Private R&D cannot be protected perfectly because patents expire or industry know-how diffuses to other firms and not all rents from investments can be captured. There was a leaked memo out of Google recently that said that Open source foundation models are very good and don’t need much compute to run. Recently, OpenAI’s CEO Altman has often highlighted that their models are not based on any one fundamental technical breakthrough, but thousands of little hacks from tinkering- but perhaps this is wrong and a strategic statement to boost the valuation of the company.
Relatedly: “without the gains of stocks that are possible AI winners, the S&P 500 would now be down 2 per cent this year, rather than up 8 per cent.” https://archive.ph/KFMJU
This might suggest that the gains from AI might be distributed more evenly amongst different Big Tech companies and that economies of scope are more important than relatively small technical leads.
Private R&D cannot be protected perfectly because patents expire or industry know-how diffuses to other firms and not all rents from investments can be captured. There was a leaked memo out of Google recently that said that Open source foundation models are very good and don’t need much compute to run. Recently, OpenAI’s CEO Altman has often highlighted that their models are not based on any one fundamental technical breakthrough, but thousands of little hacks from tinkering- but perhaps this is wrong and a strategic statement to boost the valuation of the company.
Relatedly: “without the gains of stocks that are possible AI winners, the S&P 500 would now be down 2 per cent this year, rather than up 8 per cent.” https://archive.ph/KFMJU
This might suggest that the gains from AI might be distributed more evenly amongst different Big Tech companies and that economies of scope are more important than relatively small technical leads.