---
description: The investment framework works by treating attractor states as informed priors on industry destinations then updating conviction as evidence accumulates -- longer time horizons produce tighter posteriors which is why the approach outperforms over decades
type: claim
domain: teleological-economics
created: 2026-02-28
confidence: likely
source: "Synthesis from Architectural Investing book and vault attractor dynamics research. Enriched by Rio (Aschenbrenner extraction) with live case study: SA LP Q4 2025 portfolio pivot as real-time Bayesian update."
tradition: "Teleological Investing, Bayesian epistemology, complexity economics"
---

# teleological investing is Bayesian reasoning applied to technology streams because attractor state analysis provides the prior and market evidence updates the posterior

The core intellectual move of teleological investing is Bayesian. Start with a prior: where must this industry converge given the invariant constraints of human needs and available technology? Then update that prior as evidence accumulates -- new technologies, regulatory shifts, market signals, incumbent behavior. The attractor state is not a prediction in the forecasting sense. It is a prior probability distribution over possible industry configurations, weighted by need-satisfaction efficiency.

This framing clarifies why the approach works better over longer time horizons. [[humans are intuitive near-optimal Bayesian reasoners whose predictions match the Bayes-optimal rule for each distribution type]] -- but the quality of Bayesian reasoning depends entirely on the quality of the prior. Short-horizon prediction uses thin priors (recent earnings, market sentiment, momentum) that degrade quickly. Teleological investing uses thick priors derived from human needs, which [[human needs are finite universal and stable across millennia making them the invariant constraints from which industry attractor states can be derived]]. Needs change on evolutionary timescales. Industries change on decades. The prior is more stable than the noise, so the posterior tightens with more evidence rather than drifting.

The Bayesian frame also explains the framework's relationship to uncertainty. Classical investing tries to eliminate uncertainty -- build better models, get more data, reduce the error bars. Teleological investing accepts uncertainty about the *path* while maintaining conviction about the *destination*. [[the shape of the prior distribution determines the prediction rule and getting the prior wrong produces worse predictions than having less data with the right prior]] -- having the right structural prior (needs-based attractor) matters more than having granular data about quarterly earnings. This is why the book's core thought experiment works: imagining how a superintelligence would allocate resources is a way of constructing the right prior, not a way of predicting the future.

The updating mechanism has a specific structure. Evidence that confirms the attractor direction (technology maturation, regulatory tailwinds, incumbent proxy inertia) increases conviction and position size. Evidence against (technology proving infeasible, needs shifting, alternative architectures emerging) decreases conviction. [[proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures]] -- proxy inertia is Bayesian evidence: when incumbents protect current profits instead of pursuing the attractor, it confirms the prior because it means the market is not yet pricing in the convergence.

**Live case study: Aschenbrenner's Q4 2025 portfolio pivot.** Situational Awareness LP ($5.52B, founded Sept 2024) underwent a dramatic rotation in Q4 2025: exiting Nvidia and Broadcom (consensus AI chip plays) and concentrating into physical infrastructure — Bloom Energy (+$911M, largest holding), CoreWeave call options (+$651M, 672% increase), Core Scientific (9.4% stake), and Bitcoin miners pivoting to AI hosting. The prior (AI infrastructure buildout is near-inevitable) stayed constant. The posterior updated: the binding constraint shifted from compute chips to electricity and physical hosting. This is Bayesian updating in action — the thesis direction didn't change, but the specific bottleneck position did as evidence accumulated. The contrarian element sharpens this: while the market piled into chip stocks, Aschenbrenner shorted Nvidia and Broadcom via puts while going long on power infrastructure. Since [[value in industry transitions accrues to bottleneck positions in the emerging architecture not to pioneers or to the largest incumbents]], this pivot demonstrates real-time bottleneck identification — the kind of posterior update the Bayesian framework demands. Whether the update proves correct is TBD. (Source: SEC 13F filings Q4 2025.)

The critical danger is getting the prior wrong. [[industry transitions produce speculative overshoot because correct identification of the attractor state attracts capital faster than the knowledge embodiment lag can absorb it]] -- even with the right attractor, capital can arrive too early. Bayesian discipline means sizing positions proportionally to posterior confidence, not the strength of conviction about direction. You can be highly confident about where the industry goes while remaining uncertain about when, and the position sizing should reflect that distinction.

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Relevant Notes:
- [[teleological investing answers three questions in sequence -- where must the industry go and where in the stack will value concentrate and who will control that position]] -- the three-question framework is the structured protocol for constructing and updating the prior
- [[attractor states provide gravitational reference points for capital allocation during structural industry change]] -- attractor states are the priors; this note provides the gravitational metaphor
- [[industries are need-satisfaction systems and the attractor state is the configuration that most efficiently satisfies underlying human needs given available technology]] -- needs-based derivation is what makes the prior stable enough for Bayesian updating to work
- [[humans are intuitive near-optimal Bayesian reasoners whose predictions match the Bayes-optimal rule for each distribution type]] -- humans are natively equipped for this kind of reasoning when given the right prior
- [[the shape of the prior distribution determines the prediction rule and getting the prior wrong produces worse predictions than having less data with the right prior]] -- the prior matters more than the data, which is why needs-based attractor analysis outperforms data-heavy quantitative approaches over long horizons
- [[proxy inertia is the most reliable predictor of incumbent failure because current profitability rationally discourages pursuit of viable futures]] -- proxy inertia is Bayesian evidence confirming the attractor prior
- [[industry transitions produce speculative overshoot because correct identification of the attractor state attracts capital faster than the knowledge embodiment lag can absorb it]] -- the timing problem: right prior, wrong update frequency
- [[teleological investing is structurally contrarian because most market participants are local optimizers whose short time horizons systematically undervalue long-horizon convergence plays]] -- the contrarian alpha emerges from the Bayesian framework because most participants use thin, short-horizon priors
- [[knowledge embodiment lag means technology is available decades before organizations learn to use it optimally creating a productivity paradox]] -- the lag between technology availability and organizational readiness is a key variable in the updating process

Topics:
- [[attractor dynamics]]
- [[market dynamics]]