The Era of Risk-Maxxing

"The FT does this lighthearted thing every year where we have a stock-picking competition. And in my list of shorts, I put MicroStrategy. And I got annihilated. And what I want to do is understand what it is that I'm missing here."

Finance writer Katie Martin's admission during her Financial Times interview with MicroStrategy CEO Michael Saylor captures something essential about our moment. What she was missing wasn't just his company's mad, mad, mad Bitcoin strategy—it was that Saylor's strategy is an example of an emergent risk paradigm. The old rules of prudent risk management are being systematically abandoned by the people with the most power to shape our world. Martin was judging a new kind of bet using "old" metrics of risk management.

This isn't about a few reckless actors on the fringe. Saylor didn't invent this approach—it's been increasingly part of crypto culture and adjacent ideological spaces. Extreme risk-taking has gone mainstream, becoming the ascendant strategy across politics, technology, finance, and geopolitics. We're witnessing the emergence of what I've started calling "risk-maxxing"—the strategic abandonment of safety mechanisms to gain competitive advantage through deliberately maximalist contrarian strategies.

Defining Risk-Maxxing

Traditional risk management operated on principles of prudence: diversification for safety, hedging against downside, stress-testing before deployment. Risk-maxxing inverts these assumptions. Where conventional wisdom says "diversify for safety," the risk-maxxers' playbook says "concentration equals alpha." Where institutions once built consensus through careful deliberation, the new risk-maxxers create facts on the ground and dare others to respond. Increasingly, likeminded followers do, spreading the risk.

Risk-maxxing isn't just about taking big risks. It's about weaponizing uncertainty as a competitive tool. It involves conscious rejection of cautious, incrementalist strategies, deliberate institutional stress-testing to discover breaking points, and the creation of hyperaggressive positions that force others to adapt to your reality. And risk-maxxing's defiance of norms means cleaning up the mess becomes someone else's problem after you've moved on, or destroyed markets, systems or countries in the process.

The distinction matters because risk-maxxing represents a fundamental shift in how power operates. Traditional risk management sought to minimize downside while capturing upside. Risk-maxxing seeks to maximize upside by making downside someone else's problem. And it isn't just happening in finance, though the impacts may be most obvious there. Risk-maxxing is happening in geopolitical and economic strategy, climate, technology, and even in social movements and culture more broadly.

The New Rules of Engagement

Risk-maxxers operate by a different playbook entirely:

Deploy While Others Pilot: In many ways, risk-maxxing is an evolution of "always in beta" and "move fast and break things" strategies that are as old as the Web. While competitors run field trials and stress-tests, risk-maxxers launch their strategies head-first. Tesla deployed its "Full Self-Driving" beta in 2020, while traditional automakers conducted limited trials, despite deaths connected to partial self-driving capabilities made available from 2015 onward. The risk wasn't (and isn't) really fully managed—it was and is externalized to users and society, while the gain accrued to the first mover, serial risk-maxxer Elon Musk.

Mobilize Narrow Bases While Others Build Coalitions: Rather than seeking broad consensus, risk-maxxers focus on intense, motivated, focused support bases—ride or die. Political movements bypass traditional party structures. Crypto projects launch with hardcore degen armies rather than institutional backing. The strategy prioritizes commitment intensity over breadth, outsider status over being connected to the system.

Create Facts on the Ground While Others Debate: Risk-maxxers act first and seek permission later—if at all. They understand that establishing new realities is more powerful than winning arguments. Once MicroStrategy put billions of dollars in Bitcoin on its balance sheet, the debate about corporate crypto adoption became secondary to managing the consequences. The rest has been about tripling down on this "reality creation".

Test Institutional Boundaries Systematically: Political norms aren't violated accidentally but strategically, to map enforcement limits. Regulatory frameworks are pushed well beyond design parameters to find gaps. Social contracts are stretched to identify which parts actually matter versus which are merely quaint conventionality. This institutional stress-testing reveals breaking points that can be exploited for competitive advantage. The current US adminstration, some of its allies and adversaries, increasingly operate by daring enforcement of laws, norms and treaties, and finding these seriously wanting.

