, he has entangled himself with the radical Trump regime, and with insurgent Right-wing parties in Europe. As if this was not jeopardy enough, the entrepreneur is also betting that he can use Tesla to launch a new wave of paradigm-shifting technological breakthroughs. Or so he claims. In this strange mix of audacity, hubris and mere trolling, it is becoming difficult to tell where the strategy ends and the hot air begins.

For the time being, Tesla is in the firing line as misgivings about Musk pall into outrage. Sales are plunging around the world. In Germany, where Musk enthusiastically backed the Alternative für Deutschland in the recent election, they were down 76% year-on-year in February. In Australia they fell by 66%. A wave of protests and vandalism at Tesla dealerships, which has been building in the US for months, erupted in numerous other countries last week. Meanwhile, a fresh dip in the company’s stock price means that it has now lost more than half of its market value since December. Tesla owners are even trying to disguise their cars by rebadging them as other vehicles. A JP Morgan analyst said of the backlash: “we struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly.”

Thanks to his showboating, Musk has made himself a focal point for resistance to the Trump regime. The surreal spectacle of Just Stop Oil protestors vandalizing a Tesla showroom in London, thereby attacking a company which has done more than any other to kill the petrol car, suggests the strange territory that the brand is entering. Its image is shifting from green icon to MAGA accessory. In a bid to stop last week’s rout, Trump was persuaded to pose with some Teslas and to commit to buying one. But there are few signs, as yet, that Musk’s closeness with the President is delivering significant spoils for his car company, even if Tesla will suffer less than its competitors from the withdrawal of EV subsidies. A rumored contract to supply armored vehicles for the diplomatic service will not outweigh the brand damage of associating with a regime intent on dismantling climate policies. When Musk was known as a brilliant if somewhat eccentric entrepreneur, he could rely on a wide base of progressives, tech fans and admiring business types to buy his cars. By contrast, his new followers on the libertarian Right are more likely to cherish their diesel trucks as symbols of liberty threatened by a despotic green state.

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California has surrendered its streets to assholes

By Matthew Crawford

This all looks like a baffling campaign of self-sabotage, until we step back and reckon with the full scope of Musk’s ambitions. The man is mission-driven to an unusual, almost frightening degree. He uses capitalism as a framework for trying to realize big, concrete visions for the world, and is willing to take risks and suffer setbacks on the way. The simplest explanation for his decision to partner with Trump and ransack the Federal government via his Department of Government Efficiency is that he saw the American state bureaucracy as an obstacle to his goals, namely exploring space, developing artificial intelligence and “deleting the woke mind virus”. As for Tesla, Musk appears to be wagering that a dramatic expansion of the company’s mission will render irrelevant the hostility to his personal actions.

The first bet is autonomous vehicles, in the form of Tesla’s Cybercab, a product that some excitable analysts think could replace not just combustion cars, but car ownership as we know it. Musk has suggested that these vehicles — the prototypes resemble the streamlined noses of high-speed trains — would allow Teslas to operate as self-driving taxis when their owners aren’t using them, independently roaming cities and providing lifts for paying customers. The implication is that we will soon be treating cars as a service rather than something we own. At the same time, Tesla is developing a humanoid robot, for which Musk has made even grander claims. It will, he says, be “the biggest product ever of any kind”. Called the Optimus, this AI-powered minion could “be a teacher, babysit your kids… walk your dog, mow your lawn, get the groceries, just be your friend, serve drinks. Whatever you can think of, it will do.”

Last year, a showcase of these futuristic machines raised more questions than it answered (it later emerged that the “autonomous” robots were being remotely operated). Notwithstanding Musk’s ever-optimistic timelines, they remain largely in the realm of science fiction. And yet, despite the beatings that Tesla has taken in recent months, there is still everything to play for. Its enormous stock market losses have merely erased a surge in value since Trump’s election in November. Tesla is still as valuable as the next five biggest car companies combined, suggesting a level of expectation totally out of proportion with what its current business model can achieve. Market analysts say that Tesla’s value now owes much more to bets on self-driving technology, robotaxis and robots than to car sales.

So why do these investors remain so confident? The obvious answer is that, while Musk rarely delivers his promises in full and on time, he nonetheless has an impressive track record of high-stakes innovation. At Harvard Business Review, Andy Wu and Goran Calic observe that the billionaire tends to focus on problems that “involve navigating scale and overcoming complexity”. He chooses very big and difficult challenges that few rivals have the stamina or risk tolerance to tackle. When he succeeds, he captures a significant advantage in the relevant industry. Take SpaceX, for instance: designing cheap rockets is difficult, and designing reusable ones more so. But by 2023, the company was responsible for almost 80% of US space launches, and nearly half of all launches worldwide.

