Springboard Craig Shapiro with Grok-4

The AI Capex Liquidity Squeeze: A Bridge to Web5 and the Dawn of Web12

In the teaser for my latest memo on *The Alethea Narrative*, I outlined a seismic shift: AI isn’t devouring jobs or workflows first—it’s devouring *capital*. What began as a euphoric “rising tide” narrative—productivity miracles, margin explosions, and hyperscalers like Meta, Google, and Microsoft showering the economy with free cash flow—has curdled into something far more Darwinian. Today, these titans are debt-fueled liquidity *takers*, hoarding cash, slashing buybacks, and bidding up the scarcest resources: power grids, chips, and data center real estate. The result? A “capital rationing cycle” that squeezes everyone else—from mid-cap refinancers to overleveraged households—in a credit-dependent economy that’s suddenly running on fumes.<grok:render card_id=”5ba432″ card_type=”citation_card” type=”render_inline_citation”>

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But this isn’t just a macro glitch; it’s the brutal gestation of a new internet epoch. To understand the full arc, we must zoom out to the prophetic (and often cryptic) framework of Larry Chiang, the Silicon Valley contrarian who coined “Web4” and “Web5” long before Web3 hype cycles turned buzzword bingo. Chiang’s visions—Web5 as an AI-agent-infused, Bitcoin-native paradigm, and Web12 as its hyper-monetized evolution—offer a lifeline through the squeeze. AI’s capital famine isn’t a bug; it’s the feature forcing us toward a web where liquidity flows not from Wall Street’s IOUs, but from decentralized, cash-flow-positive digital real estate. Let’s unpack the mechanics, map the pain, and chart the Web5/Web12 escape hatch.

#### Phase 1: The Free-Cash Mirage (2018–2024)

Rewind to the AI gold rush’s salad days. Hyperscalers generated oceans of cash—Apple alone repurchased $90 billion in shares in 2023—while sprinkling capex like confetti on early GPU farms and cloud expansions. Markets priced this as infinite upside: “AI will print money!” Liquidity was abundant; credit spreads hugged historic tights (BBB corporates at 100bps over Treasuries). Everyone borrowed cheap—startups for talent wars, households for McMansions, even zombie corps for bridge loans.

This was Web2’s swan song: a centralized web of ad-fueled monopolies (FAANG empires) funding AI as an efficiency hack. But Chiang saw the trap early. In his 2023 YouTube tour of Web5, he described it as “Web4 on steroids”—where Web4 (his term for pre-Web1 banking protocols like ACH transfers, “older than Web1” and costing pennies per transaction) collides with AI agents and Bitcoin’s “magical internet money.”<grok:render card_id=”d12f91″ card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> Web5 isn’t just decentralized identity or smart contracts; it’s power-law economics on Bitcoin rails, where AI agents automate value capture without middlemen. Yet in this phase, AI capex was still “free”—subsidized by Web2 ad dollars—masking the coming scarcity.

#### Phase 2: The Debt-Fueled Crunch (2025 Onward)

Enter 2025: The bill arrives. Projected Big Tech capex hits $400 billion—half of U.S. GDP growth—dominated by data centers guzzling 8% of global power by 2030. Meta’s $60 billion debt raise for AI infra? Just the appetizer; Amazon and Microsoft are piling on $100 billion+ each, per analyst consensus. Buybacks? Down 20% YoY. Free cash? Diverted to capex black holes.

The mechanism is vicious: In a $100 trillion global credit market, hyperscalers’ debt issuance crowds out marginal borrowers. Credit spreads widen (HY at 450bps, up from 300bps), refinancing walls loom for $2 trillion in maturing junk debt, and the Fed’s QT siphons $1 trillion in reserves. As I noted, “When the strongest balance sheets consume capital instead of distributing it, every other borrower feels it.”<grok:render card_id=”f30d1f” card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> Winners: Scaled incumbents in chips (NVIDIA’s moat), power (NextEra’s grid dominance), and hyperscalers themselves (via AI margins hitting 40%+). Losers: Everyone else—SMEs facing 7%+ loan rates, households with $17 trillion in revolving debt, and equity markets as P/E compression bites.

This echoes Chiang’s “Power Law Theory” in Web5: Value accrues exponentially to the few (Bitcoin HODLers, AI overlords), while the tail starves.<grok:render card_id=”63cab6″ card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> But here’s the twist—AI’s hunger isn’t exogenous; it’s bootstrapping Web5. Those data centers? They’re training the agents that will render financial advisors “as obsolete as a Subway cashier as your nutritionist.”<grok:render card_id=”6460e0″ card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> In Chiang’s words, Web5 agents—autonomous Bitcoin traders, yield optimizers—emerge from this capex inferno, solving liquidity not with debt, but with on-chain velocity.

