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AI-powered Monopolies and the New World Order

How AI’s reliance on data will empower tech giants and reshape the global order


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Sukhayl Niyazov

3 years ago | 6 min read

Artificial intelligence and new technologies will undoubtedly bring about tremendous changes, both positive and negative. They will have far-reaching impacts upon our daily lives, our work, security, and values.

AI is arguably the most dangerous challenge humanity has ever witnessed, for it will cause massive social upheavals and, in the long run, endanger the very essence of being a human.

When ordinary people hear of the AI threat to humankind, they usually think of two issues: massive job losses and total replacement of humans by robots and the future where algorithms will totally dominate us and may even exterminate mankind. There are, however, other menaces that are largely overlooked by people, because media mostly focuses on the first challenge (job losses), whilst Hollywood — on the remote future where robots will supplant humans.

Due to overly focus on these two problems, it is worth examining another, often condoned consequence of the advent of AI. This process that has already begun and is unlikely to be stopped — the formation of AI-powered monopolies.

THE RISE OF CORPORATE POWER

Even now there is a growing discontent both in the media and regulatory bodies over multinational corporations eclipsing nations-states in power and influence. It is has been rightfully noticed by S. Marcuzzi and A. Terzi that

at a time when democratic governments’ capacity to live up to their citizens’ expectations is shrinking, corporations are amassing tremendous power, not only in terms of money but, most importantly, data.

These companies include so-called MAFIA-G (Microsoft, Apple, Facebook, IBM, Amazon, Google), as well as three Chinese tech giants (Baidu, Alibaba, Tencent), or BAT.

Nowadays, multinationals play a huge role not only in providing essential services and fostering innovation but also protecting us in increasingly important cyberspace, the job that used to be performed by governments.

Apple, with almost $240 billion in reserves, can theoretically launch an investment program twice the size of the Marshall Plan (in today’s dollars).

Take interference into elections, for instance. Today, it is Twitter and Facebook, not the US government, who regulate social media and fight misinformation and propaganda. Another colossus, Google, has stepped up to protect the EU from malignant influence by excluding non-EU sources from buying political ads ahead of the European Parliament elections because the EU lacks a cohesive framework for preventing online meddling.

These are hardly the only examples of multinational corporations designing and enforcing their own public policies. Microsoft recently pledged $500 million to expand the availability of affordable housing in Seattle, which would generally be the job of the US Department of Housing and Urban Development and other public agencies, both state and federal. And at the Paris Peace Forum last November, Microsoft, Google, Facebook, and other tech giants joined 50 governments in signing a new multilateral cybersecurity agreement. Notably absent were the governments of the US, Russia, and China. — Project Syndicate

When it comes to money, corporations are already more powerful than medium-sized countries. Apple, for instance, if its revenue is compared to the budget of the states, is the 23rd on the ranking of the biggest global revenues, ahead of Belgium, Russia, India, and Mexico.

Apple, with almost $240 billion in reserves, can theoretically launch an investment program twice the size of the Marshall Plan (in today’s dollars).

If we make an alternative list of top 100 economies, there would be 69 corporations and 31 states, according to the World Bank. More than one-third of world trade is simply transactions between various units of the same corporations rather than between nation-states.

It should come as no surprise that the most breathtaking and monumental projects, such as colonizing of Mars or providing the world with universal Internet access with the help of solar-powered drones and swarms of satellites come from private companies rather than governments — SpaceX, Facebook, Amazon.

MONOPOLIZATION OF THE AI INDUSTRY

However, AI and new technologies are already making Big Tech even more powerful than ever before. This is because the AI industry naturally gravitates towards monopolization.

There are two key factors that determine the quality of an AI algorithm: data and computing power. When data is fed into so-called neural networks, artificial neurons identify patterns within data and yield algorithms. With more data and lots of computing power (needed to perform an enormous amount of calculations when identifying patterns), algorithms become more and more sophisticated and give better results.

As Kai-Fu Lee, a famous expert on AI has put it in his book AI superpowers

the more examples of a given phenomenon a network is exposed to, the more accurately it can pick out patterns and identify things in the real world.

The problem with the AI-powered economy is that industries naturally tend towards monopolization because of the positive feedback loop that is generated as a result of AI’s dependence on data. If a particular company using AI gains an upper hand over its competitors, it will be very hard to resist a self-perpetuating cycle of monopolization.

Credit: Author

Such a company, thanks to an already large set of data, will have advanced algorithms. Advanced algorithms mean better user experience and more features, thereby attracting more customers. More customers, in turn, generate more data, which further improves the existing algorithms and makes the company’s products even more appealing, ultimately resulting in an even larger customer base, ad infinitum.

DATA AS THE NEW ELECTRICITY

Since the Industrial Revolution, the land has been diminishing in importance, for factories and machines — the lifeblood of the economy — do not need much space. Today, machines and factories are still the mainstays of the global economy, and, notably, the most powerful countries of today are not necessarily the biggest ones, for instance, Japan, the UK, Germany, South Korea, because land plays a secondary role.

In the modern era, however, data will eclipse both land and machines as the most significant asset, and wars will be waged not for the sake of oil or land, but rather for the control of the flow of data. Data will be the primary driver of the economy.

The race to acquire data is already on. Right now, tech giants acquire data by catching our attention with free services and information.

In the short run, this data is used for targeted advertisements that make profits for corporations; however, in the long run, more and more data will eventually perfect the algorithm to the extent that advertisements will not be needed — because algorithms will know us so well that they will make choices for us.

Ordinary humans will find it very difficult to resist this process. At present, people are happy to give away their most valuable asset — their personal data — in exchange for free email services and funny cat videos. It is a bit like African and Native American tribes who unwittingly sold entire countries to European imperialists in exchange for colorful beads and cheap trinkets. If, later on, ordinary people decide to try and block the flow of data, they might find it increasingly difficult, especially as they might come to rely on the network for all their decisions, and even for their healthcare and physical survival. — Y. N. Harari

For better or worse, tech giants will accumulate enormous power with more and more data.

It is questionable whether it would be better if governments controlled the data. After all, most people would prefer to give their data to Facebook and Google rather than an authoritarian strongman.

In the modern era, however, data will eclipse both land and machines as the most significant asset

We will likely be forced to completely redefine the current political, social and economic system, as “government tortoise cannot keep up with the technological hare”. The system in which we live today was devised in the age of steam engines and factories. It has not adapted to the age defined by information technologies, as we can see from growing inequality and stagnating wages in both America and Europe. Just as communism emerged in response to deteriorating living conditions among ordinary workers, it is likely that the advent of AI will create new ideologies and movements of an unprecedented scale.

This article was originally published by Sukhayl Niyazov on medium.

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Sukhayl Niyazov

Sukhayl Niyazov is an independent author covering politics, economics, and their intersections with artificial intelligence. His work has been published in Human Events, Global Policy Journal, Areo Magazine, Towards Data Science, Merion West, and other publications.


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