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Editor’s Note: Intelligence Is Becoming Physical
Much of the conversation around exponential technology still focuses on screens—models, apps, and interfaces. But this week’s tech stories point to something deeper and more consequential. Intelligence is no longer confined to software. It is reshaping energy systems, industrial infrastructure, capital markets, and public institutions.
We are entering a phase where intelligence must be powered, financed, governed, and trusted at scale. This transition may feel quieter than a breakthrough model release, but it is far more enduring. It marks the difference between novelty and permanence. —TE
📌 Top Stories
Powering Intelligence: Tech Giants Move Deeper into Energy
As artificial intelligence systems scale, their growing energy demands are forcing technology companies to confront the physical foundations of digital intelligence. This week, Alphabet announced a $4.75 billion acquisition of Intersect, a data center and energy infrastructure firm, to secure more power capacity for its expanding AI operations. The deal includes Intersect’s team and multiple gigawatts of energy projects in development, while the company will continue to operate under its own brand and leadership. Source: Yahoo Finance
Why it Matters: What was once treated as an external constraint is increasingly becoming a core strategic asset. Data centers are evolving into energy infrastructure, and companies that once optimized software are now negotiating power generation, storage, and transmission. The future of intelligence is being built not just in code, but in kilowatts.
This shift reflects a maturation of the AI era. Intelligence at scale does not float above the material world—it draws deeply from it.
The Capital Behind the Curve
Building the infrastructure required for advanced AI is proving extraordinarily capital-intensive. To meet those demands, technology firms are issuing debt at record levels, financing everything from chip fabrication and data centers to network expansion and long-term energy contracts. Investors, for now, appear willing to underwrite these bets. Source: Investing.com 🔗
Why it Matters: Unlike earlier tech cycles dominated by lightweight software platforms, today’s breakthroughs depend on heavy, durable assets. Returns may take years to materialize, but the expectation is that intelligence—once embedded across industries—will reshape productivity broadly enough to justify the scale of investment. Capital markets, in other words, are becoming increasingly entangled with the trajectory of intelligence itself.
AI Leaves the Screen and Enters the Factory
While public attention often focuses on consumer-facing AI tools, a quieter transformation is underway in manufacturing and critical infrastructure. Government agencies and standards bodies are accelerating efforts to integrate AI into factories, logistics systems, and essential services, emphasizing reliability, safety, and verification. Source: NIST 🔗
Why it Matters: These systems are designed less to impress than to endure. The priority is not novelty, but trust—AI that can operate continuously, predictably, and alongside human oversight. This is intelligence moving from experimentation into institutional adoption. When AI becomes part of society’s background architecture, its impact grows even as its visibility fades.
Different Futures, Different Models
Beyond the dominant U.S. narrative of rapid commercialization, other nations are advancing alternative approaches to deploying advanced technologies. In countries like Australia, national strategies emphasize sector-specific integration, ethical oversight, and public benefit alongside innovation. Source: CSIRO 🔗
Why it Matters: Rather than racing to scale first, these models prioritize fit—how intelligence enters healthcare, agriculture, energy, and research ecosystems shaped by local needs and values. Together, they suggest the future of intelligent systems will not be singular or uniform, but plural.
🔹 Quick Picks
Tech funding remains resilient despite uncertainty
Startups working in AI, biotechnology, and resilience technologies continue to attract capital. Investors appear increasingly focused on companies building foundational infrastructure rather than consumer-facing novelty, suggesting confidence in long-term technological transformation even amid short-term volatility.
Source: TechStartups 🔗
SoftBank signals caution on large AI financing commitments
In contrast to previous articles, some reports indicate growing hesitation around massive AI funding pledges. The shift reflects increased scrutiny of capital intensity, energy demands, and the timelines required to turn advanced compute into sustainable returns.
