In 2018, Pavel Durov the founder of messaging app Telegram, dined with Emmanuel Macron, and for his troubles was later awarded a French passport. Durov should have known that as a French citizen, the state will get you at some stage in your life, and so last week he was arrested in France. Durov’s story is layered with intrigue, and it is not immediately obvious what strategy is being played out here.
At the same time, it is one of a growing number of tales that illustrate what will be one of the great trends of the 21st century, the tension between the power generated by technology and its effect on democracy. Other examples are the disputes between Elon Musk and diverse governments (the UK and Brazil), the difficult passage of the Californian AI Bill, and the apparent Department of Justice antitrust probe into Nvidia.
Equally, technology weighs on many public policy debates now – such as the access to mobile phones in schools, the demands that data centres place on electricity grids and the TikTok-ification of politics.
Technology is a source of wealth, economic growth and power. The historic outperformance of large US technology firms on the stock market is a manifestation of the first effect, while the ways in which governments in what could politely be termed less than democratic governments crave the means by which they can use technology (notably social media) to marshall their citizens is worrying. The countries of the MENA region post the Arab Spring are an example, and of course China is the benchmark here. Democracies at least, have better instincts, and most of them are trying to curb the negative side-effects of the power of technology firms and entrepreneurs.
However, many of them find the burden of oversight frustrating.
One of the striking debates I participated in over the summer was the Rencontres Economiques, where across a range of European policy makers there was great frustration at the dictum ‘America innovates, China replicates and Europe regulates’. In particular, there is frustration in Europe at the relatively shallow pools of capital available to scale up technology firms, but it must be said few politicians are willing to do much to help.
Europeans are vexed with the view that their competence is in regulation, rather than innovation, but I am beginning to wonder if Europe has in fact gotten out in front, notably so with its EU AI Act.
The EU AI Act is only just coming into operation, and it has its flaws, but its strength is that it is based on a broad, clear framework. In contrast, what is starting to become clear in the US is that in the absence of legislation (Senator Chuck Schumer’s AI regulatory initiative is seen as a ‘roadmap’) the effort to curb the power of large social media and AI firms on society will be piece-meal, and as a result much less efficient and more costly (since news of the anti-trust probe into Nvidia it has lost close to USD 700bn in value).
I suspect for instance there will be a lot more civil and corporate legal cases to establish the ownership of data-sets and the access to them by AI engines, as is the case between the New York Times and OpenAI.
At the same time, the lack of a regulatory framework to steer the development of AI and social media risks tension between different arms of the state. In the US the Department of Justice is taking aim at a range of social media sites that are suspected of coming under Russian influence, and the antitrust investigation into Nvidia risks cutting across the Biden administration’s security driven economic policy.
Many of these contradictions and challenges are laid out in an excellent, new book entitled ‘The Tech Coup’ by Marietje Schaake that, whilst written in the US, has a decidedly European tone (the author was an MEP). She argues for a more precautionary approach to the mass roll out of new technologies, with specific limits on technologies like spyware, facial recognition systems and crypto-currencies, and much greater transparency on the uses and finance of AI. These are sensible proposals, but likely the very opposite of what Donald Trump might instigate as a set of policies.
Thus, the tension between democracy and the power of technology will intensify – driven by at least two factors. The first is the geostrategic importance of technology – in particular data consuming and content producing technologies (which explains why the US has been so keen to limit the power of China’s TikTok).
The second, which many legal frameworks have great difficulty in encompassing, is the arrival of the ‘tech bro’, wealthy individuals, who consider themselves above the law, and in some cases, beyond common decency. While some politicians seem dazzled by these ‘bros’.
Democratic states should not bend to their wills and as a rule, democratic states tend to outlast tycoons.
Have a great week ahead, Mike
The Levelling 