Good point. I think both AI companies and hardware makers should pay for the damage they caused to us here.
They act as a de-facto monopoly and milk us. Why is this allowed?
Good point. I think both AI companies and hardware makers should pay for the damage they caused to us here.
They act as a de-facto monopoly and milk us. Why is this allowed?
It's a business with huge up-front capital expenses and typically very low margins. Supply is scaling up slowly because it's hard, and if you overshoot, you go out of business.
Nobody is "allowing" this. It's a natural property of being both advanced technology and a commodity at the same time.
The strange deals on the entire future output are what was allowed. Try to do the same thing with onions and the government understands you are a criminal.
https://en.wikipedia.org/wiki/Onion_Futures_Act
That is quite the amusing read but it seems like a poorly constructed law. It wasn't futures themselves that were the problem there. The duo engaged in blatant market manipulation and severely disrupted part of the food supply in the process.
And now OpenAI is engaged in blatant market manipulation and severely disrupted the entire world's DRAM supply.
Cornering the market with the intent to flip the goods is not quite the same as cornering the market because you actually want the goods and intend to use them yourself.
And it just so happens that many people will now have to use OpenAI’s products because they can’t get enough RAM to run a local LLM. What a coincidence.
Right, the second was a conspiracy to form a monopoly.
It has the makings of a natural monopoly, except its compounded by RAM cartels colluding to shut out the last of the competitors.
Recently they had a second price fixing lawsuit thrown out (in the US).
Now with the state of things I'm sure another lawsuit will arrive and be thrown out because the government will do anything to keep the AI bubble rolling and a price fixing suit will be a threat to national security, somehow. Obviously thats speculative and opinion but to be clear, people are allowing it. There are and more so were things that could be done.
Because for the last 60 years we've allowed big business to buy and hollow out our legal and education systems.
Allowed? We live in a neoliberal world where corporate monopolies / oligopolies aren’t even remotely regulated. If you try to do even the gentlest regulation of companies people scream about communism and totalitarianism. Unless the regulation serves the monopolies by making it harder to enter the market.
It started with raegan, and even parties on the “left” in the west believe in it with very few exceptions.
> We live in a neoliberal world where corporate monopolies / oligopolies aren’t even remotely regulated. If you try to do even the gentlest regulation of companies people scream about communism and totalitarianism. Unless the regulation serves the monopolies by making it harder to enter the market.
The thing that enables this is pretty obvious. The population is divided into two camps, the first of which holds the heuristic that regulations are "communism and totalitarianism" and this camp is used to prevent e.g. antitrust rules/enforcement. The second camp holds the heuristic that companies need to be aggressively "regulated" and this camp is used to create/sustain rules making it harder to enter the market.
The problem is that ordinary people don't have the resources to dive into the details of any given proposal but the companies do. So what we need is a simple heuristic for ordinary people to distinguish them: Make the majority of "regulations" apply only to companies with more than 20% market share. No one is allowed to dump industrial waste in the river but only dominant companies have bureaucratic reporting requirements etc. Allow private lawsuits against dominant companies for certain offenses but only government-initiated prosecutions against smaller ones, the latter preventing incumbents from miring new challengers in litigation and requiring proof beyond a reasonable doubt.
This even makes logical sense, because most of the rules are attempts to mitigate an uncompetitive market, so applying them to new entrants or markets with >5 competitors is more likely to be deleterious, i.e. drive further consolidation. Whereas if the market is already consolidated then the thicket of rules constrains the incumbents from abusing their dominance in the uncompetitive market while encouraging new entrants who are below the threshold.
Arguably a more efficient approach might just be to have a tax that adds on to corporate tax incrementally for every % of market share a company has above say 7-8%. Then dominant companies are incentivised to re-invest in improving their efficiencies rather than just buying/squeezing out competitors. A more evenly spread market would then, as a result, be against regulations that make smaller market participants less competitive, as they'd all be in relatively less table positions.
First, on the surface, this sounds like a terrible idea. Almost all ideas that I see on HN about economics fail with even the tiniest amount of common sense.
As a counterpoint: Look at very high value goods, like jet engines and MRI machines. I went for an MRI the other day and wondered to myself (then asked an LLM) what the international MRI market looks like. They are vanishingly small number of manufacturers and are usually dominated by a few international players. How are you going to apply this tax to non-domiciled (international) companies? Also, companies like General Electric, Mitsubishi Heavy, and Seimens are enormous and incredibly diverse. This idea falls apart quickly.
> Arguably a more efficient approach might just be to have a tax that adds on to corporate tax incrementally for every % of market share a company has above say 7-8%.
How is this more efficient? You'd still be applying all of the inefficient regulatory rules intended to mitigate a lack of competition to the smaller companies trying to sustain a competitive market, and those rules are much more deleterious for smaller entities than higher tax rates.
If you have $100M in fixed regulatory overhead for a larger company with $10B in profit, it's only equivalent to a 1% tax. The same $100M for a smaller company with $50M in profit is a 200% tax. There is no tax rate you can impose on the larger company to make up for it because the overhead destroys the smaller company regardless of what you do to the larger one.