Hundreds of billions of dollars are flowing into AI data centers right now, and Paolo Ardoino, CEO of Tether - the company behind the world's most widely used stablecoin with 573 million users - thinks that investment is going to age very badly. In this episode, he joins Craig Smith to explain QVAC, Tether's open-source platform for running AI on smartphones, laptops, and edge devices, and to make a case that within five years, 90% of what ordinary people use AI for will run entirely on consumer hardware, without touching a data center. The evidence is already there: Tether's team built a 4-billion-parameter medical AI model that outperforms Google's 27-billion-parameter MedGemma, running on a good smartphone, and a 1.7-billion-parameter version that runs on the average $80 smartphone available in Africa.

The deeper argument in this conversation is philosophical as much as technical. Ardoino applies the same disintermediation logic that made sending dollars to the world's unbanked free - zero transaction fees, revenue from treasury bill interest - to AI: "not your AI, not your intelligence." If you don't control how your AI runs and your data never leaves your device, the AI is genuinely yours. If it does, someone else is getting smarter with your information. He also makes a pointed economic argument: the AI companies currently charging $200 for subscriptions that cost $1,000 to $5,000 to deliver are subsidizing growth while private, and when they go public, retail investors will absorb the gap. His prescription isn't to stop building, it's to build differently, toward millions of small interacting models rather than trillion-parameter monoliths, toward devices that think locally rather than systems that route everything through Ireland and back.

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