In a recent article, Charlie Guo adds to the growing concerns that a too-concentrated ownership of generative artificial intelligence by a few companies could actually be dangerous to civilisation.
Generative artificial intelligence or Generative AI refers to the use of AI to create new content, like text, images, music, audio and videos.
Guo identifies 5 technology companies that are dominating investments in artificial intelligence startups. Although Meta is not one of the 5 investors, it is attempting a different approach to dominating the artificial intelligence market.
Together with Tesla, these Big Tech companies – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – are known as the “Magnificent Seven.” They comprise 29.6% of the market capitalisation of the S&P 500. Last month The Motley Fool noted that Wall Street’s reliance on the Magnificent Seven has grown to a historically unhealthy level.
Setting aside a potential AI apocalypse that many are afraid of, Guo argues that concentrating AI into the hands of a few is in itself a problem.
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The following is paraphrased from Charlie Guo’s article ‘Is Big Tech monopolising the AI boom?’ published by AI Supremacy.
Last month, Google agreed to pour up to $2 billion into the AI startup Anthropic. Normally, that would be a gargantuan amount of money for a startup to raise. But in Anthropic’s case, it isn’t even the biggest deal it’s done this season – in September, Amazon agreed to invest a separate $4 billion into the company.
If you’re a casual observer of the AI boom, it might seem like there’s a lot of fierce competition. But behind the scenes, leading AI startups have something in common: a narrow set of investors.
Guo explained why AI startups need so much money: “Foundation models like GPT-4 or Claude need hundreds of millions of dollars to train, and millions more to run at scale. These upfront costs go towards data collection, training runs, and fine-tuning.”
On paper, AI companies are in a bind, Guo added. “It takes serious capital to build and train new foundation models, but the [return on investment] is far from certain. GitHub Copilot is the only product I’m aware of that’s making over $100 million in revenue and isn’t losing tons of money in the process. Though, when you consider the training costs, it’s unclear whether Copilot is net profitable over its entire history.”
Who then, can bankroll new AI development, without the certainty of financial returns? Big tech companies, and specifically cloud platforms.
Meet the new boss, same as the old boss
OpenAI kicked off the current wave of billion-dollar funding rounds when it closed a massive investment from Microsoft last year. The details have never been made public but it has long been rumoured to have been a $10 billion deal.
In fact, if we look at some of the best-funded AI companies, there’s a surprising trend. Many of them have taken money from the same five names: Amazon, Google, Microsoft, Nvidia, and Salesforce.
Below are ten of the best-funded AI companies (plus Hugging Face, because it’s pretty important to the AI ecosystem). Of these eleven, only two (Cerebras and Scale AI) haven’t taken investment from one of the five tech companies mentioned.
Here’s how the investments are broken down:
When we think of big tech today, there’s Google (aka Alphabet), Amazon, Microsoft, Meta, and Apple. “Of those, the first three are all over these investments,” Guo said, “while Apple and Meta are nowhere to be found. And while we don’t yet know Apple’s generative AI plans, Meta is playing a big role in the AI landscape.”
Ironically, the biggest obstacle to Microsoft, Google, and others controlling the next generation of AI technology is Meta. Rather than invest in AI startups, Meta’s strategy seems to be to develop cutting-edge models, and then openly release them.
Their flagship model is Llama 2, a ChatGPT competitor, but there’s a growing list of other open models. They cover transcription, translation, coding, computer vision, and more. By making it so (almost) anyone can run Llama 2, or any other foundation model, Meta is chipping away at the moats of OpenAI, Anthropic, and DeepMind. And in turn, it is decreasing the value of its competitors’ investments.
Guo explained that all is not as it seems with Meta’s approach: “Despite Meta’s efforts to democratise AI, it still controls the training dataset and RLHF process. Its licenses are very permissive but aren’t 100% open-source. And to be honest, I’m not in love with the idea that Mark Zuckerberg may be all that stands between us and the AI dominance of Amazon, Google and Microsoft.”
How worried should we be?
Right now, Guo said, we’re all trying to figure out how big this AI thing is going to be. Depending on who you listen to, it might be a bubble, it might be the dawn of a new revolution, or it might be the Pandora’s box that leads to humanity’s undoing. But let’s put aside the AI apocalypse for a moment.
There’s a big reason why we ought to push back against a few companies controlling the latest and greatest foundation models. “In the pursuit of progress, you want new blood, new talent, and new ideas,” Guo argued.
If AI proves to be an important, but not earth-shattering, invention Big Tech companies will adopt and distribute AI faster than the upstarts and we’ll see the continuation of recent trends. Big Tech will offer AI products for cheap or free, will collect our data for ads and training runs, and will mostly focus on business-to-business (“B2B”) or business-to-consumer (“B2C”) use cases for generative AI. That’s not ideal, but it’s a solvable problem.
But if the techno-optimists are right, and AI reshapes the entire world then concentrating AI into the hands of a few means putting a cap on the potential of humanity as a species.
“I don’t know which scenario will come to pass,” Guo concluded. “I’m not sure anyone does. Clearly governments are concerned enough about AI that they’re ensuring we do something to regulate them. But with all the ongoing rules, laws and executive orders, it seems worthwhile trying to make AI (safely) available to more than a few gatekeepers.”
Read the full article ‘Is Big Tech monopolising the AI boom?’ HERE.
Featured image: The “Magnificent Seven.” Source: AI Supremacy
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