Empire AI: NYC Boondoggle déjà vu?

TLDR: New York governor Kathy Hochul has proposed the creation of an artificial-intelligence (AI) computing center called “Empire AI” to make New York a global leader in AI innovation. The plan involves a consortium of universities, nonprofits, entrepreneurs, and other investors, with $275 million in state funds and $125 million from private partners. However, past attempts by New York State to capitalize on tech booms have resulted in cronyism, wasted tax dollars, and unfulfilled promises. Experts are skeptical about whether a state-run consortium can compete with tech giants like Alphabet, Microsoft, and Amazon in the AI industry. New York has a poor track record of successfully managing high-tech initiatives, and taxpayers should be wary of politicians claiming to know better than the market when it comes to leveraging high-tech investments.

In her State of the State address, Governor Kathy Hochul announced plans to build an AI computing center in New York to bolster the state’s position in AI innovation. The public-private partnership, known as “Empire AI,” aims to make New York a global leader in AI by creating a consortium of universities, nonprofits, entrepreneurs, and other investors. The consortium would be responsible for building the AI facility, potentially in Buffalo, and attracting responsible innovation.

While the idea of giving New York’s educational institutions an edge in AI research sounds promising, the article raises concerns about the ability of a state-run consortium to compete with tech giants like Alphabet, Microsoft, and Amazon, who are investing billions of dollars in AI cloud-computing capacity. It questions whether the project is an attempt to put a “Big Apple stamp” on AI innovation or a genuine effort to drive responsible innovation.

Past initiatives by New York State to leverage high-tech booms have resulted in failure and wasted tax dollars. Former Governor Andrew Cuomo’s high-tech initiatives involving nanotechnology, microchips, and green technology ended in bid-rigging scandals and unfulfilled promises. The article highlights the case of a massive solar-panel plant in Buffalo that cost the state nearly $1 billion but produced few solar panels. The factory is now mostly occupied by data crunchers, and Tesla leases the property for $1 a year.

While public-private partnerships can be beneficial, the article warns that government often fails when taking on functions it is ill-equipped to handle. It cites examples like NASA hiring SpaceX to launch astronauts, which saves billions of dollars, and Operation Warp Speed’s successful effort to fast-track Covid vaccine development. However, taxpayers should be wary when politicians claim to know better than the market how to leverage high-tech investments to boost the economy. Past experiences suggest that New York State may not be equipped to manage a complex AI computing center effectively.