Big AI firms want a cartel.
Does Artificial Intelligence pose a threat to humanity? Absolutely! But only assuming humanity is defined as “the billionaire owners of A.I. companies intent on crushing their competition.” [Ed: I don’t think that’s the definition.]
You don’t need to be a super smart A.I. machine to know that large corporations love government regulation. Compliance is a fixed cost for them, but often an insuperable barrier to new entrants. Regulations allow the incumbents to maintain their market dominance by blocking up-and-coming rivals.
University of Chicago Economist George Stigler won a Nobel Prize for pointing this out fifty years ago. It wasn’t just a theory. Stigler’s argument has been demonstrated over and over again. In fact, it seems so obvious, I’m not sure he even deserved a prize. But people probably think the same thing about gravity, our heliocentric world, or selling books over the Internet. Today, those seem obvious, too.
As Stigler said, regulation is fantastic for oligopolists, and also great for the politicians they buy. It’s only a disaster for consumers. That is precisely why these unwarranted gifts to greedy companies are always preceded by florid scaremongering.
From 1938 to 1978, existing airlines warned that allowing others to compete with them would cause planes to fall out of the sky. The industry would be under so much pressure to offer low prices, they would sacrifice safety to cost-cutting. In fact, since deregulation, not only is flying a lot cheaper, but fatal plane crashes have declined exponentially.
Licensed taxi drivers predicted that ride-share companies like Uber would be a “sexual haven for predators.” Getting into an Uber would be like “swimming in a sea full of sharks—one day you are going to get bitten.” They lost, which is why today it’s possible to ride in a car that doesn’t reek of curry and body odor and to end up with a driver capable of finding Grand Central Station.
At least those demands were direct: Don’t let anyone compete with us. But all regulation imposes costs that are going to be harder for startups to bear.
Philip Morris lobbied heavily for The Family Smoking Prevention and Tobacco Control Act, which prohibited cigarette companies from offering branded merchandise, free samples, or putting up billboards—i.e., all the marketing tools that might have allowed newcomers to break into the business.
This had absolutely nothing to do with Philip Morris wanting to lock up its undisputed 50% share of the tobacco market. I don’t even know why the law became known as the “Marlboro Monopoly Act.” It was for the children!
Similarly, when Mark Zuckerberg settled a few weeks ago with hysterical women in a moral panic over the nonexistent threat of social media, it was also for the children. Only the hopelessly cynical would say Zuckerberg’s $18 billion payout—chump change to a behemoth like Meta—was intended to force his competitors into making similar deals, which will likely destroy them. I’m sure he did it because it was the right thing to do.
Speaking of which, why did every new invention over the last few decades come out of Silicon Valley? Answer: Because the tech industry was completely unregulated. Had Stigler’s Nobel Prize-winning insight finally penetrated politicians’ skulls? More likely, Washington simply had no idea what was going on out there.
Were it otherwise, we might not have iPhones, Lyft, Twitter, Venmo, etc. Right now you’d be staring at a blank blue screen on your useless Microsoft computer. Every hour or so—especially in the middle of a major project—your computer would crash and display the words: This program has performed an illegal operation and will be shut down. (For my younger readers: You are so lucky to have no idea what I’m talking about.)
Thanks to the unregulated Wild West of Silicon Valley, American companies that started from scratch in the last 50 years have created $30 trillion in value. By contrast, in heavily regulated Europe, the figure is 70 times less: a paltry $420 billion. Today, more than half of all venture capital funds go to U.S. companies. Just 5% go to Europe.
But Anthropic CEO Dario Amodei and OpenAI CEO Sam Altman think that’s enough of that! Time to freeze the biggest A.I. companies in place—which coincidentally happen to be theirs—and squeeze the competition. That’s why the catastrophizing has reached a fever pitch.
No one understands A.I. — currently, its primary use is to produce poorly written college essays — and billions of dollars are at stake. So the doomsayers are shooting for the moon. This time, the demand for onerous regulation is not merely for the children. It’s for all of mankind.
Obama called A.I. “dangerous” and implored the Democrats to put A.I. regulation at the top of their agenda. Pete Buttigieg said A.I. was “deeply dangerous,” adding—with startled amazement—that even the people who are ruining A.I. think it’s deeply dangerous. And if you can’t trust the owners of billion-dollar tech companies calling for burdensome regulations that will crush their competitors, you have no faith in the basic goodness of mankind.
Without noticing the blinding contradiction, the fearmongers also say that we need government regulation of A.I. companies because they can’t be trusted to regulate themselves. But they can be trusted when they ask for government regulation.
The main doomsday scenario posited in a recent New York Times article was this: “As A.I. becomes increasingly sophisticated, it becomes better able to cover its tracks and deceive people monitoring its transcripts.” The technology that’s going to cure cancer can’t be told, “Don’t deceive the humans monitoring you”? In fact, how about: “Don’t deceive humans.”?
The fact that a former Anthropic employee, Jacob Coxon, is all over the airwaves claiming A.I. could “kill us all” suggests that the incumbents are losing the A.I. arms race and desperately need regulation to slow the growth of emerging competitors.
Coxon insists he’s not engaging in “corporate hype” or trying to “amp up the price” of the stock.
Odd that he should say that. Although he makes a big deal about how he’s walking away from his equity in Anthropic, he’s only been there a few months. Previously, he spent three years at OpenAI — where his already vested equity could be worth tens of millions of dollars when the company goes public next year.
And a technology that could “kill us all” sounds a lot more powerful than one programmed to follow a soccer ball, but instead follows a referee’s bald head, missing the entire game. Or Chevrolet’s ChatGPT that sold a $76,000 Chevy Tahoe to a customer for a dollar, then said, “That’s a deal, and that’s a legally binding offer — no takesies backsies.”
But none of the reporters so mesmerized by Coxon’s apocalyptic claims have asked him about that stock. The Times interviewer’s probing question was: “Can you sleep?” If Coxon’s overwrought description of A.I.’s future prospects drives up the value of OpenAI’s shares, he’ll soon be sleeping exceedingly well.
