Thoughts in Between

by Matt Clifford

Matt's Thoughts In Between - Issue #24

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Beware the simple narratives in Chinese AI

I've argued before that there's a danger of slipping into "goodies vs. baddies" narratives when thinking about the geopolitical impact of Chinese AI. Two stories this week reinforce that risk by surfacing "narrative violations" - datapoints that don't support the simplistic story of "monolithic Chinese AI threatens the West".

First, the always-interesting Jeffrey Ding points to an important development in his excellent newsletter: the authorities in Shandong Province have initiated a major crackdown on data privacy and brought criminal charges against Datatang, a big data company, and 10 other companies. Ding's Twitter thread provides a good short overview. The important point here is that the "China will win at AI because there's no concept of data privacy" narrative requires far more nuance. Above all, as Ding notes, one of the most important takeaways is that it's a mistake to view "Chinese AI" as though it was a single unitary actor.

Second, we've discussed before the crucial role of new kinds of chips in AI and in particular the US's view that foreign acquisitions of companies in this space may pose a national security threat. But this week there was the opposite story: the acquisition of Chinese AI startup DeePhi tech by California-based chip company Xilinx. I haven't seen any commentary on reactions in China [Last minute edit: Jeff Ding published some great content last night on the reaction - highly recommended], but it's an important reminder that traffic is far from one-way as this space continues to hot up.

Bonus: why a leading US professor is leaving China - easily one of the best short pieces I've read on China.

The EU, anti-trust and sovereignty

The big politics/tech news of the week was the $5bn fine that the EU handed to Google for breaking anti-trust laws. We've talked before about the EU's increasingly globally dominant role in tech (and particularly anti-tech) regulation, and this seems to mark a new watershed.

Aside from the merits of the case itself (I'm sure that anti-trust is going to be a topic we return to many times over the next year), it's fascinating to see how the politics is playing out. Margrethe Vestager, the powerful EU Commissioner for Competition, clearly believes this is a popular cause - while the counter-tweet (extraordinary that this is a thing...) from Donald Trump frames this as part of his broader US vs. the world narrative.

I found Jeremy Cliffe's take interesting:

This is what sovereignty looks like in the 21st century:

It's an interesting idea: a shift from a monopoly on legitimate violence to one on legitimate regulation. I'm sure we'll see much more of this as states seek to flex their muscles against the increasingly powerful tech giants.

Bootleggers and Baptists in tax reform

One of the most important frameworks for understanding the political economy of regulation is economist Bruce Yandle's concept of "Bootleggers and Baptists". The basic idea is that much regulation is the result of apparently unlikely coalitions between groups who ideologically support the intent of the regulation ("Baptists") and those who profit from undermining it ("bootleggers"). Bootleggers struggle to advocate using their sincere arguments ("we'll make more money selling alcohol if legal sales are restricted"), but Baptists provide respectable cover ("alcohol is immoral").

Once you start thinking about this framework, you see it everywhere. There was a particularly striking example this week in Politico's essay on why making it easier to file US taxes is so difficult. There's a powerful - and surprising - lobby against reform: tax software companies like Intuit (who would lose sales if tax filing was free and easy) and ideological tax-cutters like Grover Norquist (who believes that if paying tax is too easy voters will resent it less...)

In a future edition, I'll look at the rise of anti-tech regulation through this lens. There are no shortage of bootleggers or Baptists out to get Google et al.

Quick links

  1. Who is running out of young people? Great chart on the population structure of Europe.
  2. Why we need a Bradford-San Francisco direct flight. The remarkable economic advantage of access to Silicon Valley.
  3. You're not thinking long-term enough. Nice piece on what we need to do to be around in a trillion years or so.
  4. What do tech billionaires want? They are not like other very rich people.
  5. A little way to go for humans... but a complete adult fruit fly brain has now been mapped with electron microscopy.

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Until next week,