AI Concentrates Power and Wealth

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Dear friends,

In my letter last week, I alluded to the way AI tends to concentrate power and wealth. This tendency worries me, and I believe it deserves more attention.

The U.S. government has been looking into these winner-take-most dynamics at a few leading technology companies from an antitrust perspective. But the issue is much bigger than that. AI will concentrate power in many industries, including ones that haven’t traditionally relied on high tech, in the hands of a few winners.

For instance, Amazon has come to dominate retailing at the expense of innumerable chains and mom-and-pop stores. Uber, Lyft, and Didi are concentrating power over the taxi industry, which used to support hundreds of thriving local companies. Retailing and taxi service are not traditionally viewed as tech industries.

Driven by digitization and AI, this pattern will play out in many more industries in this decade.

Covid-19 has added further fuel to these dynamics. Some retailers managed the shift to e-commerce. They are collecting data and implementing AI to optimize sales, and they’re becoming more powerful. But others were nearly destroyed as the pandemic choked off foot traffic in brick-and-mortar stores. They don’t have spare dollars to invest in AI, and they’re falling farther and farther behind.

Even as AI creates tremendous wealth, I worry about the growing concentrations of power and wealth, and those who will be left behind. Government will have to step up to address this situation, but significant responsibility also lies with the all of us who conceive, build, and manage this technology. I ask each of you to use your knowledge wisely, in ways that benefit society at large rather than a select few — even if that “select few” is yourself.

Keep learning!



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