
Originally Posted on Substack
There is recent talk about taxing AI, which is probably a non-starter with policymakers adverse to doing anything to stand in the way of tech companies. But the tax idea isn’t totally crazy because AI these days is, for all practical purposes, a major tax on society.
Although AI has many beneficial uses, it remains unclear whether AI would be viable in the market if it weren’t artificially propped up by constant cash infusions by big gambler investors and by evading costs by sloughing them off on everyone else.
Unlike other technologies such as search, AI is tremendously expensive. There are many uses of AI that might not be sustainable in the market without venture capitalists pumping in massive investments. AI companies are shoving their AI in our faces at every turn, throwing it up against the wall in a frantic effort and hope that something sticks.
There certainly will be uses of AI that will provide more benefit than cost, but it’s hard to figure that out when there’s so much distortion of the market. Normally, the market would work as a mechanism of survival of the fittest, weeding out business models that don’t really work. But AI is growing today not because it is fit for survival; it’s being propped up.
AI imposes tremendous costs which operate as a tax on society. These are costs that AI companies are externalizing on all of us. Examples include:
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