6 - Investing in Artificial Intelligence

Summary

In this chapter, we ask what economic modeling can tell us about the likelihood that firms will invent an AGI: how much and for how long must they sustain investment in R&D to obtain such an invention? We develop a novel Real Options Model, one that uses a stochastic compound Poisson process, to explicitly take into account that a radical innovation such as an AGI is subject to much more uncertainty than typical business investments – which also helps throw light of the breakthroughs and backlashes that have characterized periodic AI winters. An important conclusion from the modelling in this chapter is that it will most likely be largely government-funded agencies and/or a few large corporations that will invent an AGI, if it is ever invented.