[yoran]

"Every industry that has enough political power to utilise the state will seek to control entry." - George Stigler, Nobel prize winner in Economics, and worked extensively on regulatory capture

This explains why BigTech supports regulation. It distorts the free market by increasing the barriers to entry for new, innovative AI companies.

[w10-1]

Stigler in particular (and transaction cost economics in general) point out that it's mainly industries with sunk resources (esp. immovable assets) that are incentivized to regulate market entry.

The tech sector has wildly moving resources (AI this year, crypto last year, big-data the year before...), even to the point where many skills are transferable; further, their markets include anything that can be digitized ("software will eat the world"), so investment can be quickly retooled as opportunities arise. As a result, tech virtually never seeks regulation (and can hide behind contract-law fictions to disclaim liability in software licenses and impose arbitration clauses for services). So it's not an instance of capture, and certainly not for the usual economic reasons.

Biden wants tech on his side. Tech wants to escape further blows to its goodwill like FaceBook/Google ad tracking, because every consumer tech application involves users trusting tech. So they cut a deal to put themselves on the right side of history, long on symbolism and short on real impact.

In AI, resources matter only to the extent you believe that larger LLM's can (a) not be replicated, (b) provide significant advantages, or (c) can impose a winner-take-all world where operations lead to more operations. In AI more than most markets, the little guy still has a chance at changing the world.