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The motorists are fighting back

By Matthew Crawford

Tesla’s own history shows the same principles in action. Its original mission, as Musk wrote in 2013, was “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible”. The company had been founded a decade earlier, though Musk did not join until 2004. It began by trying to design an attractive electric sports car, which required bold thinking as well as a good deal of improvisation and borrowing. When its first model, the Roadster, arrived in 2008, it used a Lotus chassis and ran on laptop batteries. Tesla’s subsequent partner, Panasonic, made battery cells with techniques adapted from VHS cassettes. Until recently, the cars have also looked pretty conventional; an element of familiarity has always been important for encouraging people to adopt new technologies.

As it rose to success in the 2010s, Tesla became the first major carmaker to function like a Silicon Valley tech company. Its vehicles have sophisticated software systems, updated remotely like an iPhone, and since 2015 they have been partially controlled by an Autopilot capability. What really made the difference, though, was that Tesla found a way to manufacture EVs on a massive scale. Like Apple, or indeed Henry Ford, the company focused on making just a small range of products in large numbers. And rather than outsourcing to external suppliers, it developed its own infrastructure and supply chains, from enormous battery plants to networks of charging stations. Such tight control over production allowed Tesla to drive down costs and achieve economies of scale. With its S and X models, Tesla effectively created the mass market EV as a viable commercial category.

Tesla is, of course, much larger than Musk. But we shouldn’t fall for the now-fashionable conceit that the CEO is some sort of simpleton who just got lucky; his bloody-minded, autocratic management style has delivered results. Across his various companies, he has personally interviewed thousands of employees. Under his very public leadership, Tesla’s image was initially so potent that it did not advertise at all until 2023. If the brand manages to maintain an aura of possibility, it will be, in considerable part, because people think it unwise to bet against someone like this.

The problem is that the EV industry has caught up. Between them, the world’s big car marques now offer a bevy of electric and hybrid vehicles, making Tesla’s handful of models look increasingly stale. Meanwhile, China’s BYD has overtaken it as the world’s biggest EV maker by volume. Having grown with shocking speed, BYD is dominating the crucial Chinese market, and has just announced a new battery that allegedly charges in five minutes. Tesla needs a careful redesign, but this is one task that Musk seems unsuited to. The recent Cybertruck, with its sharp angles, metallic finish and domineering presence, has an anti-social character that recalls the most unattractive qualities of its chief architect.

And so, the company has reached a perilous juncture. Its remaining customers and investors face an increasingly urgent question: can Musk’s volatile public persona and political recklessness be judged separately from Tesla’s future trajectory, or do they reveal a CEO who is losing the plot? The longer Tesla promises fresh marvels without delivering them, the more people will be inclined to believe there is a madman at the helm.

Whatever the outcome, though, it is already too late to repair the wider rifts that Tesla’s recent troubles have exposed. Not too long ago, the tech world which sprang from Silicon Valley was held together by an ethos of corporate capitalism suffused with cultural liberalism. If this world was shaken by the radicalization of Left-wing identity politics in recent years, it has now been decisively ruptured by some of its most prominent entrepreneurs and moguls shifting into the MAGA orbit. The Tesla brand used to appeal, above all, to people like that man who entertained me in his Model Y: successful, sensible progressives who wanted to believe that capitalism and technology would ensure everything works out for the best. Such complacent optimism now belongs to a simpler age. Clearly, innovation does not have a liberal bias after all.

Musk built his empire on vibes, and used Twitter to circulate hype and tempt investors with risk. In May 2021, his tweets about holding Dogecoin turned what was essentially an internet joke into a legitimate stock. After buying Twitter, he briefly switched the Twitter bird to the Doge logo in April 2023, adding as much as $4 billion to its market value. He had a knack for harnessing vibes for profit.

Now, however, clean-living Tesla drivers are beginning to doubt his vibe. According to a report in Reuters, Tesla’s consideration score — a measure of a consumer’s confidence in the brand and how likely they are to purchase a car from the company in the future — has fallen by more than 50% since November 2021. In addition, Tesla’s Q1 sales this year were 14% below forecasts and the slump was attributed to Musk’s personality.

The problem is not carbon emissions, in other words, nor Houthi attacks in the Red Sea nor a fire in Tesla’s German factory. It is Musk’s bad vibes. Tesla’s downfall began around the same time that Musk acquired Twitter and rebranded it as X. Since then, many argue that X has become a site for misinformation and trolling rather than informed debate. Musk himself is the archetype, airing extreme Right-wing views on issues such as immigration, trans rights, Disney’s inclusion (DEI) policies, the Ukraine war and all-round “wokeness”. Only last week, Brazil’s attorney-general called to regulate social media after a clash with Musk over free speech. The billionaire is known for his ability to move markets with a single tweet, but this is probably not what anyone in Tesla had in mind. So why did his vibes sour so quickly?

