The Chopping Block: The Midterm Mega Tsunami, a16z Goes Frontier, the CFTC Clears Equity Perps, and the Fight Over Abliterated AI Models

The hosts discuss a16z Crypto’s expansion into a16z Frontier, which keeps crypto but adds “new computing paradigms,” agent-to-agent systems, and other futuristic technologies. Haseeb describes it as a grab bag for ideas that do not fit a16z’s existing AI-infrastructure or biotech funds, while Robert jokes that it may simply reflect whatever Chris Dixon wants to pursue. They compare the move with Paradigm’s 2023 attempt to become a crypto-and-AI firm, which Twitter mocked until Paradigm retreated. The hosts say the absence of similar backlash now reflects how completely AI has changed the venture landscape.

The hosts say Democrats delivered a far larger midterm victory than expected, taking races that had been considered deeply Republican. Polymarket’s favorite won 419 of 426 races, and by 7 p.m. the market priced a 99% chance of total congressional control, making the election effectively over for anyone watching prediction markets. Mississippi was the conspicuous miss, but the race was decided by roughly 50 votes and remained incompletely counted. Robert argues that prediction markets were accurate in aggregate but still underpriced the magnitude of the wave because they followed polls that substantially underweighted Democratic support.

The hosts interpret the result less as an embrace of Democrats than as a rejection of Trump, Trumpism, inflation, the Iran war, and candidates Trump personally backed. Tom says Republicans appeared to discover they had been living in a political bubble, while Robert argues Trump dragged the entire Republican ticket down. Robert’s crypto-specific test is whether Trump made America the crypto capital of the world; his answer is “not really,” citing Trump Coin and World Liberty Financial as liabilities. They expect investigations and corruption messaging around Trump to dominate the next two years.

Haseeb cites Stand With Crypto’s numbers: 226 pro-crypto versus 106 anti-crypto members in the House, and 19 versus 8 in the Senate. Robert says the blue wave produced many moderate candidates in traditionally red districts, including Bitcoin-friendly Texas representative-elect figures, making the new Congress potentially pragmatic despite its Democratic dominance. He still expects almost no crypto legislation: Maxine Waters may revive a Clarity-style bill, Elizabeth Warren favors regulation that could make crypto obsolete, and Trump may veto whatever reaches him. The panel expects posturing, hearings, and positioning for 2028 rather than signed laws.

CFTC chairman Mike Selig announced that U.S. designated contract markets could offer single-stock perpetual futures, allowing equity perps to trade domestically rather than forcing users offshore. Cboe and Citadel sued within hours, arguing the products are swaps and should face different restrictions. Tarun cannot understand why a market maker would oppose what looks like a new source of volume, though he speculates the firms may want time to prepare or protect existing exchange economics. The others similarly reject the idea that major market makers need to learn how perps work, noting that many would move offshore volume into the U.S. if permitted.

The hosts review Anthropic’s S-1 update: quarterly revenue rose from $11.5 billion in Q2 to $17 billion in Q3, roughly 50% quarter over quarter, although the company returned to a slight operating loss after being profitable in Q2. A new risk factor discusses recursive self-improvement, where an AI improves the next generation of AI and creates “dramatically accelerating progress.” The hosts joke that this sounds positive for the business, but conclude that it is framed as a regulatory or singularity risk rather than a straightforward commercial benefit.

After the midterms, data-center and AI-related stocks moved in different directions: Anthropic’s prediction-market-linked shares rose, while NVIDIA, memory, and some chip-related names fell. Robert explains the bullish case for frontier labs: if new data centers are delayed, established hyperscalers and labs with compute already contracted face less competition and may avoid additional capital expenditure. Tarun counters that fewer data centers ultimately limit growth and says non-U.S. compute commitments have accelerated by roughly 100 times in two weeks. They also note that new Austin mayor Gina Hinojosa campaigned on slowing or imposing a moratorium on Texas data-center expansion.

As the conversation shifts from crypto toward AI infrastructure, the hosts joke about renaming the show The Chipping Block. The name would evoke slowly beating away at something rather than the single decisive execution implied by a guillotine-style chopping block. They connect the joke to the show’s gradual drift from crypto into adjacent frontier technologies, saying their principles and subject matter have been “slowly chipped away at.” The proposed name is not adopted, but it becomes a running description of the episode’s increasingly AI-heavy discussion.

The Foundation for American Innovation published “The Obliteration Threat,” arguing that models modified to remove refusal behavior enable malicious actors and should expose their providers to serious liability or removal. Haseeb explains that security researchers use these models for red teaming and cyber defense because ordinary models often refuse defensive tasks; he compares a ban to prior restraint and draws parallels with First and Second Amendment arguments. Tarun and Tom say the models are effectively impossible to eliminate and should be distributed with clear use-specific safeguards. They expect a jurisdictional split similar to crypto, with U.S. providers restricting inference while foreign providers continue serving it.