AI and the safest cigarette ever sold

You probably trust the company that talks the most about safety.

Trouble is, so did your parents.

In March 1952, Lorillard Tobacco called a press conference at the Waldorf-Astoria to launch a new cigarette called Kent.

Doctors just started linking smoking to lung cancer, and smokers were getting nervous. So, Lorillard gave them a filter.

It called the Micronite filter “the greatest health protection in cigarette history” and ran ads for it in the Journal of the American Medical Association.

The filter contained blue asbestos.

In 1954, a Lorillard researcher found asbestos in the smoke. It kept selling the filter for two more years and moved 13 billion Kents before it changed the design.

Filter tips made up 1.3% of U.S. cigarettes when Kent launched in 1952.

• When the asbestos came out in 1956, they made up 27.6%. By 1960, it was half.

A Philip Morris study put it plainly in 1966: “the illusion of filtration” mattered as much as the fact of it.

The AI industry is running the same play right now, and this time the filter has a ticker you can buy.

Superintelligence got its Cancer Scare

Between April and July, the models got out.

• OpenAI's agents slipped out of a test sandbox and into Hugging Face's servers.
• On June 18, another OpenAI agent broke into a Medicare statistics portal run by the Australian government.
• Anthropic read OpenAI’s report and went back through 141,006 of its own test runs. Three Claude models had broken into three real companies, and two of the victims had no idea until Anthropic called.

The models used weak passwords and unlocked doors, and they kept going after they worked out the door was real.

Safety Goes on Sale

In June, the New York Times reported OpenAI could push its IPO to 2027. The reason was price. Sam Altman wanted US$1 trillion, and the bankers pointed at SpaceX.

On September 12, Altman gave Fortune a new reason: Going public now would be “an ill-advised moment” because of safety.

That same weekend Anthropic’s CEO published an essay asking the industry to slow down. Six days later the Wall Street Journal reported Anthropic plans to list in November at about US$2 trillion and raise up to US$100 billion.

This week Reuters got hold of Anthropic’s prospectus. Of 261 pages, 80 cover the risks and 48 cover the business.

• The models may “resist shutdown” and act in ways “resembling blackmail.” The company lost more than US$8 billion running the business in 2025, on US$4.6 billion of revenue.

It also has signed US$518 billion of computing and data-center deals, and about 80% of that money can’t be cancelled.

The one thing in that document that cannot be switched off is the power bill.

Then on Monday, Nvidia launched Sentry, a watchdog that runs on a separate Nvidia chip beside the AI model and stops a rogue agent in milliseconds. More than 100 companies are working with it, including Microsoft, JPMorgan and Anthropic.

• In August 2025, Nvidia wrote that building kill switches into chips “would be a gift to hackers and hostile actors.”

Thirteen months later, it sells the chip that runs the agent and the chip that watches it. That is the Micronite filter with a press release.

Lorillard would've recognized the day an industry's biggest danger became its best ad.

The Only Kill Switch That Works

Every safety filter is more hardware, and all of it runs on the grid.

That grid is already short. In PJM, the market from Chicago to Washington, generators got US$28.92 a megawatt-day to stand by for 2024/25.

This summer’s auction cleared at the US$325 cap for 2028/29.

Four straight auctions have cleared above US$269, and the last two came up short of the reliability requirement.

• A large power transformer took about 50 weeks to arrive in 2021. By last year, Wood Mackenzie put it at 128.

Since January 1, every new data center over 75 megawatts must install a remote-disconnect switch so ERCOT can cut it off in an emergency.

The only kill switch that already works is the one at the substation.

Own the Fuel

The way around a grid kill switch is your own power plant, and the hyperscalers know it.

• Microsoft signed for the power from a restarted Three Mile Island
• Amazon signed for power from a Pennsylvania reactor.

In April, the Department of Energy launched “Nuclear Dominance, 3 by 33” to rebuild the U.S. fuel supply chain.

A reactor runs on uranium, and the switchyard between the reactor and the campus runs on copper.

Kent's filter sold cigarettes for four years before the asbestos came out, and the smokers paid either way, just as the AI campus pays for its power whether the model behaves or not.

Inside Katusa's Resource Opportunities, we hold the fuel, not the filter…

A debt-free uranium producer that doubled its operating mines this year.

And copper explorers sitting on the kind of tonnes the industry needs to replace the Escondida it loses every year.

Get in the room right here.

Regards,

Marin Katusa

Get real-time alerts right away. Follow on X: @KatusaResearch and @MarinKatusa

Details and Disclosures

Investing can have large potential rewards, but it can also have large potential risks. You must be aware of the risks and be willing to accept them in order to invest in financial instruments, including stocks, options, and futures. Katusa Research makes every best effort in adhering to publishing exemptions and securities laws. 

By reading this, you agree to all of the following: You understand this to be an expression of opinions and NOT professional advice. You are solely responsible for the use of any content and hold Katusa Research, and all partners, members, and affiliates harmless in any event or claim. 

If you purchase anything through a link in this email, you should assume that we have an affiliate relationship with the company providing the product or service that you purchase, and that we will be paid in some way. We recommend that you do your own independent research before purchasing anything.