Carlyle Compares AI Race to Shale Boom: Aaarrgghhh!

World Oil reported:

The eye-popping amounts Big Tech is shelling out on artificial intelligence resembles shale’s golden age of spending before a price crash wiped out $2.6 trillion in equity, Carlyle Group Inc.’s Jeff Currie says.

Energy and technology are two of the most important pillars of the economy, leaving other key sectors including finance and health care “useless” without the other two, the veteran commodity market forecaster wrote in a research note Tuesday. 

“The shale boom was arguably the most notorious ‘growth at all costs’ capex cycle in the modern era, where energy industry-wide capex reached 110-120% of cash flow at its peak,” Currie said. “So for technology spending to reach energy industry levels should raise a lot of questions.” 

Much of the investment from tech companies is going toward chips and data centers to build up computing resources to support AI development. AI compute can be measured in dollars per hour, much like oil is traded in dollars per barrel, Currie wrote. 

Confidence in future AI computing prices stabilizing around the $1- to $2-per-hour range “echoes the same confidence that the US shale producers had in $100/bbl oil that drove their spending far above cash flow,” he wrote.

U.S. oil producers were able to only keep drilling debt on their balance sheets during the early days of the shale boom, while entering into long-term contracts with special-purpose vehicles that would take on the burden for additional capex to build pipelines. That finance structure is reminiscent of the AI boom today, he said.

“Big Tech AI appears to be using the exact same playbook that the energy industry used as these arrangements clearly rhyme with today’s AI datacenter SPV arrangements,” Currie said. “We cannot forget about the land grab, or the ‘race for positioning’ as the oil patch called it, which mirrors the AI ‘land rush.’”

Our part of West Texas lived through the shale boom and subsequent bust.  Current drilling is more reminiscent of the bust phase despite Trump II's call for "drill baby drill."  Lots of oilfield equipment sits parked and "man camps" are one third full.

We are in the AI subsidy phase as local governments plan to provide cheap electricity and water to already provided inexpensive land outside San Angelo city limits.  

City government and the Chamber of Commerce are facilitating "data center site development tied to renewable energy access."

Our Interim Economic Development Executive Director is also an Assistant City Manager and plans to retire soon.  It's not clear his future plans but Michael Dane is in a key position to monetize his public service experience in the private sector should he keep "facilitating."  

City Manger Daniel Valenzuela also plans to retire in October 2026.  That would mean the top two people who negotiated any AI data center deal will not be around to see how it worked out.  

We lived through the Shale Boom when local hotel rooms went for NYC rates, restaurants and roads were packed and driving in the direction of the oil field was a life threatening experience (as big truck drivers texted amid road work).  

Skybox Data Centers needs access to lots of water and electricity and so far the city has been mum on any economic development proposals, although they are surely underway.  The City sold Skybox the land which sits outside city limits.  There has been no talk of annexation to date.  

Citizens have funded water infrastructure via high water bills and special capital charges.  It would be tragic for Skybox or its future tenant/renter/user to pay only marginal water costs, even worse if heavily discounted.  

The Hickory Aquifer Project has the ability to pump 10.8 MGD to San Angelo and has the equipment in place to treat a total of 8 MGD.

Ricky Perry's Fermi Amarillo AI project, known as Project Matador, plans to use 2.5 million gallons a day but will expand to 10 MGD.  

Should Skybox's project have a similar arc, their data center would occupy nearly 100% of the Hickory Water production.  What percent of the costs, operating, capital and infrastructure, might they actually pay?  

The Carlyle Group kicked off PEUReport in 2007 with their ability to sell 50 airport operations to Dubai Aerospace just months after the Dubai Ports World uproar.  The politically connected private equity underwriter (PEU) located in Washington, D.C. to tap government wallets and directly influence laws and regulations.  Their founders became "policy making billionaires."