Source: Yahoo Finance 🔗
Smart glasses and wearables quietly regain momentum
Wearable devices are returning not through flashy hardware, but through contextual intelligence—systems that interpret environment, intent, and attention. This slower, more practical approach suggests ambient computing may finally be finding its footing.
Source: Economic Times 🔗
Europe accelerates enforcement of digital market rules
Regulators continue applying pressure on major technology platforms, including fines and compliance mandates tied to competition and app distribution. Europe’s approach reflects an effort to shape digital markets through governance rather than pure market forces.
Source: AP News 🔗
Taiwan expands its drone and defense-tech industrial base
In response to regional security pressures, Taiwan is investing heavily in domestic drone manufacturing and related technologies. The move underscores how advanced technology development is increasingly shaped by geopolitical realities.
Source: Taipei Times 🔗
✔ Episode #3 of The Way of Tech will be posted this week and Episode #4 is already in the can and ready to be posted next week. This week's considers the value of failure as an essential step in the path to success. Episode #4 emphasizes the importance of letting go of control in order to let our tools work for us—whether in "the shop" or in life. You'll notice the program also has a new look as we continue working to improve its quality and develop its unique, if not quirky, "personality."
✔ Mark your calendar for our monthly Singularity Circle on Saturday, January 3, 2026, at 10:00 AM Pacific Time (1 PM ET / 6 PM UK / 7 PM CET). A Zoom link and reminder will be sent out in advance of this online gathering. Feel free to invite a friend or more.
✔ Although it's been envisioned since 2018, until recent months, Singularity Sanctuary could not have been possible. It would have been too costly and time consuming without outside support. But today, thanks to a mounting number of affordable AI tools, what once would have taken weeks or months, now only takes a few hours to pull off. Curator Todd Eklof is still working on establishing the pace and look of our signature offerings (i.e., Exponential Times, The Way of Tech, Singularity Circle). But in the near future, expect many other benefits, like classes on technology and ethics and on using some of the very technologies that are enabling Singularity Sanctuary to offer its quality products and programs.
Closing Reflection: Yes, Einstein, There Is a Santa Claus
Christmas has always been a season where imagination outruns explanation. And yet, each year, the world asks a remarkably technical question: How could Santa possibly do all this?
How does one figure visit millions of homes in a single night? How does he know who lives where, what children want, or whether they’ve been naughty or nice? For some, these enduing questions are taken as proof that Santa can't be real. But in an age shaped by exponential technology, they begin to sound less like impossibilities and more like engineering challenges.
Instantaneous travel? Einstein showed us that time itself is flexible. At relativistic speeds, minutes for one traveler can stretch into hours—or days—for the rest of us. From Santa’s perspective, Christmas Eve may not be rushed at all. We’re the ones frozen in place.
Seeing everything at once? Satellites already circle the Earth continuously, observing weather, cities, and individual devices. Knowing who’s been naughty or nice no longer requires magic—just sensors, data, and pattern recognition.
And then there’s Santa’s bag. A sack that never empties, no matter how many gifts are pulled from it, sounds suspiciously like remote storage accessed on demand. In theoretical physics, a wormhole could connect distant locations through hidden shortcuts in spacetime. From that angle, Santa isn’t carrying all the toys—he’s reaching into a warehouse that exists somewhere else entirely.
From this perspective, Santa doesn’t violate the laws of physics so much as anticipate them.
That doesn’t explain Santa away. It reminds us that wonder has always been the first draft of understanding. Yesterday’s magic becomes today’s science, and today’s science still feels magical while we’re living through it.
So perhaps Santa endures not because we’re naïve, but because we intuit something true: that generosity can scale, that distance can collapse, that time can bend, and that one night can feel infinite when the rules are different.
So, yes Einstein, there is a Santa Claus. At the very least, he isn't undone by physics but enabled by it.
And maybe that’s the quiet lesson of Christmas in exponential times: not that belief requires abandoning reason, but that reason, pursued far enough, circles back to wonder, awe, and imagination.