Two influential players in two closely linked technology networks, large established businesses and startups, have temporarily paused their financial endeavors to jointly urge the government to refrain from considering regulations that could impact their financial gains, or in their view, hinder innovation.

“While our two corporations may not see eye to eye on all matters, our differences are not the focus here,” the diverse group states. This group includes a16z founding partners Marc Andreessen and Ben Horowitz, along with Microsoft’s CEO Satya Nadella and President/Chief Legal Officer Brad Smith, showcasing a unique blend of corporate giants and substantial wealth.

But they claim to be advocating for the underdogs, i.e., all the businesses that would’ve been impacted by the latest regulatory intrusion: SB 1047.

Imagine being penalized for an incorrect open model disclosure! a16z general partner Anjney Midha termed it as a “backward tax” on startups and a “blatant regulatory capture” by the Large Tech corporations that could afford the legal expertise necessary for compliance, unlike Midha and his less wealthy peers.

However, this was merely misinformation circulated by Andreessen Horowitz and other wealthy stakeholders that might have been actually affected as benefactors of billion-dollar corporations. In reality, small models and startups would’ve been affected minimally as the proposed law specifically safeguarded them.

It’s peculiar that the very deliberate exception for “Little Tech” that Horowitz and Andreessen routinely advocate for was misrepresented and downplayed by the lobbying efforts they and others led against SB 1047. (California State Senator Scott Wiener, the bill’s architect, recently discussed this at Disrupt).

While the bill had its issues, the opposition greatly exaggerated the cost of compliance and failed to significantly support claims that it would inhibit or burden startups.

This is part of the standard strategy used by Big Tech: exert influence at the state level where they can secure victories (as with SB 1047), while simultaneously requesting federal solutions that they know will never be realized, or will be ineffectual due to political disagreements and legislative incompetence on tech matters.

Their recently published joint statement regarding a “policy opportunity” is the latter part of this strategy: After sinking SB 1047, they can claim they only did so to support a federal policy, despite the long-awaited federal privacy law that tech companies have been advocating for years while opposing state bills.

And what policies do they back? “A range of responsible market-oriented strategies.” In simpler terms: don’t meddle with our finances, Uncle Sam.

Regulations should follow “a scientific and standards-based approach that acknowledges regulatory frameworks that focus on the application and misuse of technology,” and should “concentrate on the risk of wrongdoers exploiting AI,” state the influential venture capitalists and Microsoft executives. What they’re implying is that regulations should be reactive to wrongdoings committed with unregulated products by criminals, rather than proactive.

They argue that “Regulation should only be implemented if its benefits outweigh its costs.” This suggestion, given the context, is amusingly ironic. Essentially, they’re advocating for the inclusion of the ‘fox’ in the ‘henhouse planning committee.’

They also collectively suggest that regulators should “allow developers and startups the flexibility to choose which AI models to use wherever they’re building solutions and not to favor any one platform.” This implies a hypothetical plan to require permission to use one model or another, which isn’t the case, and hence, is a misrepresentation.

They’re asserting that software, run by billion-dollar corporations, has the “right” to access any data because it should be able to learn from it “in the same way as people.”

However, these systems are not like humans; they generate data that mirrors human output in their training data. They are complex statistical projection software with a natural language interface. They have no more “rights” to any document or fact than Excel.

Also, this idea that “facts” (or “intellectual property”) are the only things these systems are interested in and that some kind of fact-hoarding cabal is working to prevent them is a fabricated narrative.

While facts are indeed free agents, their creation through original reporting and scientific research involves real costs. That’s why copyright and patent systems exist: not to prevent intellectual property from being shared and used widely, but to incentivize its creation by ensuring that it can be assigned real value.

Ben Horowitz, Brad Smith, Marc Andreessen, and Satya Nadella are urging the government to refrain from regulating this profitable new area, let the industry decide which regulations are worth the compromise, and nullify copyright in a way that acts as a general pardon for illegal or unethical practices that many suspect enabled the rapid rise of AI. These are the policies that matter to them, whether kids get digital literacy or not.