In AI, Size Matters Most

Some things can only be explained by bureaucratic fatigue - the process by which vibrant humans are degraded into meat drones over hundreds of hours of tedious meetings. Only such meat drones can rubber-stamp things like hospitals with tiny ambulance bays, police officers on bicycles, and hiring McKinsey consultants.

Once you realise this, much of the world makes a bit more sense because whenever it seems bonkers, you can just imagine a group of tired wretches getting fed up enough that any decision will do. Anything to get some blasted project underway.

Away from the hype and hustle, I try to understand the broad themes of technology and society. At the very least, I'll make your inbox less boring.

I suspect that bureaucratic fatigue was behind the British Department for Science, Innovation and Technology (DSIT) presenting a modest injection of cash as a wide-reaching AI fund earlier this year.

It presented £1.3 billion as an AI-focused economic stimulus bump, except £800 million was earmarked for a supercomputer in Edinburgh and £500 million was for funding compute. That would have been a pretty tiny drop, and it wouldn't have even hit the startup-dominated AI ocean - the new Labour government is right to shelve it. But it was, at least, a drop.

Britain, despite having the world’s third largest tech sector - bigger than France and Germany combined - is in a poor position to capitalise on the AI revolution. Not because it lacks talent, data or compute - Britain can acquire vast amounts of those - but because it can't win control over the regulatory narrative. Britain's voice no longer carries in Brussels.

And do not underestimate the importance of an economy's regulators - the interplay between them and the money behind technology is as intricate as it is sordid, and reaches as high up the political ladder as it sinks into the sewer.

Ostensibly, tech companies operate a step ahead of regulations, pushing the envelope of acceptability and asking forgiveness instead of permission, conducting their business not so much outside the law, but rather in a vague absence of it. That's what happened with user surveillance, EULAs that negate your ownership of your devices, algorithms that feed you addictive content and AI that trains on words you've written. There was no law to say tech companies couldn't get away with violating you in these ways, so they did.

But tech doesn't just fill regulatory voids with its nastier behaviours - it actively keeps those voids open. It spends millions on political lobbying - paying to whisper in politicians' ears - and spends millions more in donations to election campaigns (which have the happy attribute that if one co-founder donates to the Democrats while another co-founder donates to the Republicans, then it doesn't matter what happens in Washington, the tech company wins).

However, the tech sector's greatest lever of influence is its sheer economic importance to the United States. It has made itself so important to the American economy that if politicians make it suffer with disadvantageous laws, then the American economy - and the American voter - suffers too. Tech isn't just too big to fail - it's too big for Washington to mess with, and the world (generally, at least) follows Washington’s lead (or dictates).

Except Brussels has decided that it wants to set its own regulatory direction. That's already causing some friction with American big tech - Meta delayed the roll out of its Threads app over its objections to EU laws and Apple is withholding its new AI offering from Europeans.

But, away from the showboating, Europe is populous and wealthy, and technology companies want to profit from it. Brussels ultimately has to be listened to and interacted with if Euros are to flow across the Atlantic. I have a feeling that means more investment will be made in the European technology sector, that tech's calculus will be "if we make ourselves more important to the European economy, then Brussels will have to listen to us."

And, since the next several years of tech investment will be in AI, that means Europe could see a lot of AI money pouring in. Post-Brexit Britain, with it’s comparatively meagre population and economy (about 1/10th and 1/6th of the EU, respectively) will have to watch from across the sea.