WASHINGTON, DC – APRIL 30: (L-R) Warner Music Group CEO Robert Kyncl, British singer-songwriter FKA twigs, AG-AFTRA National Executive Director Duncan Crabtree-Ireland, Ben Sheffner, the Senior Vice President and Associate General Counsel of the Motion Picture Association, President and CEO of Digital Media Association, Graham Davies, and Lisa P. Ramsey, a Professor of Law at the University of San Diego School of Law are sworn in during a hearing on the “The Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act” with the Subcommittee on Intellectual Property at the Dirksen Senate Office Building on April 30, 2024 in Washington, DC. The Senate Judiciary Subcommittee held the hearing to discuss contents of the NO FAKES act, a bipartisan bill that would protect the voice and visual likeness of individuals from unauthorized recreations from generative artificial intelligence (AI). (Photo by Anna Moneymaker/Getty Images)
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There’s no Artificial Intelligence (AI) “mania.” Assuming the latter is a pejorative (it’s not – more on this in a bit), AI investment is likely nowhere close to what it could be.
To understand why, it’s useful to travel back in the time to the 1970s and 1980s when cable television was still in its infancy. In his new autobiography, Born To Be Wired, cable visionary John Malone writes of how needlessly slow the growth of the cable industry was. Newness was a factor, but also the difficulty of expansion into new markets.
For each one, Malone writes of how “companies spent hundreds of thousands of dollars on advertising, presentations, and expensive dinners to woo a city.” This put local politicians in a lucrative position. Malone recalls how they could demand “extras” from would-be cable providers. Beyond simple “cash under the table,” they would ask “Can you plant trees in the city green? Can you build a small municipal building?”
To ensure they had the votes, Malone reports that cable companies would “rent-a-citizen” whereby “cable operators offered local politicians a chance to become investors in the new local franchise.” The money was easily loaned to the rented on the supposition that once the franchise was approved, “owners” would be bought out at an impressive price.
The regulatory patchwork didn’t foster expansion of cable television, it slowed it. Uncertainty is a tax, as is the light bribery necessary to make uncertainty go away a tax. Sometimes it got so bad that local police would arrest cable construction crews if the company they worked for hadn’t properly pleased the local politicians. Malone quips that “their side had guns.” Along came Sen. Barry Goldwater and Rep. Tim Wirth.
The libertarian Republican senator and the Democratic congressman pieced together the Cable Communications Policy Act of 1984. Signed into law by Ronald Reagan, the legislation made it possible for cable companies to not only “charge what the market would bear,” but it reined frequently corrupt cities and states in their attempts to hijack the rollout of a promising television medium to their narrow benefit.
In Malone’s words, “Suddenly Wall Street had the one thing it craves: certainty.” Investment subsequently soared, only for cable to reach its previously unrealized potential.
It’s a reminder of what’s highly likely: substantial as investment has been in the still young AI space, it’s not close to where it will be. As is always the case, a lack of regulatory certainty exists as a tax on the investment necessary to discover a very different future. It calls for an AI version of the Cable Communications Policy Act.
To which some will quite reasonably respond that cities and states should be the proverbial policy laboratories. It’s hard to argue with at first glance, but given a second pass the argument presumes that if cities and states take charge, that a national bill will be thwarted. It’s an unlikely presumption.
Precisely due to the international scope of AI, it’s inevitable that politicians on all levels will want to weigh in, thus more uncertainty in concert with less investment. In which case, it’s better to acknowledge reality in the here and now with a national bill.
If so, it’s not unreasonable to speculate that a lot of still sidelined investment will be put to work in search of an AI tomorrow that won’t remotely resemble today. Not only is “manic” investor excitement not a bad thing, it can’t be said enough that its necessary for AI to realize its own, incredibly abundant potential.
