Kanter and Khan Prepare to Open Fire on OpenAI and Nvidia

June 7, 2024

The news broke yesterday that the Federal Trade Commission under Lina Khan and the Justice Department’s Antitrust Division under Jonathan Kanter have divvied up the investigations of the nascent AI sector for monopolistic conduct. Khan will lead the examination of Microsoft’s investment in Open AI, maker of Chat GPT. Kanter will lead in the investigation of NVidia, which makes AI chips.

David McCabe in The New York Times sums up progressive thinking on this sector, worrying that “the United States lags behind Europe in regulating artificial intelligence.”

That is perfectly true. It is also true that Europe lags behind the United States, Canada, South Korea, Japan, and China in technological innovation. Europe’s economic growth is negative. It is run by a generation of childless leaders who typify the demographics of their dying societies. But Europe excels in one thing – producing elegantly dressed scolds with elite educations who excel in crafting one regulation and antitrust action after another to cut the butterfly wings off of successful American technology companies.

Now Kanter, Khan and Biden are joining forces in this European effort to degrade the most promising new sector in American technology, one that many economists are looking to generate the next wave of growth. This nascent AI sector is turbulent with players sorting themselves out and jostling for position. It doesn’t matter that Google, Meta, Nvidia and Microsoft are squaring off like monsters in a Godzilla movie to create monumental competition.

But the monsters aren’t the whole story. There is an ecosystem budding up around them – 15,000 AI companies in the United States of varying sizes. Many of AI startups are led by people whose fondest hope is to eventually get rewarded for their innovations by being bought out. That is how a healthy innovation economy works. This is a dynamic and shifting market that will take a long time to settle out. But the seers in the Biden Administration believe they can spot monopoly twenty years out.

The self-immolation of Western technology and capitalism by the West marks an epochal change in world history. Europe leapt ahead of the rest of the world half-a-millennia ago by embracing technology and capitalism. Now European leaders are determined to shrink. Bret Stephens in The Times notes that Europe’s share of the world economy has fallen from 36 percent in 1960 to 22 percent today. Europe’s global economic contribution is expected to plunge to 10 percent in this century.

The United States, however, has maintained its quarter-share of the world economy since the Kennedy Administration. Stephens asks: Think of any leading-edge industry — artificial intelligence, microchips, software, robotics, genomics — and ask yourself (with a few honorable exceptions), where’s the European Microsoft, Nvidia or OpenAI?

Now the progressives who run the Biden Administration are importing Europe’s reflexive anti-Americanism. With policies like these, the honor roll of world-leading, world-beating companies might soon all be Chinese. Such policies are the logical consequence of Tim Wu’s idea that every business needs a policeman at its elbow. Try be creative and innovative with a policeman by your side, tapping his baton to a rhythmic beat.