Fable in Shackles

This post was originally posted my Substack. I can be reached on Linked In and X.Two weeks ago, Anthropic released Fable 5, the public-facing version of Mythos 5. For context, Mythos was hailed as the most capable model the company had shipped to date, with a step-change in its cyber capabilities. Days later, access was restricted after Amazon researchers showed that Fable could be jailbroken into producing information useful for cyberattacks. This ban barred all foreign nationals, including Anthropic's own non-US employees, from using Fable/Mythos. Anthropic, rather than separating US from non-US users, disabled both models for everyone as of writing.There’s already plenty of public discourse about this ban. For investors, the more important point is that hosted frontier intelligence is now subject to state action, not just vendor policy. In this piece, I argue that just as compute and energy have defined the current AI trade, “intelligence sovereignty” (control of one’s own AI stack) will be one of the next investable themes. I’ll go through some of ramifications and investment opportunities below.Model access becomes an intelligence sovereignty issueUntil recently, customers could treat American AI the way they treated AWS or Windows: stable infrastructure that they could build their businesses upon. That trust rested partly on the perceived stability of US policy. Fable proved that assumption wrong. Access to intelligence can be pulled with little notice. Even if Fable is re-released, customers will conclude that they can no longer solely depend on one country’s AI offerings.Strategic customers outside the US, including some US allies, will likely seek to reduce their dependence on American intelligence. There is precedent for this. China, for example, has embarked on a multi-year initiative to migrate off US technology. This is a headwind for US frontier labs. While American labs may still win high-end workloads, the assumption that they will be the default inte