Carlyle's current political challenge is getting U.S. government approval to sell Crown Bioscience, a San Diego based clinical research organization (CRO) to affiliate Adiconn, a Chinese lab/CRO.  I believe they can thread that needle.

Texas Governor Rick Perry gave Carlyle $35 million to add 3,000 jobs at Vought Aircraft Industries in Dallas.  By the end of the incentive period Vought had cut 35, that was $1 million per job lost.  

Politicians Red & Blue love PEU and their new TechGod/CryptoBro brethren.  Increasingly, more are one.  

Note:  I have been amazed by the intersection of my three blogs, PEUReport - harms done by private equity, StateoftheDivision -local San Angelo issues and ArisFreedomSwitch - politics in general.  I could cross post most pieces on a daily basis.  That's how intertwined things have become.

Update 11-30-25:  One Virginia state legislator won his election because of his promise to fight datacenters.

SWFs & PEUs: Lots of News

Private Equity Insights reported:

China Investment Corp. is close to completing the sale of about $1bn in US private equity stakes, marking one of the largest sovereign-wealth disposals in the secondary market this year, according to sources cited by Bloomberg. 

Paris-based Ardian is said to be among the final bidders for the portfolio, which includes positions in funds managed by Carlyle, Hellman & Friedman, and Welsh Carson Anderson & Stowe. 

CIC relaunched the process after pausing an earlier attempt to sell similar stakes in vehicles run by Carlyle, KKR, and TPG.

The sovereign fund’s sale comes amid a broader wave of secondary activity. Singapore’s GIC has been exploring a $1bn disposal of private equity fund stakes in Blackstone, Apollo, and TDR Capital.

Sovereign Wealth Funds (SWF) are essentially a government sponsored private equity underwriter (PEU). Both have been in the news lately.  The Ukraine-Russian peace plan arose from Russia's SWF according to Red Team Rep. Mike McCaul.  

Saudi SWFs were front and center during the Crown Prince's recent visit to the White House.  PEUs with Saudi money have a lead role in Middle East Peace (Jared Kushner of Affinity Partners)..

Apparently, there is nothing a greed and leverage boy cannot do.  Actually, there is.  They can't seem to return funds to investors such that they don't need to dump their stakes in the secondary market.  CIC committed $350 million to Carlyle funds in 2013.  CIC made additional Carlyle investments in 2016 & 2017.

If PEUs fail at the most basic part of their job (returning money to investors), why would we expect them to be good at diplomacy or youth sports team management, much less healthcare or the kajillion other things government leaders are charging them with?  

Riddle me that....

Politicians Red & Blue love PEU and their new TechGod/CryptoBro brethren.  Increasingly, more are one.

DOGE Has Been Integrated, Genesis Kicks Off

Former Andreessen Horowitz Managing Director Scott Kupor, now the head of the Office of Personnel Management indicated DOGE is no more.  Kupor said DOGE "doesn't exist" and is no longer a "centralized entity."  Translation: 

 DOGE succeeded in overseeing the secret infiltration of TechGod AI into and across government functions.  

DOGE was staffed by TechGods and private equity underwriters (PEU).  Many remain and they are scattered through various departments.  DOGE used the PEU playbook to establish an AI beachhead.  

Now it's time to mine and monetize, which brings us to Trump II's latest Techexecutive Order, the Genesis Mission.  

It is:

"a dedicated, coordinated national effort to unleash a new age of AI‑accelerated innovation and discovery that can solve the most challenging problems of this century. 

The Genesis Mission will build an integrated AI platform to harness Federal scientific datasets — the world’s largest collection of such datasets, developed over decades of Federal investments — to train scientific foundation models and create AI agents to test new hypotheses, automate research workflows, and accelerate scientific breakthroughs."

It's the federal dataset giveaway.  TechGods hate paying for intellectual property and to date they've mostly stolen it.  

Heading up the effort is Michael Kratsios, White House Chief Science & Technology Officer.  Kratsios is a protégé of live forever TechGod Peter Thiel.