The Evidence: Risk-Maxxing Across Domains

The examples span every major system that governs modern life:

Political Risk-Maxxing: Putin's invasion of Ukraine represents perhaps the clearest case—betting Russia's economic future and international standing on rapid territorial acquisition rather than accepting gradual decline. So far, outlasting the opposition has yielded some payoff. Trump's approach to tariffs deliberately abandoned economic expertise for maximum disruption, choosing immediate confrontation over incremental trade negotiations.

Economic Risk-Maxxing: Beyond individual strategies like MicroStrategy's Bitcoin concentration, we're seeing the development of parallel economic systems that systematically degrade formal channels. Cryptocurrency markets don't just offer alternatives to traditional finance—they extract value while building infrastructure designed to make regulated systems obsolete. The strategy isn't competition but parasitic undermining of existing institutional frameworks. Now, rather than working to insulate financial systems from risks from stablecoins, for example a major economy has been wired to them.

Technological Risk-Maxxing: AI companies are racing toward artificial general intelligence with minimal safety testing, prioritizing speed over precaution. This has sparked a competitive stampede that is putting massive amounts of capital, environmental resources and political and economic strategies at risk. This comes on top of actively and openly flouting copyright laws repeatedly to train AI models in the name of unspecified future gains. Starlink (Musk again) pursued a saturation strategy with satellite launches, ignoring both legal complaints from competitors (naturally) but also safety complaints from experts worried about the escalating risk to others from "flooding the zone with sats".

Environmental Risk-Maxxing: Geoengineering experiments propose intentional manipulation of global climate systems based on limited testing, with some proponents pushing ahead without regulatory scrutiny, having unilaterally decided that international climate agreements won't be sufficient. Already, small startups are pushing boundaries to release small amounts of aerosols into the atmosphere, despite bans.

Why Now? The Drivers of Risk-Maxxing

Several forces have converged to make risk-maxxing not just possible but optimal:

Moral Hazard at Scale: Decades of bailouts taught elites that extreme bets often get rescued. Too-big-to-fail has become too-fast-to-regulate. When downside gets socialized but upside remains private, rational actors maximize exposure. The 2008 financial crisis, COVID business support, and central bank interventions created expectations that someone would backstop you.

Temporal Compression Psychology: Everything feels like endgame. Climate collapse, AI singularity, geopolitical realignment—the future feels compressed into a narrow window. Leaders across domains act as if this is their last chance. When you believe you're living in history's endgame, moderation seems pointless and extreme action feels rational.

Centralized Decision-Making Power: Democratic guardrails have weakened while individual power has concentrated. Charismatic founders and authoritarian leaders make irreversible decisions that reflect personal vision rather than institutional deliberation. When single individuals control civilization-scale technologies or nation-state resources, their risk tolerance becomes everyone's risk exposure.

Winner-Take-All Economics: The rewards for winning have become astronomical—market dominance, ideological hegemony, historical significance. Meanwhile, losers are often cushioned by social safety nets or golden parachutes. When winning means everything and losing means little, rational actors maximize their shot at winning regardless of systemic consequences.

Narrative Construction Capabilities: Risk-maxxers excel at reframing dangerous activities as necessary, innovative, or morally imperative. This provides psychological justification for extreme positions while recruiting supporters through moral urgency claims. The ability to construct compelling alternative frameworks lets actors dismiss traditional risk metrics as outdated or corrupted.

What Makes This Historically New

While extreme risk-taking isn't new, risk-maxxing as a systematic approach represents a genuinely novel historical phenomenon. Previous eras had individual risk-takers or domain-specific extremism, but never simultaneous, technologically amplified risk-maxxing with externalized consequences.

The convergence is unprecedented: individual decisions can now have species-level consequences through nuclear, AI, and climate technologies. Multiple actors can simultaneously stress-test global systems across finance, politics, and technology. Most importantly, democratic institutions themselves become vehicles for risk-maxxing through systematic exploitation of institutional complexity and norms.

