The article discusses the competitive landscape of artificial general intelligence (AGI) development, likening it to an all-pay auction where participants must invest heavily regardless of the outcome. It argues that this model can lead to inefficiencies and raises concerns about resource allocation in the race towards AGI. The implications of such a competitive framework on innovation and ethical considerations are also explored.

• The AGI race functions as an all-pay auction where every competitor pays their bid (massive capex) regardless of whether they win, driving "value dissipation" toward the total prize value
• Microsoft (>$30B/quarter) and Alphabet (~$85B by 2025) exemplify capex levels that only make sense if losing the race means losing everything already invested
• Because AGI has no agreed definition or finish line, bidders tend to overbid, risking a bubble where combined spending outstrips any realistic returns
• Ordinary investors and pension holders bear outsized risk since most bidders will likely lose while only one winner captures the prize