That said, it strikes me that the actual limiting factor is fab capacity not nvidia's designs and we probably need to lift the monopolies preventing competition there if we want to reduce prices.
Why do you think these private entities are willing to invest the massive capital it takes to keep the frontier advancing at that rate?
> I do want to limit the amount we reward NVIDIA for calling the shots correctly to maximize the benefit to society
Why wouldn't NVIDIA be a solid steward of that capital given their track record?
Because whether they make 100x or 200x they make a shitload of money.
> Why wouldn't NVIDIA be a solid steward of that capital given their track record?
The problem isn't who is the steward of the capital. The problem is that economically efficient thing to do for a single company is (given sufficient fab capacity, and a monopoly) to raise prices to extract a greater share of the pie at the expense of shrinking the size of the pie. I'm not worried about who takes the profit, I'm worried about the size of the pie.
It's not a certainty that they 'make a shitload of money'. Reducing the right tail payoffs absolutely reduces the capital allocated to solve problems - many of which are risky bets.
Your solution absolutely decreases capital investment at the margin, this is indisputable and basic economics. Even worse when the taking is not due to some pre-existing law, so companies have to deal with the additional uncertainty of whether & when future people will decide in retrospect that they got too large a payoff and arbitrarily decide to take it from them.
Of course I agree I'm going to stop marginal investments from occurring into research into patent-able technologies by reducing the expect profit. But I'm going to do so very slightly because I'm not shifting the expected value by very much. Meanwhile I'm going to greatly increase the investment into the existing technology we already have, and allow many more people to try to improve upon it, and I'm going to argue the benefits greatly outweigh the costs.
Whether I'm right or wrong about the net benefit, the basic economics here is that there are both costs and benefits to my proposed action.
And yes I'm going to marginally reduce future investments because the same might happen in the future and that reduces expected value. In fact if I was in charge the same would happen in the future. And the trade-off I get for this is that society gets the benefit of the same actually happening in the future and us not being hamstrung by unbreachable monopolies.
I think you're shifting it by a lot. If the government can post-hoc decide to invalidate patents because the holder is getting too successful, you are introducing a substantial impact on expectations and uncertainty. Your action is not taken in a vacuum.
> Meanwhile I'm going to greatly increase the investment into the existing technology we already have, and allow many more people to try to improve upon it, and I'm going to argue the benefits greatly outweigh the costs.
I think this is a much more speculative impact. Why will people even fund the improvements if the government might just decide they've gotten too large a slice of the pie later on down the road?
> the trade-off I get for this is that society gets the benefit of the same actually happening in the future and us not being hamstrung by unbreachable monopolies.
No the trade-off is that materially less is produced. These incentive effects are not small. Take for instance, drug price controls - a similar post-facto taking because we feel that the profits from R&D are too high. Introducing proposed price controls leads to hundreds of fewer drugs over the next decade [0] - and likely millions of premature deaths downstream of these incentive effects. And that's with a policy with a clear path towards short-term upside (cheaper drug prices). Discounted GPUs by invalidating nvidia's patents has a much more tenuous upside and clear downside.
[0]: https://bpb-us-w2.wpmucdn.com/voices.uchicago.edu/dist/d/312...
You're massively increasing uncertainty.
> the same would happen in the future. And the trade-off I get for this is that society gets the benefit
Why would you expect it would ever happen again? What you want is an unrealized capital gains tax. Not to nuke our semiconductor industry.
Your claim that removing a profit motivation will increase investment is flat out wrong. Everything else crumbles from there.
I do think there are some serious IP issues, as IP rules can be hijacked in the US, but that means you fix those problems, not blow up IP that was rightfully earned
They are leaders in solar and EVs.
Remember how Japan leapfrogged the western car industry, and six sigma became required reading for managers in every industry?
Past performance is not indicative of future results.
Under your idea, we’ll try a badly broken economic philosophy again. And while we’re at it, we will completely stifle investment in innovation.
Lol it's not "monopolies" limiting fab capacity. Existing fab companies can barely manage to stand-up a new fab in different cities. Fabs are impossibly complex and beyond risky to fund.
It's the kind of thing you'd put government money to making but it's so risky government really don't want to spend billions and fail so they give existing companies billions so if they fail it's not the governments fault.
One of the things that the post mentioned was the meager profit margin that the companies made during this time.
But the thing is that this set the America auto and aviation industry up to rule the world for decades.
A government going to a company and saying 'we need you to produce this product for us at a lower margin thab you'd like to' isn't the end of the world.
I don't know if this is one of those scenarios but they exist.
[0] https://www.construction-physics.com/p/how-to-build-300000-a...
They are an intellectual property company holding the rights on plans to make graphic cards, not even a company actually making graphic cards.
The government could launch an initiative "OpenGPU" or "OpenAI Accelerator", where the government orders GPUs from TSMC directly, without the middleman.
It may require some tweaking in the law to allow exception to intellectual property for "public interest".
Reflexively, I count that harm as a feature. I don't like private capital markets because I've been screwed by private capital on multiple occasions.
But you are right: I don't understand how these actions would harm. So please do expand your concerns.
private capital is absolutely the driving force for the vast majority of innovations since the beginning of the 20th century. public capital may be involved, but it is dwarfed by private capital markets.
Private nuclear research is heavily dependent on governmental contracts to function. Solar was subsidized to heck and back for years. Public investment does work, and does make a didference.
I would even say governmental involvement is sometimes even the deciding factor, to determine if research is worth pursuing. Some major capital investors have decided AI models cannot possibly gain enough money to pay for their training costs. So what do we do when we believe something is a net good for society, but isn’t going to be profitable?
You want to punish NVIDIA for calling its shots correctly? You don't see the many ways that backfires?