AI pinheads want everything for free or at a steep discount.  So far it's power, water, land, intellectual property, federal loan backing, escape from state regulation, access to Uncle Sam's wallet, regulatory protections, tax avoidance...

Genesis will prioritize the following areas in their addressing the "challenging problems of our century":

It seems we can add government sponsored R&D to their list of free to low cost needs, a list that likely never ends.  Who pays while TechGods benefit?

Politicians Red & Blue love PEU and their new TechGod/Cryptobro brethren.  Increasingly, more are one.  

We have government of the PEU/TechGod/Crytobro, by the PEU/TechGod/Cryptobro and for the PEU/TechGod/Cryptobro.

Update 11-26-25:  Two recent stores on endangered species and air pollution show those areas not to be Trump II priorities.

Apparently Uncle Sam has not subsidized businesses enough for the likes of the PEU/TechGod class.

As for what TechGods plan to do with the AI they've already installed, Homeland Security will soon have access to Medicaid data:

The Centers for Medicare & Medicaid Services (CMS) published a Federal Register notice yesterday officially authorizing the sharing of Medicaid applicant data with the Department of Homeland Security beginning today. The notice rescinds previous “interagency integrity” firewalls.

Blasting away interagency firewalls is such a TechGod thing to do.  

Trump is also not interested in protecting your retirement account.  Bloomberg Law reported:

Labor Department to end defense of 401(k) investment-advice regulation. The Employee Benefits Security Administration no longer wants to defend the Biden administration’s fiduciary rule regarding one time rollover advice.

Insurance companies challenged the rule.  PEUs have made significant forays into insurance firms, such that they can steer those capital pools toward their private equity and private credit offerings.

Add another non-priority to the "won't make it" on the list of the "most challenging problems of this century."  It's not species loss, air pollution, maintaining firewalls between federal data sets or preventing retirement account abuse.    

Update 12-1-25:  Musk tried to explain why DOGE accomplished so little using baby pandas.  It was bizarre and nonsensical.

DOUGEBAG did insert AI deep inside federal databases at significant profit for Musk, David Sacks and his fellow "All Pinhead" podcast hosts, as well as other TechGods.

DOUGEBAG - Department of Ungodly Greedy Executives Biased Against Government

Update 12-21-25:  TechGods plan to put political money behind the people they can control.

Update 2-23-26:  WhiteHouse.gov added more benefits for the billionaire AI clans.

...new U.S. initiatives to accelerate global adoption of the American AI stack through the American AI Exports Program, including: 

The American AI Exports Program’s National Champions Initiative: The Commerce Department will incorporate partner nations’ leading AI companies into their customized American AI Export stacks, demonstrating that American technology directly strengthens and builds domestic AI capabilities. The 

U.S. Tech Corps: A new initiative of the Peace Corps, the U.S. Tech Corps will provide volunteer technical talent with import partners to provide last-mile support in deploying powerful AI applications for enhanced public services. 

New International Financing: The Treasury Department is launching a new fund at the World Bank to help countries overcome AI adoption barriers, in addition to new financing programs launched at the Export-Import Bank, the U.S. International Development Finance Corporation, the State Department, and the Small Business Administration. 

NIST/CAISI’s AI Agent Standards Initiative: The Commerce Department’s National Institute of Standards and Technology (NIST) announced it will facilitate the development of interoperable and secure standards for agentic AI, giving the public confidence in this next-generation technology.

As the Trump Administration unveils a whole-of-government strategy to promote American AI exports, it brings to the India AI Impact Summit a clear message: American AI is the gold standard, and we are sharing it with our partners to secure our shared future.

Ukraine Spoils Being Carved Up by Investors

Red Team Rep. Mike McCaul told This Week with George Stephanopolous yesterday on the topic of a Russia-Ukraine peace deal:

The inception of this agreement seems to have come from a Witkoff discussion with the Russian Dmitriev, who heads up the Russian Sovereign Wealth Fund.

