Economics: It is a commonplace truism of economics that market economies do not do enough technological and business-model research and development. The externalities from exploration of these spaces are immense. But those who undertake such explorations are never fully compensated—never receive anything close to the societal value that their explorations create. It is thus a good thing that invention, development, and innovation are supported by greed-maddened rich people of poor judgment, isn’t it? Eric Schmidt opines:
Chris Anstey: Chaotic Capital Markets Give US an AI Edge Over China: ‘One thing that’s emerging is a major difference between the world’s two largest economies with regard to how AI research and applications will be funded. And that in turn may affect the extent to which experimentation and diffusion of generative AI, or that which creates new content, evolves in the US versus China…. American capital markets are… a forum that allows anything to happen, including hype and mania, as witnessed this week with Nvidia Corp.’s record surge. While that makes US markets vulnerable to bloomberg.com/opinion/articles/2024-02-…, it also means they’re a venue for funding big dreams…. Eric Schmidt… described the American advantage in colorful fashion…. “The reason the hype is so insane” about AI is that the US has a “capital market that allows for crazy people to raise billions of money with no product, no team, no revenue, and no idea what they're doing…. And by the way, they’re going to go for another round, and get twice as high, and twice as high. I mean, the American capital market is allowing this. It's going to be youtube.com/watch?v=F4CKgTwXSG4. Which is wonderful”... <bloomberg.com/news/newsletters/2024-02-…>
Well, kinda-sorta. That an externality market failure is partly counterbalanced and offset by a behavioral-irrationality-herd-mania cognitive failure is a fact about the world. But it does not mean that we should not be thinking and working very hard to build a better system—or that those who profit mightily from herd mania on the part of others should feel good about themselves.