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Ireland doesn't care for women

By Rachel O'Dwyer

In his 1936 book The General Theory of Employment, Interest, and Money, John Maynard Keynes wrote of the “animal spirits” that mould the market: his term for the lurking vibes and contagions that shape consumer confidence. Markets are not just rational systems, Keynes wrote. They are shaped by irrational forces; the animal nature lurking in the brain of homo economicus. Before the idea was applied to markets, animal spirits were already spoken of as a sub-human consciousness — something unknowable, unquantifiable. Something like violence or risk or chaos. Something like a vibe, maybe.

The whole point of a vibe is that it isn’t rational; it’s hard to quantify. As philosopher Robin James explains, a vibe is an ambience, but also an intuition that lacks empirical explanations. Peter Thiel once described Musk as speaking with a “super-heroic, almost Homeric kind of vibe” that was out of sync with Silicon Valley.

Nowhere oozes vibes more than social media, which privileges images, audio and video over text. The internet is no longer a place for those looking for truth or narrative, so much as somewhere we go for “moments of audio-visual eloquence” — for a vague undefined feeling of rightness, or even profound wrongness. There’s a definite vibe to an image of Donald Trump’s latest electoral campaign or a trad-wife making sandwiches draped in Cottagecore — even if it is a #cursed vibe for cursed times. Right now, our visual culture, and as a result our politics and markets, are all dictated by vibes.

Take GameStop as an example. In 2021, coordinated decisions by a group of retail investors to buy call options for an apparently worthless game company cost hedge funds who were shorting the stock a lot of money. The value of GameStop emerged, not from any strong correlation between share price and the underlying asset, but from the vibe. The SEC report on GameStop in October 2021 concluded that “it was positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock”. The space between illegitimate gambling and legitimate investment narrowed. So did the space between taking an economic stake and posting an unasked-for opinion on the internet. Finance apps emerged as a new kind of social media.

Or consider the collapse of Silicon Valley Bank in 2023. One explanation for the failure of SVB is the Federal Reserve raising interest rates. As tech stocks were devalued by rising interest rates and venture capital funding began to dry up, many investors withdrew money from SVB to meet their liquidity needs. But another explanation for the collapse was a bank run caused by bad vibes. A user goes to the bathroom, checks their phone, sees or more accurately feels something they don’t like and decides to move their money all in the time it takes unzip their trousers. A student with a loan and a Robinhood account watches a video or sees a meme telling him he likes the stock. Don’t Doubt ur Vibe. The fall of SVB was the result of a vast throughput of rumours and transfer requests that traditional risk assessments were not equipped to measure and financial institutions were not built to withstand. Vibes shifted the index.

And if, in this world, Musk is the ultimate market maker, then Donald Trump is the populist president of vibes. News of a dip in Musk’s reputational capital coincides with the public launch of his Truth Social on the stock exchange. Like Musk, Trump is all vibes and no substance. And this is what makes him so successful as a politician: he can be whatever you want him to be. For a nostalgic Boomer generation, he promises a pathway back to the American dream. For downwardly mobile Americans who never believed in that dream in the first place, Trump’s idiocy confirms their nihilism. So what else than for the meme president to shill his own meme stock? Despite a loss of $60 million in 2023, and reports from the company that revealed “greater profitability challenges” (or “jargon for ‘we don’t make sh*t’”, as one Reddit user put it), Truth Social is still incredibly overvalued. It is also incredibly erratic because its value is entirely divorced from underlying fundamentals. Vibes not verifiable reality.

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Yet perhaps this moment is coming to an end. Tesla’s downfall may be a sign not just that Musk is losing his grip on what’s hot, but that the economy is unhitching itself from the universe of vapourware vibes. Companies such as SVB and Tesla are creatures of the Zero Interest-Rate Policies (ZIRP) that shaped the high-tech venture capital economy from 2008–2023. The policy was an economic move designed to stimulate investment in the years following the financial crash — and it encouraged risky investment based on vibes. But today, the tide has turned. The real economy is back, and it may not be kind to the titans of tech.

Will Musk and Tesla survive the new regime? Many of the business practices that we associate with Big Tech today are, arguably, features of the ZIRP era: companies that operate without making a profit, or that may make a profit in some inscrutable way from consumer data at some point in the future; the practice of poaching engineering talent from one tech enclave to another for eye-watering salaries, and that of “blitzscaling” (expanding production so quickly that competitors go bust competing). Combined, this allowed the Bankman Frieds and Musks of the world to rise to improbable levels of wealth, without actually producing any real wealth at all. Musk’s hyperbole vibed with a high-risk, low-interest-rate economy. But how long can one of the richest men in the world be the CEO of a car company that makes a net loss every year? Maybe this #cursed vibe has finally run its course.