Unlike historical autocrats who had to choose between local safety and global impact, modern risk-maxxers can trigger global effects while operating under local jurisdictions. The moral hazard operates at civilizational scale—someone else will bear the costs of failure. This creates systemic fragility that has no adequate historical precedent for institutional response.

The Feedback Loop: How Risk-Maxxing Becomes Normal

What makes this particularly dangerous is how risk-maxxing becomes self-reinforcing:

Success Breeds Imitation: When risk-maxxers achieve visible wins, others adopt similar strategies to remain competitive. If one company gains market share through aggressive deployment, competitors must match or exceed that aggression. Political movements that succeed through norm-breaking teach others that norms are constraints, not guideposts.

Institutional Learning: Organizations adapt to reward risk-taking over risk management. Venture capital celebrates bold bets over steady returns. Political parties prioritize candidates who can mobilize intense bases over those who build consensus. Media rewards extremity with attention, making moderation professionally disadvantageous.

Normalization of Extreme Positions: What seemed reckless yesterday becomes today's baseline. Political rhetoric that would have ended careers decades ago now launches them. Business strategies that would have triggered regulatory intervention now get celebrated as innovation. Environmental policies that would have been seen as planetary recklessness now get serious consideration.

Competitive Pressure: As risk-maxxing spreads, refusing to adopt similar strategies becomes a competitive disadvantage. Organizations that maintain traditional risk management practices get outcompeted by those willing to externalize risks. This creates a race to the bottom where everyone must adopt maximum risk exposure to remain relevant.

The Systemic Consequences

When risk-maxxing becomes normalized across domains, we get cascading effects that threaten the foundations of collective action:

Crisis as Strategy: High-stakes chaos gets manufactured rather than managed. Risk-maxxers understand that crises create opportunities for rapid change that would be impossible under normal conditions. Rather than seeking stability, they create instability that advantages their particular capabilities or positions.

Collapse of Collective Action: The more risk-concentrated a domain becomes, the harder cooperation becomes. When actors are betting everything on incompatible outcomes, compromise becomes existentially threatening. Climate policy fails partly because major players have committed to economic models that require continued emissions. Tech regulation struggles because companies have bet everything on growth trajectories that regulation would constrain.

Winning the Bet, Losing the Game: Some risk-maxxers will succeed in achieving their immediate objectives while undermining the systems that made success possible. Companies that capture markets through aggressive risk-taking may destabilize the economic conditions that sustain markets. Political movements that gain power by breaking norms may find themselves governing systems they've damaged beyond repair.

Fragility Accumulation: Each successful round of risk-maxxing makes the overall system more brittle. When everyone optimizes for maximum upside rather than robust downside protection, small shocks can trigger cascading failures. The system becomes dependent on everything going right rather than resilient to things going wrong.

The Choice Ahead

We're living through a fundamental shift in how power operates. The question isn't whether risk-maxxing will continue—it will, because it works within the current system's incentive structure. The question is whether we can evolve systems that make extreme risk-taking less attractive without stifling legitimate innovation and necessary change.

This requires acknowledging an uncomfortable truth: risk-maxxing often succeeds precisely because it externalizes costs to future generations, other stakeholders, or society as a whole. Those bearing the costs rarely have equivalent power to impose constraints on those creating the risks.

The age of risk-maxxing isn't an accident or aberration—it's a rational response to current incentive structures. If we want different outcomes, we need different incentives. That means designing systems where taking care of downside risk provides competitive advantages rather than competitive disadvantages.

The stakes couldn't be higher. We're not just witnessing individual actors taking extreme risks—we're watching the emergence of risk-maxxing as the viral strategy across every major global system. The question is whether we can survive the success of strategies that depend on these systems' resilience as a backstop while systematically undermining them.

What happens when everyone abandons safety margins simultaneously? We're about to find out.