What This Week Revealed About Power

What It Covers

Three converging forces reshape power in May 2025: AI eliminates middle management layers at Coinbase, PayPal, and Block; cognitive decline accelerates as AI replaces writing; and China gains leverage over the US at the Trump-Xi summit.

Key Questions Answered

• •AI Workforce Restructuring: Coinbase cut 14% of staff, PayPal plans 20% workforce reduction over two to three years, and Block eliminated 40% of employees in February. Jack Dorsey explicitly targets permanent middle management elimination, not just efficiency gains through AI copilots.
• •AI Cognitive Trade-off: A BCG study of 758 consultants found AI users completed tasks 12% faster with 40% higher quality on suitable tasks, but performed 19 percentage points worse on judgment-heavy tasks requiring contextual reasoning. Who does the thinking determines the outcome.
• •Reading Decline Data: Stanford's Educational Opportunity Project data shows students in one in three US school districts read a full grade level below 2015 peers. The decline crosses all socioeconomic, racial, and geographic lines, correlating with reduced sustained cognitive engagement.
• •China's Geopolitical Leverage: China restricted exports of critical minerals used in US weapons and tech manufacturing, forcing US tariffs down from 145% to 47.5%. Simultaneously, China purchases discounted Iranian oil while the Iran conflict has suppressed US stock values by approximately 5-6%.