Newsletter No. 5 — (De)Codifying the Future
When Europe Realizes It’s Falling Behind: AI Act, Gigafactories, and the End of Capitalism as We Know It
🇬🇧 English edition—Portuguese version here.
“To code is to legislate. The difference is that algorithms do not always go through democratic scrutiny.” — Dario Rodrigues
Mario Draghi warns: the European Union created only three large-scale AI models in the past year, while the US produced 40 and China 15 — it is time to redesign the social contract, capital, and value.
According to Mario Draghi, the European Union is “falling behind” in the race for competitiveness, growth, and innovation, due to institutional and regulatory delays and a lack of strategic investment. In the past year, the US launched around 40 large-scale AI models, China launched 15, and Europe launched only three.
This figure is more than statistical: it is a symptom that, if we continue to measure progress solely with GDP, we will ignore the true revolution underway.
We are in an accelerated transition. Artificial intelligence is dismantling the foundations of the system we know:
GDP as the central metric,
Employment as the source of identity and purpose,
Capitalism as being based on human labor.
Here are five points to (re)think the future:
1. Capital Without Human Labor
AI scales intellectual labor almost without limits. When intelligent agents surpass humans in cognitive tasks, capital no longer needs human labor to multiply. Robots will extend this logic to manual labor.
2. GDP Is No Longer Enough
Gross Domestic Product remains the benchmark indicator, but it no longer captures the essentials: innovation, trust networks, and adaptability. Worse: it measures human development in a distorted way. An outbreak of cancer or the production of weapons raises GDP more than disease prevention or the pursuit of peace.
We need metrics that reflect not only what we produce, but also what we know, how we cooperate, and how we withstand crises.
3. A Social Contract in Mutation
Employment guarantees not only income but also identity and community. When it disappears, it creates social voids: for example, people with mental health problems have unemployment rates about 85% higher than others (OECD), and widespread economic grievances (including unemployment) strongly influence the decision to engage in protests, especially where inequality or institutional fragility is high (SAGE).
4. Falling Profits, Eroding Tax Base
UBI (Universal Basic Income) refers to providing all citizens with a fixed income, regardless of whether they are employed.
In a simple calculation, if the European Union (around 300 million adults) were to allocate €1,000 per month to each adult, the annual cost would be about €3.6 trillion.
👉 That is more than ten times the EU’s annual budget (approx. €200 billion, European Commission).
In other words, a UBI financed solely by traditional taxation is unfeasible.
5. Decentralization as a Strategic Path
If artificial intelligence remains in the hands of a few, concentration of power will be inevitable. But there are alternatives:
Programmable digital currencies, enabling direct and transparent financing of community projects (example: Celo).
Blockchain applied to energy, making it possible to trade surplus solar energy between neighbors (example: Power Ledger).
Authenticity registries, compatible with blockchain for storage and distribution, validate digital content at its origin and combat disinformation. The case of C2PA / Content Credentials illustrates this well: today, it is a federated system of digital signatures, but one that can be anchored in blockchains or decentralized identities to ensure greater transparency and immutability.
These examples demonstrate that decentralization involves distributing power more evenly, making it more transparent and democratic, thereby creating the space for a fairer and more resilient economy.
Final Reflection
Europe acknowledges its delay but responds mainly with preventive regulation, such as the AI Act, the first European regulation on AI. It is a pioneering legal framework based on risk, transparency, and prohibitions of unacceptable uses. Yet it risks stifling innovation and reinforcing Europe’s dependence on external giants.
In the US, by contrast, the GENIUS Act aims to establish clear conditions for new decentralized digital currencies (e.g., stablecoins) to become legitimate financial instruments, thereby opening the door to innovative policy and economic solutions.
The comparison is clear:
AI Act (EU): regulates, classifies risks, and imposes obligations.
GENIUS Act (US): opens a regulated space for decentralized innovation.
👉 In other words, the European Union still sees AI mainly as a risk to be controlled, while the US begins to view the decentralized digital domain as an opportunity to be scaled.
It is in this dilemma—between regulatory containment and decentralizing momentum—that the future of Europe’s competitiveness will be decided.
In the next issue, we will explore Emad Mostaque’s proposal of the Intelligent Internet, a strategic vision for a decentralized and ethical infrastructure capable of aligning artificial intelligence, the economy, and human values.