Bertin Martens on The Incongruent Economics of AI

Video & Timestamps

On Thursday, December 5, Bertin Martens joined Markus’ Academy for a conversation on The Incongruent Economics of AI. Bertin Martens is a Senior Fellow at Bruegel.

Watch the full presentation below. You can watch all Markus’ Academy webinars on the Princeton BCF YouTube channel.

Timestamps:

[0:00] Markus’ introduction

[9:52] Exponential cost growth and the productivity growth from AI

[27:50] Three challenges in competition policy

[50:35] Growing tension between the private and social value of data

[1:01:32] EU AI Policy Options

[1:08:58] Non-economic drivers of AI

Summary

• A summary in four bullets

• • The talk highlighted four key incongruencies in the economics of AI: (1) the tension between the growing fixed costs of AI and the productivity growth it will deliver, (2) new questions in competition policy, (3) the challenge that centralized learning poses for individual data rights, (4) the EU’s AI policy dilemmas
  • Even under the most optimistic scenarios investment costs will be a chokepoint for the development of AI. Developers are already working on shifting workloads from upfront investments to operational costs
  • “Co-opetition deals” between startups and big tech foster competition while also reinforcing big tech’s market power. Are they necessary to promote AI development?
  • The EU faces several disadvantages in AI, including the absence of major tech companies and high regulatory and electricity costs. Leveraging open-source and “derived” LLMs could help unlock productivity gains

Click here for the full summary.