WASHINGTON

Sam Altman asks Congress to regulate him, and Congress is charmed

The chief executive of the company that started the panic sat before a Senate committee and agreed with everything. That is worth thinking about slowly.

Sam Altman, the chief executive of OpenAI, testified before a Senate Judiciary subcommittee on May 16 and did something almost no technology executive does: he asked to be regulated. He proposed a federal agency that would license the largest AI models, test them before release, and take the licence away if they proved unsafe. Senators who had spent years being stonewalled by social-media executives were visibly disarmed; one told Altman the hearing was refreshing. The contrast with the tobacco and social-media hearings of the past was drawn by everyone in the room.

It is worth being a little cold about this. When the leading company in a young industry asks the government to require a licence to build what it builds, it is doing something for its own safety as well as the public's. Licences are expensive. Testing regimes are expensive. The company that already has the largest model, the most researchers and a ten-billion-dollar partner can absorb those costs; the startup in a garage that might one day threaten it cannot. Regulation that is sincerely meant to make AI safer can, at the same time, pull the ladder up behind the leader. Both things can be true, and in this case I think both are. Altman's concern reads as genuine, and the regime he proposed would also, not coincidentally, entrench OpenAI. The senators, delighted to meet a chief executive who agreed with them, did not press on the second point. Someone should.

Meanwhile the EU moved on its AI Act, a comprehensive law that would rank AI systems by risk and ban some outright, and which is further along than anything in Washington. The regulatory race between Brussels, which writes rules, and Washington, which holds hearings, is one Brussels is winning by default.

DIPLOMACY

The G7 meets in Hiroshima, and Zelensky arrives in person

The leaders of the world's richest democracies gathered in Hiroshima from May 19, in the city the United States destroyed with a nuclear weapon in 1945, to talk about a war in Europe under the shadow of Russian nuclear threats. They tightened sanctions on Russia, courted India, Brazil and other non-aligned states invited as guests, and turned much of their attention to China's economic coercion, agreeing to "de-risk" rather than decouple. Then Volodymyr Zelensky flew in on a French government plane, his most ambitious diplomatic trip of the war, to lobby the leaders and the guests face to face. He got a warmer reception from the West than from India's Narendra Modi, whom he met for the first time, and the promise, at last, that Ukraine's pilots could be trained on American F-16s.

INDIA

Congress sweeps Karnataka, and the opposition finds a pulse

The Indian National Congress won a decisive victory in the Karnataka state election, with results on May 13 giving it a clear majority and ending the Bharatiya Janata Party's rule in the only southern state it governed. The scale mattered beyond the state: it was the opposition's biggest win in years, in a prosperous state that is home to Bengaluru and the country's technology industry, and it came a year before the national election. The BJP had campaigned on national and religious themes; Congress ran on local prices, jobs and welfare, and won. Siddaramaiah returned as chief minister. Every analyst who had written the opposition off spent the week revising.

TECHNOLOGY

A state bans TikTok; a chatbot gets an app

Montana became the first American state to ban TikTok outright on May 17, signing a law to bar the app from app stores within its borders from next year, a measure TikTok and free-speech groups immediately said they would challenge as unconstitutional and probably unenforceable. The move is a marker of how fast the political mood on the Chinese-owned app has hardened. Separately, OpenAI released a ChatGPT app for the iPhone on May 18, moving the chatbot from a browser tab to the place people actually live, their phone, and pushing past the flood of fake ChatGPT apps that had filled the store in its absence.

IN BRIEF

Title 42; Turkey to a runoff; the Durham report; a debt deal nears

The pandemic-era border rule known as Title 42, which let the US turn away migrants without a hearing, expired on May 11; the feared surge at the southern border was smaller than predicted in the first days. Turkey's presidential election went to a runoff after President Erdogan led the first round on May 14 but fell just short of a majority; the vote on May 28 will decide whether his two-decade rule continues. A long-awaited report by the special counsel John Durham, examining the origins of the FBI's 2016 Trump-Russia investigation, criticised the bureau but produced none of the criminal conspiracy its backers had promised. In Washington, President Biden and Speaker McCarthy inched toward a deal to raise the debt ceiling before the June 1 deadline.

The Column

The incumbent's favourite word is "licence"

When the leader of a young industry asks to be regulated, listen for who the rules would keep out.

