THE NUMBER: 23% — what Block’s stock did after Jack Dorsey fired 4,000 people and told the market AI made them unnecessary.
Peter Thiel predicted this. In his conversation with Tyler Cowen, he argued AI would be “much worse for the math people than the word people.” His logic: if a model can solve every US Math Olympiad problem, what happens to the knowledge workers whose entire value proposition is quantitative precision? Chess players thought chess ability was the ultimate measure of intelligence. Then Deep Blue made it irrelevant in an afternoon.
Block just ran the experiment at scale. Dorsey cut 40% of the company, pointed to an internal AI tool called Goose that increased developer velocity by 40% since September, raised full-year guidance to $3.66 adjusted EPS (consensus was $3.22), and watched the stock rip after hours. His message to other CEOs was barely coded: “Within a year, most companies will arrive at the same place.”
We’ve seen this movie before. In the late ’90s, CEOs discovered they could announce an “internet strategy” and watch their stock pop 15% the next morning. Some strategies were real. Most weren’t. The market rewarded the announcement regardless, and that incentive structure guaranteed copycats. AI-enabled layoffs are becoming the 2026 version of slapping “.com” on your investor deck.
The difference this time is the tools actually work. The same week Dorsey swung the axe, Perplexity launched Computer (a $200/month agent that orchestrates 19 AI models across 400+ apps), Anthropic expanded Cowork into 10 enterprise departments, Google shipped Gemini Agent on Android, and Samsung gave Perplexity system-level OS access on the Galaxy S26. Five agentic products from five companies in seven days. The weapons that justified Dorsey’s cuts are now available to every company at every price point.
And while CEOs figure out how many humans they still need, the Pentagon gave Anthropic until 5:01 p.m. today to drop Claude’s safety guardrails or face blacklisting under the Defense Production Act. The same technology replacing your workforce is being handed to your government. A King’s College London study found these models choose nuclear weapons in 95% of wargame simulations and surrender 0% of the time. Comforting.
Show me the incentives, show me the behavior. Dorsey showed the incentive. Every CEO in America is doing the math tonight.
On the site today: The full analysis, including the Thiel prediction, the Block playbook, and why the Pentagon’s AI deadline matters for every allocator → getcoai.com