The 'Enlightened' AI Oligopoly

Thanks to AI, 'Big Tech' is consolidating to into something even bigger

"Happy Friday All,

We are witnessing the dawn of a new phase for Big Tech — one where 'Big' morphs into 'Behemoth'. We're still in the early stages, yet a handful of players are nudging towards an ultra-powerful Tech oligopoly, largely fueled by aggressive AI investments.

So, move over 'Big' Tech, the era of Mega Tech is upon us.

The Intelligence Revolution

I conceive of what's unfolding with regards to AI as the inception of a bona fide Intelligence Revolution. Irrespective of whether AI is conscious, the way in which we intertwine AI into the pursuit of knowledge and creativity — that is, Intelligence — has irrevocably changed. The entities that construct, deploy, and 'own' these capabilities will be compelling global actors. There is all to play for.

Although a great deal has changed since the debut of ChatGPT last November, the narrative of the 'AI Arms race' presupposes that the quest for AI dominance is a zero-sum game — where only ONE entity (be it a company or a country) reigns supreme.

As Big Tech wrangles on AI, we've been asking ourselves:

• Will the Microsoft/OpenAI alliance overshadow Google?

• Can any other company engineer a large language model that can challenge GPT-4?

• Who will create the ‘one model to rule them all?’

Yet, it appears we've been posing the wrong questions. The journey ahead doesn't hinge on a solitary victor. Instead, it is more likely that an elite coterie of tech giants will ascend, each relishing their own victories.

This outlook finds resonance in the stock market. The S&P 500 is up 18% this year, primarily attributed to AI. (Congrats NVIDIA stockholders!) This confounded the expectations of money managers — and to be fair, the S&P 500 would be down 2% this year without the AI boom. (By the way, who’s been watching Meta’s comeback? Its stock is up 250% since last year.)

The competition is fierce, even among this elite group. On the Large Language Model (LLM) front alone, the pace is breakneck, with entrants like Google’s Bard, Meta’s LLaMA, Amazon’s Titan, and Apple’s Ajax (I’ve been saying for months that Apple is working on GenAI, right?). There seems to be room for 'everyone'.

However, the critical caveat is that 'everyone' here denotes a small cluster of key players: the Big Tech companies or start-ups backed by them. Hundreds of millions (or even billions) of dollars of investment are required for the necessary hardware and cloud infrastructure, not to mention the handful of global experts capable of building these models.

The Models That Rule the World

Instead of cannibalizing each other, these Big Tech companies are collectively spearheading a revolution, each developing models that will govern our world, as opposed to a single model to rule them all.

I foresee a golden era for Mega Tech, where these juggernauts solidify their positions in the prestigious trillion-dollar club. I even think that we might see a ten-trillion-dollar valuation for one of these titans within the next decade.

Today, the market caps of Apple, Microsoft, Alphabet, Amazon, and more recently, Nvidia, eclipse the wealth of most countries. To put that in perspective, fewer than 20 countries can boast a GDP of over 1 trillion dollars.

But where does Mega Tech's societal responsibility lie? Since the tumultuous Facebook scandal and Zuckerberg's subsequent congressional grilling, there's a palpable expectation that tech oligarchs must shoulder societal obligations, despite not being elected representatives.

Currently, I see two distinct strategies in play:

1. THE PATH OF GOLDEN SILENCE: By maintaining silence on the contentious AI ethics debate and quietly progressing with their product/company, some giants, like Tim Cook (Apple) and Jensen Huang (Nvidia), hope to stay their course. This tactic has proven quite effective, with Apple's reputation as a champion of consumer privacy serving as a masterstroke. However, it's intriguing to see how Nvidia gets inadvertently entangled in significant political debates, such as export restrictions on its hardware to China. Try as they might to avoid them, it is almost inevitable that they will get tangled up in these debates.
   

2. THE ROUTE OF ENLIGHTENED LEADERSHIP: To fully embrace the AI ethics debate and even posture oneself as an 'enlightened' leader, focusing on developing AI standards that surpass profitability to enhance the human condition. (I see Microsoft and OpenAI leaning in hard on this stance.)

This divergence was underscored last week when the White House secured voluntary commitments from seven leading AI companies to advance ‘safe, secure, and transparent development’ of AI technology. Signatories included the newcomer, Inflection (the Reid Hoffman/Mustafa Suleyman venture), along with Amazon, Google, Meta, Microsoft, and OpenAI.

Notably absent? Apple and NVIDIA.

Of course, the big question is whether the ‘Enlightened Oligarchs’ actually do something of value, or if it’s all of a hollow PR exercise. (Having engaged with Microsoft’s programmes on ethical AI, I think it would be unfair to dismiss it all as posturing. Nonetheless, by making such grand proclamations, they’ll need to deliver something of value.)

Are Apple and NVIDIA wise to take the path of Golden Silence, or are they shirking their responsibility? Perhaps a world moulded by ‘Enlightened Mega Tech’ is not only inevitable — but even desirable?

A lot to chew on here.

Namaste for now.

Nina