Nationalize AI - Part 3 - Corporate Power

This is Part 3 in a multipart series on nationalizing AI:

• Nationalize AI - Part 1 - Defining The Problem
• Nationalize AI - Part 2 - Labor
• Nationalize AI - Part 3 - Corporate Power
• Nationalize AI - Part 4 - Inefficient
• Nationalize AI - Part 5 - Superiority
• Nationalize AI - Part 6 - Conclusion

Corporate Power

Current Consolidation

One of the largest current issues globally is the massive consolidation and increase of corporate power.

There’s a lot of reasons for this, but one of the main ones has been the increasing number of mergers:

(Number of acquisitions per year from 1985 - 2023)

Why is Corporate Power an Issue Already?

At a high level, it is pretty easy to understand the literal consolidation - regarding # of companies that control certain industries - as was just covered. The problem does not stop there, however. With more and more power, and less competition; corporations are not using their power to better society, they are using it irresponsibly to abuse people.

Let’s walk through general corporate abuse, big tech’s existing abuse, and the abuses of current AI technology.

General Corporate Abuse

Corporations do anything for a dollar. They do not care about anyone except their C-suite and the shareholders. Corporations and the rich are more than happy with harming you, killing you, bankrupting you, killing your job, stealing from you - just for their next buck. I do plan on writing about a specific part of this at some point in its own post - but let’s briefly go through these:

1. Turing Pharmaceuticals’ Price Hike
   • In 2015, Turing Pharmaceuticals, led by CEO Martin Shkreli, increased the price of the life-saving drug Daraprim by 5,000%, making it unaffordable for many patients.
2. Tobacco companies
   • Despite clear scientific evidence linking smoking to cancer and other diseases, tobacco companies publicly denied these risks, lying to everyone about the dangers of their products.
   • Targeted Marketing: They aggressively marketed cigarettes to vulnerable populations, including children and adolescents, to cultivate lifelong customers, often using themes of glamour and rebellion to appeal to youth.
   • “The tobacco industry continues to amplify misinformation in the media, including the recent egregious attacks on tobacco control organizations[1]. The tobacco industry is the only one that stands to benefit by undermining tobacco control organizations.” Source
   • These actions, over decades (and they continue), are the definition of killing people for money. By the way, tobacco stocks pay some of the highest dividends to shareholders in the stock market.
3. Lead in Gasoline
   • Many years ago, lead was added to gasoline despite the fact the companies knew that it was a known poison.
   • For years, these corporations created fake studies, spent tens of millions on legal fights, created propaganda and marketing campaigns – so they could profit from costing a massive amount of harm. Source
   • “A century of leaded gasoline has taken millions of lives and to this day leaves the soil in many cities from New Orleans to London toxic.” Source
   • Long-Term Effects on Survivors: Millions of people exposed to lead during childhood suffer lasting impacts, including reduced IQ, diminished cognitive function, lower socioeconomic status compared to their parents, and an increased risk of mental health issues. These effects hinder their quality of life, career achievements, and overall well-being. Source 1 Source 2

These are not even the biggest examples, or all of them - obviously - here’s a short list of some of the other biggest instances: Purdue Pharma knowingly fueled the opioid crisis, BP caused the Deepwater Horizon spill by reducing safety measures, Nestlé exploited water resources, the asbestos industry knowingly sold deadly products, Volkswagen cheated emissions tests, Enron committed massive fraud, Lehman Brothers caused the 2008 crash, Wells Fargo created fake accounts, Ford sold cars with fatal defects, Equifax exposed personal data, Turing Pharma exploited drug prices, Amazon monitored and exploited workers, Coca-Cola drained water in drought zones, and Shell suppressed climate research, etc.

Big Tech’s Existing Abuse

Beyond abuse in many non-tech industries - another even larger problem is with the big technology companies controlling technologies that are also more powerful than any technology that has come before.

In particular - the technology companies have been horrific in this regard - and there’s been a very very slow regulatory response or really any accountability for some massive wrongdoings, including (but not limited to):

• App Store rent seeking
  • The fees on the App Store(s) are the definition of rent seeking.
• The top social media sites are heavily consolidated and owned by the most powerful entities in the world, as shown in this chart:

Meta owns the top two and 3 of the top 9 social media sites. Not only this - Microsoft owns 1 of them, and the richest person in the world (Musk) owns 1 as well. Why have we all simply accepted that essentially all of our consumed social is owned by the biggest corporations and people in the world? By the way, this does not even count Threads (owned by Meta) because its a chart from 2023. How has the government not forced, at least, Meta to divest Facebook and Instagram already??

This power has been wielded for extremely nefarious purposes - such as election interference, general misinformation, massive foreign interference in our society causing unrest, selling of data, substantial increase in depression of adolescents, etc. Social media is the most powerful technology, that you’re allowed to privately own, ever.

