Bill GurleyThis week, at an event, a well known venture capitalist asked the audience to shout out a sentence they would normally not find exciting. GurleyHowever, the audience members responded with a resounding “yes” to this statement.

“Regulation is the friend of the incumbent!” They shouted.

Gurley Speaking at the All-In Summit in Los Angeles is a tech-focused event. All-In Podcast. He entitled his presentation “2,851 Miles,” What is the distance from Silicon Valley to Washington, D.C.?

Gurley—who as a general partner at VC firm Benchmark has invested in the likes of Uber, Grubhub, and Zillow—warned about the dangers of “regulatory capture.” He describes his own experience of butting up against He praised innovative startups and warned against its role in the present. in The space of artificial Intelligence

George Stigler (1982 Nobel Prize winner) was quoted to explain his concept. in Economics, who said? “as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.” Other words, the special interest of a group is given priority over the interest of the entire public. 

Gurley Tropos Networks was the subject of his experience. in Benchmark Investments. He described how mayors were initially excited by the company’s wireless mesh networking technology, hoping to use it to offer municipal wi-fi services. 

“There were hundreds of mayors all over the country that wanted to provide free wi-fi service across their downtown area,” You can also read about the importance of this in our article Gurley. “It would help with public safety, economic development, and of course the digital divide.” 

The idea is not good, he said. “collided with commercial interest,” In particular, incumbents who have powerful lobbyists. He said that in Philadelphia, Verizon and Comcast employed lobbyists to pass bills through the Pennsylvania Legislature, which would have protected their positions against upstart competitors like Tropos. Soon, other states adopted similar regulations. 

Regulation capture risk in A.I.

Gurley Here are a few more examples. regulatory capture before highlighting a case that’s more relevant today: A.I. 

He shared onscreen an a New York Times article The May Issue “OpenAI’s Sam Altman Urges A.I. Regulation in Senate Hearing.” 

“Sam’s just getting started,” Gurley OpenAI CEO Sam Altman was referred to in the statement. “He wants regulation, too.” OpenAI, maker of A.I. ChatGPT, GPT-4 and OpenAI are seen by many as being ahead of their competitors.

“There’s a really scary thing in this A.I. space,” Gurley said. “The incumbents that are running to meet with…the government are spreading something that I don’t think is accurate or fair: They’re spreading a negative open-source message, and I think it’s precisely because they know it’s their biggest threat.”

If large language models (LLMs)—which power A.I. chatbots like ChatGPT—are open source, the reasoning goes, more startups will be able to innovate and challenge incumbents. OpenAI’s and Google’s LLMs (and its ChatGPT-rival Bard) do not allow for public scrutiny.

Tesla CEO Elon M Musk cofounded OpenAI, but drifted from it later. tweeted in February: “OpenAI was created as an open source (which is why I named it ‘Open’ AI), non-profit company to serve as a counterweight to Google, but now it has become a closed source, maximum-profit company effectively controlled by Microsoft. Not what I intended at all.”

Altman and Microsoft have denied this characterization, and Ilya Sutskever, OpenAI’s chief scientist and cofounder, shared his thoughts on the reasons for the switch away from open source in The Verge interviews The Verge in March: 

“We were wrong. Flat out, we were wrong. If you believe, as we do, that at some point, A.I.—AGI—is going to be extremely, unbelievably potent, then it just does not make sense to open-source. It is a bad idea…I fully expect that in a few years it’s going to be completely obvious to everyone that open-sourcing A.I. is just not wise.”

He added that “at some point it will be quite easy, if one wanted, to cause a great deal of harm with those models.” However, he added that “the safety side is not yet as salient a reason as the competitive side,” The following are some examples of how to get started: “there are many, many companies who want to do the same thing.”

Altman himself told You can find out more about it here. in May, “We don’t wanna slow down smaller startups. We don’t wanna slow down open source efforts,” While adding, “We still need them to comply with things.”

Marc Andreessen has railed against the VC company Andreessen Horowitz. against regulatory capture in A.I. space, warning in June You can also find out more about the following: “CEOs who stand to make more money if regulatory barriers are erected that form a cartel of government-blessed AI vendors protected from new startup and open source competition.” 

Gurley You can also read about the importance of this in our article Llama 2 Meta is one of the leading providers of Meta. open-source LLMs, “is actually super interesting.” 

Silicon Valley notables include Andreessen, YCombinator founder Paul Graham, Greylock partner Reid Hoffman, and others have signed A statement supporting Llama 2 would read: 

“We support an open innovation approach to AI. Responsible and open innovation gives us all a stake in the AI development process, bringing visibility, scrutiny and trust to these technologies. Opening today’s Llama models will let everyone benefit from this technology.”

The presentation ended with a question. Gurley You should be warned. “if you care about prosperity and you kill innovation, you’re going to kill prosperity.”

 He concluded his speech by referring to its beginning. “2,851 Miles” title. 

“The reason Silicon Valley has been so successful,” he said, “is because it’s so f***ing far away from Washington, D.C.