Subsidization, Regulation, and AI

A bipartisan working group led by Charles Schumer has introduced what this article calls a “long-awaited AI roadmap.”  The document calls for at least $32 billion to be allocated for nondefense AI innovation.

Bill Gurley,  a venture capitalist of long standing, says:  In the entire history of the VC industry has there ever been a category LESS in need of incremental $$$$$.

Indeed. Corporations and individuals with money to invest are falling all over themselves to invest in things AI-related.  Meanwhile, there are all kinds of serious issues–the hardening of the electrical grid against both enemy-caused EMP and natural magnetic storms, for example–that are not being adequately funded by the private sector and could benefit from some of that $32 billion.  But they’re not as trendy at the moment.

Today’s WSJ includes an op-ed by Martin Casado and Katherine Boyle, both of Andreessen-Horowitz.  They write about the Department of Homeland Security’s formation of an AI Safety and Security Board, whose purpose is to advise the department, the private sector and the public on “safe and secure development and deployment of AI in our nation’s critical infrastructure,”  and they note that:

Of the 22 members on the board, none represent startups, or what we call “little tech.” Only two are private companies, and the smallest organization on the board hovers around $1 billion in value. The AI companies selected for the board either are among the world’s largest companies or have received significant funding from those companies, and all are public advocates for stronger regulations on AI models.

Much of the discussion of AI risks reminds me of the parable of Baptists and Bootleggers.  And when regulation becomes a dominant competitive factor in an industry, it becomes very difficult for new players to survive and thrive unless they are exceptionally well politically-connected.

Your thoughts?

Worthwhile Reading

Hayek, Fascism, and the Administrative State

Privilege in Bourbon France

An interesting piece on the tradition of limited government in Spain

A Danish manager working in Russia finds that his workers are looking for a more authoritarian style of leadership

Related: Culture and combined arms warfare

Civilization versus the Pathocratic State

The Disintegrating Conscience and the Decline of Modernity

Why are semiconductor companies not more enthusiastic about taking the lavish subsidies available under the CHIPS act?


“Public Service”

In a WSJ piece about the report recently issued by special prosecutor Robert Hur, John Sciortino notes that “The report also expressly weighed in its non-prosecution recommendation President Biden’s “nearly fifty years” of public service as a senator, vice president and now president.”

Left unsaid is why 50 years as a politician and officeholder should be considered as of more value than 50 years as a farmer, an entrepreneur, research scientist at a drug company, or night-shift worker at a steel mill or a semiconductor fab.  This kind of privilege seems directly contrary to the whole idea of equality before the law.  Indeed, it seems reminiscent of the kind of privilege that caused so much anger in pre-revolutionary France.

Note also that there are special student-loan forgiveness provisions for people who are employees of government entities (state, federal, local, or tribal) or of 501(c)(3) nonprofit organizations.

Sputnik + 66

Today marks the 66th anniversary of the Soviet Unions launch of its Sputnik earth satellite.

There’s a great memoir, Rockets and People, by Boris Chertok. The author worked on Soviet & Russian missile and space programs over a span of many years; he has many interesting stories to tell and many interesting characters (quite  few of them who were indeed Characters) to portray.  I reviewed the book here.

Technology, Regulation, Capitalism, and Innovation

An interesting and very dynamic presentation from venture capitalist Bill Gurley on the topic of regulatory capture.

Cases that he discusses include municipal wi-fi projects, electronic medical records systems, and Covid testing.

In response to Bill’s presentation, Sophie @netcapgirl says:

it’s lowkey a shame because the origins of the digital era are rooted in a collaborative environment between government & industry (and academia) that are hard to imagine today. for instance, JC Licklider (instrumental in the computer revolution) held positions at ARPA, MIT & IBM

They’re both right, IMO–Bill is correct about malign impact of regulatory capture on innovation, and Sophie is correct about the historical importance of government involvement in digital innovation.

So what conclusions should we derive from this polarity?