Existing AI Abuse

By the way, the abuse of AI for profit is already happening. Let’s walk through a few examples, check out the links on each list item for more information on one specific instance:

1. Deepfakes in Revenge Porn
   • Many cases have emerged where AI-generated deepfake technology was used to create fake explicit videos of individuals, often women, and shared without consent.
2. Voice Cloning in Fraud
   • In 2021, cybercriminals used AI-based voice cloning to impersonate a company director in the United Arab Emirates, deceiving a bank manager into transferring $35 million. This sophisticated heist involved cloning the director’s voice to authorize fraudulent transactions.
3. AI-Generated Harassment
   • Some individuals use chatbots, such as GPT-based systems, to generate hundreds of abusive messages or harass others online, overwhelming victims with toxic content.
4. Disinformation Campaigns
   • Elections in many countries have been influenced to the point of changing the result, AI is being used already to subvert democracy.
5. AI-Powered Stalking
   • Tools like Clearview AI, which scrapes social media and other online platforms, have been misused by private individuals for stalking, identifying, and tracking people without their consent.
6. AI in Child Exploitation
   • Offenders are utilizing AI tools to create hyper-realistic, sexually explicit images of children. Law enforcement agencies are intensifying efforts to combat this misuse, as AI-generated child sexual abuse materials complicate the identification of real victims and pose significant challenges in prosecuting offenders.
7. AI being used to automatically rejecting healthcare claims
   • UnitedHealthcare is charged with using an AI system with a 90% error rate to deny elderly patients medically necessary post-acute care, forcing early discharges and financial burdens; or worse.
8. Many instances where AI is convincing people to do extremely bad things.
   • Chatbot ‘encouraged teen to kill parents over screen time limit’
   • NYC’s AI chatbot was caught telling businesses to break the law. The city isn’t taking it down
   • Mother says AI chatbot led her son to kill himself in lawsuit against its maker
   • A widow is accusing an AI chatbot of being a reason her husband killed himself

And these are just some of the abuses.

While nationalization won’t fix all of these things, nationally owned AI can help fight against bad actors instead of being used by the bad actors (to profit the richest corporations and people on the planet). A lot (the majority?) of these abuses use AI developed and deployed right here in the USA.

The Power of AI

What is particularly interesting about AI at the scale of some of the systems we have seen recently is that they have an extremely large barrier to entry for any potential competitors. Could any non-massive company/individual afford to buy thousands of GPUs and pay the energy to train a model that is even remotely competitive with the existing models? Of course not. There is some nuance here due to the fact that some components created by some of the corporations are open source, but that fact largely doesn’t change much (although I do think this presents issues that I will cover in the next article in the series).

The current power of AI and the inevitable power of AI is extreme. Even beyond the power of labor automation (covered in Part 2) - the applications in weaponry, impersonation, mass social manipulation, etc make AI a large enough risk to not leave it in the hands of the tech companies that have already let us down and hurt society. For example, any AI weapon will not be a normal weapon - they will be almost assuredly unbeatable, it’ll be like the Manhattan Project all over, but accelerating a lot faster and far more dangerous. More on weapons a little later.

For context, remember, no private company owns or has ever owned even a singular nuclear weapon, and they cannot be deployed by a corporation.

It will not be long before whoever controls the most powerful AI systems will have the ability to control every other institution, organization, and individual. And in the meantime, the increasing power the corporations control can be used to prevent competition, sway public opinion, prevent backlash & regulation, censor citizens & journalists, etc.

As powerful as owning social media is, AI is exponentially more powerful. By the way, the companies who are currently leading, and are far ahead, in AI - also own social media networks. That combo is even more terrifying.

The leeway ceded with social media must not be repeated with something exponentially riskier. For all of the above reasons, I believe I have demonstrated the risks of corporately owned AI.

Why Nationalization Solves For This

Even ignoring the points made in Part 2 (Labor) - the points here alone, I believe, demonstrate the risks of maintaining private ownership of AI and therefore the need for nationalization.

In the USA, corporations are legally much harder to hold accountable for abuses than the federal government. The Bill of Rights directly limits government power and ensures protections for individuals, such as freedom of speech, due process, and protection against unreasonable searches and seizures. These constitutional guarantees provide a legal framework for holding the government accountable in ways that simply don’t apply to corporations, which are primarily governed by statutory laws and regulations rather than constitutional mandates.

This fundamental difference underscores why nationalization can provide greater oversight and public accountability. This is not to say the government is held to account enough, by the way - this is not the case but here are some reasons why they are held to account far more than corporations:

1. Fiduciary Duty: Corporations prioritize shareholders, not public welfare, limiting accountability.
2. Limited Liability: Corporate structures shield individuals from personal accountability.
3. Lobbying Power: Corporations influence regulations, often weakening enforcement.
4. Opacity: Corporations operate privately, unlike the government, which is subject to transparency laws like FOIA.
5. Legal Resources: Corporations use vast resources to delay or avoid accountability.
6. Public Oversight: The federal government is subject to checks, balances, and public scrutiny that corporations avoid.
7. Examples: Cases like Enron, Purdue Pharma, and the widespread and extreme corporate misconduct during the financial crisis show how corporations and those who run them evade meaningful penalties, even when their actions cause massive and unprecedented harm.

AI’s immense and accelerating power should be controlled by an entity that the people collectively own and can oversee with transparency. In the USA, that entity is the federal government; lest the entities who control it, control us.

In the next part of the series, I will continue making the nationalization case by talking about how the market is not the most efficient way to allocate resources or drive innovation in AI, especially when public welfare and safety are at stake: Nationalize AI - Part 4 - Inefficient