andrew bailey

Bank of England warns AI stock bubble rivals 2000 dotcom peak

Share valuations based on past earnings have also reached their highest levels since the dotcom bubble 25 years ago, though the BoE noted they appear less extreme when based on investors’ expectations for future profits. “This, when combined with increasing concentration within market indices, leaves equity markets particularly exposed should expectations around the impact of AI become less optimistic,” the central bank said.

Toil and trouble?

The dotcom bubble offers a potentially instructive parallel to our current era. In the late 1990s, investors poured money into Internet companies based on the promise of a transformed economy, seemingly ignoring whether individual businesses had viable paths to profitability. Between 1995 and March 2000, the Nasdaq index rose 600 percent. When sentiment shifted, the correction was severe: the Nasdaq fell 78 percent from its peak, reaching a low point in October 2002.

Whether we’ll see the same thing or worse if an AI bubble pops is mere speculation at this point. But similar to the early 2000s, the question about today’s market isn’t necessarily about the utility of AI tools themselves (the Internet was useful, afterall, despite the bubble), but whether the amount of money being poured into the companies that sell them is out of proportion with the potential profits those improvements might bring.

We don’t have a crystal ball to determine when such a bubble might pop, or even if it is guaranteed to do so, but we’ll likely continue to see more warning signs ahead if AI-related deals continue to grow larger and larger over time.

Missouri AG claims Google censors Trump, demands info on search algorithm

andrew bailey, Google, Policy / Beth Washington / October 25, 2024

In 2022, the Republican National Committee sued Google with claims that it intentionally used Gmail’s spam filter to suppress Republicans’ fundraising emails. A federal judge dismissed the lawsuit in August 2023, ruling that Google correctly argued that the RNC claims were barred by Section 230 of the Communications Decency Act.

In January 2023, the Federal Election Commission rejected a related RNC complaint that alleged Gmail’s spam filtering amounted to “illegal in-kind contributions made by Google to Biden For President and other Democrat candidates.” The federal commission found “no reason to believe” that Google made prohibited in-kind corporate contributions and said a study cited by Republicans “does not make any findings as to the reasons why Google’s spam filter appears to treat Republican and Democratic campaign emails differently.”

First Amendment doesn’t cover private forums

In 2020, a US appeals court wrote that the Google-owned YouTube is not subject to free-speech requirements under the First Amendment. “Despite YouTube’s ubiquity and its role as a public-facing platform, it remains a private forum, not a public forum subject to judicial scrutiny under the First Amendment,” the US Court of Appeals for the 9th Circuit said.

The US Constitution’s free speech clause imposes requirements on the government, not private companies—except in limited circumstances in which a private entity qualifies as a state actor.

Many Republican government officials want more authority to regulate how social media firms moderate user-submitted content. Republican officials from 20 states, including 19 state attorneys general, argued in a January 2024 Supreme Court brief that they “have authority to prohibit mass communication platforms from censoring speech.”

The brief was filed in support of Texas and Florida laws that attempt to regulate social networks. In July, the Supreme Court avoided making a final decision on tech-industry challenges to the state laws but wrote that the Texas law “is unlikely to withstand First Amendment scrutiny.” The Computer & Communications Industry Association said it was pleased by the ruling because it “mak[es] clear that a State may not interfere with private actors’ speech.”

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