Tim O’Reilly on AI’s Role in the Attention Economy

AI is not the first technological revolution new media publisher and author Tim O’Reilly has experienced – he even popularized the terms “Web 2.0” and “open source.” But, after decades of analyzing patterns at the intersection of technology and the economy, he believes it offers a new, and more productive, way to engage with endless content.

Tim’s Bellagio Reflections: “We need an economic theory for the information age that explains how value is created and distributed, but also how companies can abuse the positional advantages that they earn to keep more of that value than they should, so that they become a blockage in the ongoing creation of new value. I’ve been trying to understand why companies can start out idealistic, yet eventually become like all the rest – as seen by Google removing its corporate slogan, ‘Don’t be evil,’ in 2019.

“Working with my fellow Bellagio attendee, economist Mariana Mazzucato, we explored how the concept of economic rents can be applied in the digital era. We realized that in two- or three-sided markets in which users typically get services for free, what is happening is that platforms use their algorithms and designs to encourage users to spend excess time on the platform, which can then be monetized on the other side of the market. We call these ‘algorithmic attention rents.’ We’ve also written about the need for enhanced disclosures in markets for new kinds of technologies. We developed these ideas into a research proposal that ended up funded by the philanthropic firm Omidyar.”

According to Tim, we don’t yet understand how attention rents will show up in emerging AI services; that’s a focus of future research. But as he sees it, we already know that AI can help us navigate unimaginable oceans of online information, as long as we regulate it carefully.

The interesting questions about AI revolve around both its transformative potential and how we govern that potential – and every time there’s a reset in the computer industry like this, the lessons of history give us an opportunity to do things better. AI is one of these big resets; this new technology is capable of not only saving consumers’ time, but also empowering them to be more creative with information.

As Herbert Simon wrote in his 1971 paper discussing the attention economy, “​​A wealth of information creates a poverty of attention.” The history of the internet is one of putting machines to work to save us time in both navigating abundant information and managing our attention to that information. But things have changed, and many algorithms are now actually taking our attention. The current focus of trying to understand AI’s impact on the future of human flourishing and wellness is good because it could radically change the economy for the better – but it could also radically change the economy for the worse.

Currently, the internet is defined by two-sided markets; users are drawn in with free services, but what are they getting in exchange? The argument has been that the companies that offer those free services are monetizing our data, or even that they’re “stealing” our data. I think that’s the wrong argument. The right argument is that they’re misdirecting our attention; when we go down a rabbit hole on YouTube or Google, that’s not providing a service in our best interests. They extract “attention rent” as well as monetary rent. This is the result of 40 years of neoliberal economic theory, the ideas of which have made our corporations fundamentally antisocial. There have been attempts to push back against it – for example, with ESG [environmental, social, and corporate governance] standards – but we don’t have a new theory of the economy yet that says what should replace it.

As the economy increasingly shifts from one based on objects to one based largely on information, we need to be thinking about what that will look like, and how to create policies that will lead us in the right direction. In this context, AI offers enormous possibilities for new kinds of discovery.