It’s Only Money

Nobody Wants to Go Second

“Everyone agrees we should slow down. Right after the other guy does.”

Some of the loudest warnings about artificial intelligence are coming from the people building it. That seems strange, but it really isn't.

The AI race has become a classic game-theory problem. Everyone might be better off with a slower, more deliberate pace, but that only works if everyone else agrees. The United States can't assume China will wait. China can't assume the United States will wait. And no technology company wants to discover that fiscal discipline was a wonderful idea just as its competitor disappears over the horizon.

So they keep building and spending.

This is happening while governments are already carrying enormous amounts of debt. There is a growing hope that AI-driven productivity might eventually produce enough economic growth to make some of that debt easier to manage.

Maybe it will.

But there's something wonderfully circular about borrowing enormous amounts of money to win the race for a technology we're hoping will help solve the debt problem.

Normally, markets eventually impose discipline. Money gets expensive, bad investments die, and spending slows. But what happens when slowing down is no longer simply an economic decision? What if falling behind is considered a national-security risk?

Then the question isn't whether we can afford to keep going.

It's whether we can afford to stop.

And nobody wants to go second.

Pat Volk

Resolute Wealth Management