Carney's $25B Bet, Ai Culture, and the Future of Canada’s Relationship With the USA

By 2027, Bernie Sanders and his cabal of pessimists are going to be in the streets protesting AI. Blaming it for everything…That's the political tape we're walking into.The reason isn't ideology. It's economics. We are watching the most consequential technology transition since the industrial revolution play out in real time, and the early returns look exactly like the early returns of the last one: capital is winning, productivity is exploding, and the wages of the people doing the displaced work are flat to down.The week the catalysts all printed in one directionBefore we get to the politics, let’s grade the tape, because the tape is what makes the rest of the argument unavoidable.TSMC’s Q1 2026 call was the cleanest piece of corporate communication I’ve read this quarter. They raised full-year 2026 revenue guidance to better than 30% year-over-year. Gross margin printed a new high of 66.2% — well above the 56%+ long-term guide. Capex is now tracking the high end of the $52–56 billion range, and management said explicitly that revenue growth will outpace capex growth. That’s a margin-expansion story sitting on top of a unit-volume story. They almost never travel together. They are travelling together right now.ASML revised 2026 revenue up to €36–40 billion (from €34–39 billion) and flagged an EUV supply shortage in 2027. Anthropic’s annualized revenue went from over $9 billion at the end of 2025 to over $30 billion by April 2026. That’s a tripling of ARR in three months. I have spent enough time around early-stage capex cycles to know what they look like, and that is what they look like.The single most important sentence said on a corporate call this quarter came from TSMC CEO C.C. Wei. I’m going to put it here in full because if you only remember one thing from this newsletter, it should be this:“The shift from generative AI and the query mode to agentic AI and command and action mode is leading to another step-up in the amount of tokens being consumed.”Read it twice. Generative AI was a query layer — a person typing a prompt and reading an answer. Agentic AI is a labor layer — a system doing the work end-to-end. The token math compounds, it doesn’t add. And the entity that consumes those tokens isn’t a curious knowledge worker on a free tier. It’s the workflow that used to belong to that worker.The mix shift inside TSMC tells the same story without the press release language. In the fourth quarter of 2019, high-performance computing was 29% of TSMC’s revenue and smartphones were 53%. Today HPC is 61% and smartphones are 26%. The positions have completely flipped in five years. Advanced nodes — 7nm or below, where TSMC is a de facto monopoly — are now roughly three-quarters of revenue.I keep coming back to this: 2026 revenue estimates for TSMC are up roughly 25% since September 2025, and the stock is up roughly 60% over that window. That’s a multiple holding while estimates run up. That is the signature of the market pricing more upside, not less. The bubble signal would be one of MSFT, GOOG, META, or AMZN guiding capex down on this week’s prints.UPDATE; All 4 hyperscalers beat and guided up last night.The Canadian canary nobody is talking aboutIf you want a concrete data point that this is no longer a Silicon Valley story, look at Rogers. Last week Rogers Communications cut its 2026 capex plan by roughly 30%, from up-to-$3.5 billion down to $2.5–2.7 billion, and offered voluntary departure packages to about 10,000 employees. That is not a hyperscaler. That is a regulated Canadian incumbent. If a slow-growth telecom is willing to take a 30% capex axe and put 10,000 buyout offers on the table, the cultural permission to use AI to compress headcount is no longer a coastal phenomenon. It’s a TSX-60 phenomenon.The signal isn’t Rogers specifically. The signal is the speed of cultural adoption. Six months ago, a Canadian incumbent doing this would be a one-off. Today it reads as a template. I am watching BCE and Telus closely for the next two prints, and I am watching the Big Six banks even more closely. The first big bank to publicly acknowledge it is the one to own as a stock and to fear as an employee.What I think happens nextI want to be clear that I am not a doomer. I am see justification in the AI capex thesis, and can already see the productivity gains that come with it. The world ends up richer on the other side of this. That has been true of every previous technology transition, and there is no reason to think it won’t be true here.But the transition is the part that’s going to be politically and culturally disorienting. Productivity gains and wage compression can — and during Engels’ Pause, did — coexist for decades. The political response to “the country is much richer in aggregate but my paycheck is flat and my kid can’t get an entry-level analyst job” is not going to be measured. It is going to be Bernie Sanders in the streets, and it is going to be sooner than people think. The 2027 timing isn’t a guess pulled out of the air. It’s the lag I’d expect between visible displacement and the political reaction to it. Productivity is already ticking up. Layoff announcements are already climbing. Entry-level wage growth has already stalled. That is the smoke. The fire is the next two years.The picks-and-shovels remains the story. The foundation models are accelerating and monetizing. The AI-power complements are becoming more cemented, because the agentic layer is, at the end of the day, an electricity load. And budget for political volatility - because in a world where capital is winning this hard, this fast, the politics catch up. They always do.Podcast & YouTube Recommendations🎙* Dwarkesh and Reiner Pope Teach Us Ai:* Kill Them With Kindness:Best Links of The Week🔮* Labour productivity in non-conventional oil extraction is nearly $580 per hour; approximately ten times the rest of the economy Trevor Tombe, University of Calgary* According to a December 2025 C.D. Howe Institute study, just ONE natural resources project has been approved under the new federal Impact Assessment Act* saw this new interview with Ben Uyeda on About Art. Ben is an architect-turned multidisciplinary maker/artist/hotelier. He created Reset Hotel, where we stayed in Joshua Tree recently, and I got to spend a little time with him while we were there. A quote really stood out to me:“The difference between creativity and taste. The culture we’re in right now is mistaking having great taste for being creative. People are mistaking consumption with production, and I think creativity is always about production.“It’s second nature for me to curate lots of great design ideas and products at this point. It’s what I constantly do online.It’s much, much harder, and probably much more valuable, to build great things.* Rogers Communications Inc. is offering voluntary departure packages to about 10,000 employees in its workforce as the telecom giant moves to cut costs amid slowing industry growth. - BNN* Engles Pause and Employment - Fabricated Knowledge This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit reformedmillennials.substack.com