Steve Witcoff is the investor playing dipolmat from the U.S. side.  He has The Witcoff Group and co-founded World Liberty Financial with Trump II.

The National Wealth Fund of Russia is essentially a state owned private equity underwriter (PEU).  

Ukraine is a take over target, people, land, resources, etc...

The people behind the peace deal are investors carving up Ukrainian prizes (the spoils of war).  

The American worker experienced this as private equity took over company after company, traumatized workers and customers, loaded firms down with debt, siphoned fees and special dividends and enjoyed tax advantages all along the way.  

It helps to have influential friend in high places.

That's how PEUs became "policy making billionaires," paving the way for the first TechGod trillionaire.

Trump II pushed the PEU playbook on federal workers via DOGE, which he just officially ended.  It's still there just buried within several different government departments.

Politicians Red & Blue love PEU and their new TechGod/Cryptobro brethren.  Increasingly, more are one.

Note:  This was published yesterday on Ari'sFreedomSwitch, my political blog.  Increasingly, any number of stories, local, national, international, sports, civil rights, business, political, etc. have a PEU odor.  It's off just below the surface if one scratches.  

Update 11-26-25:  General Kellogg told Fox News that Jared Kushner is involved in the Russia-Ukraine peace deal.  Jared's Affinity Partners is a PEU that invests Saudi SWF money, at least $2 billion of it.

Bloomberg reported that Steve Witcoff advised Russia on how to sell the peace deal to Trump II.

Russia's SWF Chief Dmitriev told Axios he spent three days in Miami from Oct. 24-27.

Russia's TASS reported on the meeting before it happened.

Update 11-28-25:  Another story on the Russian SWF germination of the current peace piece deal.

Carlyle's Chinese Affiliate to Takeover Crown Bioscience

Reflective of the current economic boom cited by Trump II, JSR LifeSciences is taking a 50% haircut on a company it bought in 2017 for $400 million.  It will sell Crown Bioscience to a Chinese clinical research organization owned by The Carlyle Group, a politically connected private equity underwriter (PEU).   The total price is $204 million spread over a two year period.

JSR Life Sciences LLC ("JSR Life Sciences"), a global leader in life sciences materials and services, today announced it has entered into a definitive agreement to transfer Crown Bioscience Inc. ("Crown Bioscience") to Adicon Holdings Limited ("Adicon"), a premier independent clinical laboratory provider in China and a portfolio company of The Carlyle Group. The transaction, subject to customary closing conditions, is expected to close in 2026.

I think they call that an implosion which can also make a kaboom sound.  Crown Biosciences global headquarters is in San Diego, California.  

Acquirer Adicon's website says this about the company:

Adicon has three major service platforms: a research and development center, clinical drug testing, and testing services. The testing services platform includes clinical laboratories, pathology laboratories, reproductive genetics laboratories, gene laboratories, and mass spectrometry laboratories, holding over 200 patents and providing over 4,000 testing items.

Carlyle invested in Adicon in 2018,  Have they written down half the value of their clinical company like JSR did with Crown? 

The greater question is whether Trump II will allow a U.S. headquartered clinical research company to be taken over by a Chinese firm, even one owned by a D.C. based PEU.

Glenn Youngkin was co-CEO of Carlyle in 2018 when they invested in Adicon.  Carlyle's press release stated in October 2018:

As one of the first and most active international private equity investors in China, Carlyle has adopted a local approach towards investments in China for two decades. Carlyle has invested more than US$8 billion of equity in nearly 100 private equity transactions across China through its US dollar and RMB investment vehicles as of June 30, 2018.

Youngkin ran away from his record of exporting U.S. jobs to China as a candidate for Virginia Governor in 2021.  His general un-likability has not worsened from his China moves while a Carlyle top dog (they've remained hidden).

