What Markets Can and Can’t Do for AI Governance

AI changes rapidly, and government institutions are slow to adapt. The people who understand the technology best are, overwhelmingly, the ones building and selling it. Under these conditions, markets have a genuine and important role to play in governance.

It’s a reasonable instinct given how quickly AI technology is evolving, but one should question whether that role is sufficient on its own. The history of frontier technologies, from railroads to financial markets to the internet, consistently tells us that private governance can do things the government cannot, but it cannot do the things that only the government can. The question for AI is how to design a partnership that draws on the strengths of the government and private sector, providing safety without hindering development.