Weary Giants and AI

The tech world has a strange relationship with regulation. Often characterised as a libertarian crowd, Silicon Valley leaders used to be vehemently against government involvement. Written in 1996, John Perry Barlow’s Declaration of the Independence of Cyberspace began:

“Governments of the Industrial World, you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.”

Fast forward to 2023 and the new generation of Silicon Valley’s tech leaders are making calls for generative AI to be regulated. Many of them will be in London in the autumn for the Prime Minister’s AI Summit. What’s changed?

There’s no doubting that the pervasiveness and economic impact of technology have upped the stakes for governments. But the tech world has also realised that trust is vital for its survival and effective regulation is essential for that.

The debate about AI regulation currently focuses on trying to stop really bad things from happening. Others far smarter than me will have to work out how you do that. But for what it’s worth, I’m sceptical of apocalyptic near term predictions for AI. I feel more affinity with science fiction author Ted Chiang and his advice to replace the words ‘artificial intelligence’ with ‘applied statistics’ in headlines and see whether they have the same power.

But if you’re going to regulate technology, could you regulate it ‘for good’? I’d argue that if you’re a government you’re better off shaping incentives for the direction of innovation in the future than trying to shut the stable door after the proverbial horse has bolted.

And that’s where policy towards impact investing comes in. By tilting large capital allocators – particularly those with a public subsidy like pension funds and endowments – towards deliberate and measurable social and environmental impact, the next generation of innovations in AI and other fields will be more likely to have a public benefit.

The days of the Declaration of Independence of Cyberspace are long gone. Technology, government and finance are all now interdependent. A future where tech is used for good must recognise that.

This article first appeared in The Practical Optimist, a newsletter I send out once a month from BGV for investors with an interest in tech for good.

‍