Carlyle had the magic touch in the past in regard to getting controversial deals approved.  Flashback to 2007 when the U.S. had an uproar over Dubai Ports World buying six port operations.  Months later Carlyle sold  Landmark Aviation and Standard Aero with fifty U.S. airport operations to Dubai Aerospace.  That's what happens when you are close with the President.

I'll wager they can do it again.  Remember politicians Red & Blue love PEU....

Another TechGod 401(k) Dangle: 4X Leverage

Noted investor Jim Chanos sniffed out another one.  

Welcome to "the first and only 401(k) platform that allows participants to finance assets and access alternative investments."  

It's called Basic Capital and it's brought to you by TechGods.

In the small print at the bottom of Basic Capital's website it says "Basic Capital is not a bank" and that funds will be advised by Basic Capital Advisors, LLC.

A New York state regulatory filing shows the firm had one employee as of January 2025.  A brochure filing for the same period indicated:

Mr. Al-Asaad is the President, CEO and Chief Compliance Officer for Basic Capital Advisors LLC

One filing also covered three entities: Basic Capital Advisors, StormSafe, Inc. and StormSafe Asset Management.

Basic Capital's website has a FAQ section which contained the information below (as of 11-22-25):

Good news 401(k) holders, Basic Capital will not go after your non-401(k) assets, like your house or your car, should your account value be less than the amount owed..  

Financing long term assets with short term money becomes extremely problematic when the big money boys no longer trust each other to make good on their debts.  Think Fall 2008.

Also, look at the pittance of a gain they are implying is yours, a couple hundred basis points.  Basic Capital takes the lion's share of any gains in a market simply holding its own.  Your 401(k) needs to earn over 7% in perpetuity and the SOFR needs to be stable at 6.5%  for the borrowed money to work on your behalf.

Basic Capital talks about "underlying bond investments" as a floor and "you are earning more than you owe."  

There too much imprecision and sales language for me to understand what is really being offered.  Fintechs have a way of doing that.

If the market is gangbusters and interest rates go down levered 401(k) investing could be a boon.  That's the promise from Trump II's economic team, but their boss lies and forces people below him to lie.

Leverage is a knife that cuts both ways.  When markets are going up it cuts thin slices of roast beef for you to enjoy.  When markets take a beating, leverage can lop off a limb or worse, especially in the alternative asset area.

Avoid leveraged lending in your 401(k) plan unless you are OK with the possibility that the very moment you need your retirement money, it might not be there.  Do not fall for the Basic Capital sales pitch.  You can go underwater in a 401(k) loan just as you can in a mortgage or an auto loan.  

Invest as much as you can comfortably based on your income in your 401(k) and avoid alternatives (private equity, private credit) as well as crypto.  

When fintech Synapse failed, TechGods who'd marketed it as a FDIC bank, walked away from its stinking corpse.  That's the level of commitment TechGods have to their affiliate's customers.  

They have a hurdle rate to hit and if Basic Capital does not make, TechGods can turn off the lights on your retirement party.  Do not give them that power.  

Update:  Blackstone Group added a division focused on defined contribution benefit plans.  PlanSponsor reported: 

... the unit will focus on strategic partnerships, a lineup of perpetual products, investor education and scale strategies across private equity, real estate, private credit and private infrastructure. 

Heather Von Zuben was previously Blackstone Credit & Insurance’s global head of perpetual capital solutions. She joined Blackstone in 2022 after 15 years at Goldman Sachs, where her leadership roles included global head of wealth management alternatives. 

Tom Nides joined Blackstone in 2024 after serving as U.S. ambassador to Israel from 2021 through 2023. He also held various roles at Morgan Stanley, including chief operating officer and vice chairman. 

Paul Quinlan was most recently global chief financial officer of Blackstone Real Estate. Prior to joining Blackstone in 2010, he worked at Bank of America Merrill Lynch.'

Blackstone is a private equity underwriter (PEU) headed by Stephen Schwarzman, who recently attended the Black-Tie White House dinner for Crown Prince Mohammed bin Salman.