By Daniel Reeve

I sat and read the transcript of Sam Altman's Senate testimony twice, because the reaction to it bothered me more than the testimony did. The reaction was relief. Here, at last, was a technology boss who did not stonewall, who agreed that his product was dangerous, who asked for rules. After years of Mark Zuckerberg saying he would follow up in writing, a chief executive volunteering for oversight felt like fresh air, and the senators breathed it in. I understand the relief. I want to complicate it.

I have spent my career inside a regulated-by-platform ecosystem. Salesforce runs a marketplace, the AppExchange, where companies like the ones I have built list their software, and to get on it you pass a security review, meet standards, and pay. I am not against any of that; the review has caught real problems in my own work and made it better. But I have also watched, up close, how a certification regime shapes a market. It raises the floor, which is good. It also raises the cost of entry, which quietly favours whoever is already big enough to pay it without thinking. The two effects are inseparable. Every gate that keeps out the bad actor also keeps out the small one who cannot afford the gate.

Now apply that to Altman's proposal. He asked Congress for a federal body that would license the largest AI models before they could be released, test them, and revoke the licence if they misbehaved. On its face this is public-spirited, and I think he means it. But consider who can comfortably live inside that regime. A company with the biggest model, hundreds of researchers, and a ten-billion-dollar backer can absorb a licensing process the way a large bank absorbs compliance: as a cost of doing business that happens to be fatal to smaller rivals. The open-source model that leaked in March, the one anyone can now run on a good laptop, does not fit inside a licensing regime at all, because there is no single company to hold the licence. A rule that requires a licence to build frontier AI is, among other things, a rule against the version of this technology that is not owned by anyone.

I want to be careful, because the lazy version of this argument is that all regulation is a racket, and I do not believe that. Italy's privacy enforcement in April was regulation and it was aimed at a real harm, in a way any company could comply with. The EU's risk-based AI Act, whatever its flaws, is trying to regulate uses, not licence builders. The distinction I care about is this: rules about what a system may do, and what data it may touch, and who it must answer to, apply to everyone and keep no one out. Rules about who is permitted to build at all are the ones that hand the incumbent a moat and call it safety.

So when the most powerful company in a new field walks into the Senate and asks for a licence regime, the right response is not the relief the senators felt. It is the question they did not ask: who, exactly, would this keep out, and would any of them have grown up to challenge you? A chief executive who agrees with the committee is pleasant. He is also, still, running a company, and the most durable thing a company can own is not a product. It is a rule that only it can afford to obey.

The Ledger

Altman asks Congress for a licensing regime; the EU AI Act advances; ChatGPT gets an iPhone app; Montana bans TikTok. The regulatory shape of the industry is being drawn now, and it is being drawn largely by the incumbents who will live inside it.

Data centers & power

Nvidia reports on May 24. Its data-centre guidance is the single number the market most wants, because it is the clearest read on how real the AI build-out is.

Rates

Fed on hold at 5.00-5.25 percent, watching the debt ceiling. A deal to avoid default is close but not signed; the Treasury's June 1 deadline is the hard edge.

Real estate

Regional-bank stress has eased since First Republic but not cleared. US 30-year mortgage 6.39 percent (May 18). Office loans remain the watch item.

India tech

Congress's Karnataka win, in the home state of the technology industry, resets the national picture a year before the general election. The opposition, written off for a decade, is suddenly a factor.

What we called wrong

In No. 3 we wrote that Google, cutting jobs while calling AI its "biggest opportunity," might be behind. Its DeepMind consolidation and steady product cadence since suggest we underrated how much research depth still counts. Noted, provisionally; the race is young.

The Back Page

Tattoo

Sweden won the Eurovision Song Contest on the night of May 13, in Liverpool, a city standing in for Ukraine, which won last year and could not safely host. Loreen, who had won once before in 2012, took it again with a song called "Tattoo," becoming only the second performer in the contest's history to win twice and drawing Sweden level with Ireland on seven victories overall. The whole strange, glittering spectacle was a kind of collective decision: unable to hold the party in Kyiv, Europe held it in a English port and painted it blue and yellow, and the Ukrainian acts appeared by video from a country at war, and forty thousand people in an arena sang along to a language most of them did not speak. It is a silly contest. It is also, once a year, the closest thing the continent has to a family that all shows up.