Exploring the implications of the UK’s AI Opportunities Action Plan and its potential impact.
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The future of AI governance in the UK: A call for strategic investment
Recently, UK Prime Minister Keir Starmer unveiled an ambitious “AI Opportunities Action Plan” aimed at significantly enhancing the nation’s artificial intelligence (AI) capabilities. This plan includes a substantial multibillion-pound investment from the government, alongside commitments totaling £14 billion ($17.3 billion) from various tech firms.
The overarching objective is to amplify AI computing power under public control by a staggering 20-fold by the year 2030. Additionally, the initiative seeks to integrate AI into public services to enhance efficiency and reduce operational costs through automation.
The challenges of AI governance
However, the successful governance of AI in the public interest necessitates a departure from the current unbalanced dynamics between government entities and digital monopolies. At present, public authorities often engage in lucrative, unstructured agreements with technology companies, devoid of any conditionalities. This lack of oversight leaves governments grappling with the market failures that arise from these partnerships.
While the potential of AI to improve lives is immense, the prevailing approach does not adequately position governments for success. Economists are divided on the economic implications of AI, with some, like Nobel laureate Daron Acemoglu, predicting a modest productivity boost of only 0.07 percent annually over the next decade. In contrast, AI advocates such as Philippe Aghion and Erik Brynjolfsson foresee productivity growth that could be up to 20 times higher, with estimates suggesting an annual increase of 1.3 percent or even a one-off surge of 14 percent within months.
Addressing vested interests
The discourse surrounding AI is often clouded by vested interests, raising concerns about inflated projections and a lack of transparency. For instance, the appointment of the CEO of Microsoft UK as chairman of the UK Department for Business and Trade’s Industrial Strategy Advisory Council raises eyebrows regarding potential conflicts of interest. It is crucial to recognize that AI should not merely be treated as a sector in need of support, but rather as a transformative technology that can impact all sectors of the economy.
To navigate this landscape effectively, governments must foster a decentralized innovation ecosystem that prioritizes the public good. Policymakers need to be acutely aware of the risks associated with dominant platforms like Amazon and Google, which have historically exploited their positions to extract value from users. If AI systems are not governed properly, they could replicate these patterns, leading to detrimental outcomes such as value extraction and declining information quality.
Rethinking public investment in AI
As the Starmer government moves forward, it is imperative to rethink its strategy regarding AI investments. Instead of acting as a “market fixer” that intervenes post-factum to address the excesses of AI companies, the government should proactively shape the AI market. This involves avoiding the allocation of billions to vaguely defined initiatives lacking clear objectives. Public funds should not be funneled into the hands of foreign tech giants, as this risks diverting taxpayer money and ceding control over vital public-sector data.
Moreover, the government must recognize that relying solely on AI investment to enhance public services could lead to their deterioration. AI should complement, not replace, genuine investments in public-sector capabilities. Implementing mandatory algorithmic audits can provide transparency regarding how AI systems monetize user attention, ensuring accountability in the deployment of these technologies.
Building a competitive AI ecosystem
To cultivate a robust AI ecosystem, the UK must prioritize support for homegrown entrepreneurs and initiatives over dominant foreign corporations. Public funding should act as an “investor of first resort” to assist small- and medium-sized enterprises (SMEs) in overcoming initial barriers to growth. Additionally, as AI platforms benefit from the digital commons, implementing a digital windfall tax could help fund open-source AI and public innovation.
Ultimately, the UK needs to establish its own public AI infrastructure, guided by a public-value framework similar to the EuroStack initiative in the European Union. AI should be regarded as a public good, not a corporate tollbooth. The guiding principle for the Starmer government should be to serve the public interest, addressing the entire supply chain from software and computing power to chips and connectivity. By investing in the creation and organization of existing assets, the UK can build a viable, competitive AI ecosystem that genuinely serves society.