Basic Capital will determine if Blackstone's new 401(k) offerings qualify for leverage finance.  

Federal Government is Watching You Drive

Drivers be aware that the U.S. government has a mass surveillance program running 24/7/365 on American roads.  The AP reported:  

Customs & Border Patrol has in the past had access to data from at least three private sector vendors: Rekor (now Altumint), Vigilant Solutions (bought by Motorola) and Flock Safety.

Flashback to 2013 when courts heard legal challenges regarding the NSA scooping us massive information on phone records.  A judge stated:

“I cannot imagine a more ‘indiscriminate’ and ‘arbitrary invasion’ than this systematic and high-tech collection and retention of personal data on virtually every single citizen for purposes of querying and analyzing it without prior judicial approval. Surely, such a program infringes on ‘that degree of privacy’ that the founders enshrined in the Fourth Amendment. Indeed, I have little doubt that the author of our Constitution, James Madison… would be aghast.”

Some people consider their car an extension of their house, while an increasing number have to live in their car.

It should be no surprise that the three private sector vendors (cited by the AP) in the mass road surveillance operation are private equity underwriter (PEU owned) or have PEU backgrounds.

Rekor sold its automated traffic safety enforcement division to Alumint, an affiliate of Capital Meridian Partners in December 2022.  Capital Meridian is a D.C. based PEU that specializes in tapping government budgets.  

Corsa Ventures and Morgan Stanley Expansion Capital sold Vigilant Solutions to Motorola.  

Flock Safety recently held its "Series F" capital raise and TechGods once again poured into the round.

Peter Thiel's Founders Fund joined Al Gore's Kleiner Perkins in hopes for huge profits from spying on citizens.  

Politicians Red & Blue love PEU and their new TechGod/CryptoBro brethren.  Increasingly, more are one.  Together they are facilitating the decimation of U.S. citizens' constitutional rights, the social media harm of children and the deterioration of human intelligence and real relationships via garbage AI.  

You too can have your rights violated by the same TechGods dangling an assortment of addictive digital ventures intended to sell ads or separate you from your hard earned money.  Repeat the TechGod mantra after me, Code is law....Code is law....Code is law....

By the 10th recitation the Bill of Rights is gone, the 27th cancels all Constitutional Amendments...

This is what the government of the PEU/TechGod/CryptoBro, by the PEU/TechGod/CryptoBro and for the PEU/TechGod/Cryptobro has determined.  They have all the power, money and rights.

Update:  Time reported on a lawsuit against Meta (Facebook).  The lawsuit states:

".... Meta was aware that millions of adult strangers were contacting minors on its sites; that its products exacerbated mental health issues in teens; and that content related to eating disorders, suicide, and child sexual abuse was frequently detected, yet rarely removed. According to the brief, the company failed to disclose these harms to the public or to Congress, and refused to implement safety fixes that could have protected young users."

The Guardian ran a story on AI workers telling their family and friends to stay away from AI. 

"...after becoming aware of the way chatbots and image generators function and just how wrong their output can be, they have begun urging their friends and family not to use generative AI at all – or at least trying to educate their loved ones on using it cautiously. These trainers work on a range of AI models – Google’s Gemini, Elon Musk’s Grok, other popular models, and several smaller or lesser-known bots."

The article noted one rater:

"has forbidden her 10-year-old daughter from using chatbots. “She has to learn critical thinking skills first or she won’t be able to tell if the output is any good.”

AI's emphasis on speed over accuracy and quality is a random walk from the confines of earth (with water, food and oxygen) into the void of space.  You'll be somewhere without the tools and resources needed for life.

“We joke that [chatbots] would be great if we could get them to stop lying.”

Made in the image of their TechGod masters...

Update 11-24-25:  Rekor plans to create a new division that detects deepfake AI videos.  The company will use its background in verifying traffice video to develop their new product.

Update 11-26-25:  Naked Capitalism did a story on Flock surveillance camera vulnerabilities.  It appears there are many.