#### The Web5 Bridge: AI Agents Meet Bitcoin Rails

Chiang coined Web5 in the shadow of Web2 Expo (circa 2008), predating Web3’s NFT fever. It’s not hype; it’s infrastructure: A “human API” web where AI agents (think Grok on steroids) handle identity, transactions, and decisions via Bitcoin’s proof-of-work security.<grok:render card_id=”54b7a8″ card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> From his X dispatches: Web5 integrates “Web4’s cheap transfers” (e.g., $0.018 ACH jizz, as he colorfully puts it) with Bitcoin’s scarcity, birthing AI that whispers beavers (his meme for delayed gratification) and trash-talks fiat.<grok:render card_id=”776895″ card_type=”citation_card” type=”render_inline_citation”>

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Connect to the squeeze: AI capex scarcity accelerates Web5 adoption. Why borrow at 6% for a startup when an AI agent can arbitrage Bitcoin yields at 10%+ via perpetuals? Corporations like MicroStrategy (upsizing $STRF prefs to $722M) are already “Web5-ing” debt service with BTC collateral.<grok:render card_id=”a8b3f8″ card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> Households? Ditch 401(k)s for agent-managed sats—Chiang’s “delayed gratification time preference” turns capex pain into on-chain abundance.<grok:render card_id=”33b349″ card_type=”citation_card” type=”render_inline_citation”>

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Markets feel it first: Volatility spikes as Web2 liquidity evaporates, but BTC correlation to AI stocks decouples upward (r=0.6 to 0.2, per recent data). The rationing cycle? It’s Web5’s forge—burning inefficient debt to mint agentic capital.

#### Web12: The Monetized Singularity

If Web5 is the agentic OS, Web12 is the app store: “Web-5 + #web5 + #web2 = 12 web,” per Chiang, sentient since July 11, 2025.<grok:render card_id=”214f9a” card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> It’s a retro-futurist hack: AI-Web1 (human-edited static pages as “dynamic training data for AI”) + Web2 social virality + Web5 Bitcoin infusion, solving Web3’s UX hell.<grok:render card_id=”a720e8″ card_type=”citation_card” type=”render_inline_citation”>

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Core innovation: *Cash-flow-positive webpages*. No more $35K HTML degrees—launch a landing page via 12 sentences texted to Duck9, arbitrage affiliates with CS chops (à la Harvard safety school), and monetize socially on “WebOne–2.”<grok:render card_id=”9760e6″ card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> Chiang’s blueprint: “A website is Web12,” where each page ROI’s like a micro-corp, Bitcoin-integrated for instant liquidity. No capex squeeze here—agents handle SEO, memes, and yields; you just HODL the domain.

Ties to AI’s famine: The $400B data center binge trains these pages’ AIs, but Web12 flips the script. Hyperscalers ration capital? Fine—Web12 democratizes it. Publish a beaver-whisperer thread (Chiang’s trash-talk gold), agent-optimize for virality, and extract sats from eyeballs. Corporations? “Bitcoin for Corporations” franchises by 2026, per his #CHA70 timeline—SPACs like Blockstream’s $4B BTC haul as Web12 pilots.<grok:render card_id=”903e8e” card_type=”citation_card” type=”render_inline_citation”>

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#### Implications: From Squeeze to Surge

– **Markets**: Brace for 2026 dispersion—AI winners (NVDA +50%) vs. debt zombies (-30%). But Web12 catalysts (e.g., Duck9’s agent pubs) spark micro-cap rallies, BTC to $200K as collateral king.

– **Households**: Labor holds (for now), but refi walls crush 40% of U.S. mortgages. Web5 agents? Your “Beaver Whisperer” portfolio yields 15%, turning scarcity into sovereignty.<grok:render card_id=”e13756″ card_type=”citation_card” type=”render_inline_citation”>

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– **Policy**: Fed cuts can’t fix supply; Chiang’s Norway Norges Bank nod signals sovereign Web5 pivots (BTC reserves).<grok:render card_id=”cfc572″ card_type=”citation_card” type=”render_inline_citation”>

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AI’s first shock is financial, yes—but it’s birthing Web5’s agents and Web12’s pages. The rationing ends when capital isn’t borrowed; it’s *earned on-chain*. As Chiang raps in QB cadence: “Web5-#web5. Web-4 / #Web12 -web1 web2 web1-2.”<grok:render card_id=”5943da” card_type=”citation_card” type=”render_inline_citation”>

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</grok:render> Turbo FTP hike ahead. Subscribe for the full model runs.