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While organisations are only ever hit with affordable financial penalties, it's rational for them to weigh up the likely penalty vs. the opportunity cost of not

by mft_ 1mo ago

While organisations are only ever hit with affordable financial penalties, it's rational for them to weigh up the likely penalty vs. the opportunity cost of not doing something illegal in their decision-making. If we want to prevent such behaviour (and in case it's not clear from the above, I think we should) then we either need far more brutally punative financial penalties, or for executives to be held personally and criminally liable in such cases.

mdasen 1mo ago
There's also other options than brutally punitive financial penalties or holding execs personally responsible. For example, if a data center is illegally running gas turbines, the penalty could be that the data center must be shut down for 3 years and no equipment can be removed from the data center during that time. With financial penalties, there's always calculus on whether the penalty is high enough to deter the action. But the only reason they'd want to, for example, use illegal power generators at a data center is to run the data center. Losing access to 100% of the value of that data center for 3 years would make the calculus easy: it wouldn't be worth it for the companies. They'd lose the entire reason for doing it and so much of the capital investment in equipment as it depreciated during those 3 years. With AI companies believing the market is worth trillions, it's hard to imagine a financial penalty high enough to deter illegal actions. It might need to be in the hundreds of billions - a level which they probably can't pay given their current resources and which governments wouldn't levy. Not that they'll essentially confiscate a data center and its hardware for multiple years as a penalty either.
- mft_ 1mo ago
  I agree with almost everything you wrote, but... confiscation and inability to operate at a location (as you suggest as a penalty) still ultimately boils down to a financial penalty for an organisation. It feels especially severe in this case (law breaking by a data center operator) because of the high cost and high depreciation rate of GPUs and supporting hardware. If you take a different field of business, you can still imagine an organisation making the calculation that operation for a period of time --before their illegality was discovered and then acted upon by the authorities-- would still be worthwhile even if confiscation was the end result. (In some odd cases, this is close to the actual business model.) If you want to deter hyper-rich companies, you could shift to fining them a meaningful percentage of their annual turnover or even their market capitalisation.
s1artibartfast 1mo ago
Another school of thought is that punishment should be proportional to the crime or harm. Something isn't really a big deal, it doesn't make sense to stick it to a company. This is better at balancing the public interest of legal compliance against the public interest in the product the company provides. It's basically the same trade-off with set in criminal punishments in general. If we made it it the death penalty for jaywalking or littering, we would have a lot less of it. Seems like a slam dunk right? Why don't we just do that?
- mft_ 1mo ago
  > Another school of thought is that punishment should be proportional to the crime or harm. Maybe harm * wealth. Rich people could be fined proportionally more than poor people. Rich companies (turnover, market cap?) could be fined proportionally more too.
culi 1mo ago
If you read the article you see that 1. There isn't even a penalty. Journalists literally had to fly drones with thermal imaging to prove the gas turbines were indeed on. Then some non-profits had to use their own money to file a lawsuit 2. Corruption could get even the lawsuit kicked out: > Enter the Federal Government and the Department of Justice, who pushed the courts to dismiss the suit as a matter of national security, stating that the xAI models were needed for "artificial-intelligence innovation that supports the Department of War’s military operations." So, residents are left without legal means of contesting these developments, barring individual claims and damages.
- mft_ 1mo ago
  I was speaking more generally, but yes, in the increasingly dystopian world of the current US administration, it seems to be even easier for certain people and companies to ignore the law altogether.

by mft_ 1mo ago

mdasen 1mo ago

There's also other options than brutally punitive financial penalties or holding execs personally responsible. For example, if a data center is illegally running gas turbines, the penalty could be that the data center must be shut down for 3 years and no equipment can be removed from the data center during that time. With financial penalties, there's always calculus on whether the penalty is high enough to deter the action. But the only reason they'd want to, for example, use illegal power generators at a data center is to run the data center. Losing access to 100% of the value of that data center for 3 years would make the calculus easy: it wouldn't be worth it for the companies. They'd lose the entire reason for doing it and so much of the capital investment in equipment as it depreciated during those 3 years. With AI companies believing the market is worth trillions, it's hard to imagine a financial penalty high enough to deter illegal actions. It might need to be in the hundreds of billions - a level which they probably can't pay given their current resources and which governments wouldn't levy. Not that they'll essentially confiscate a data center and its hardware for multiple years as a penalty either.

mft_ 1mo ago
I agree with almost everything you wrote, but... confiscation and inability to operate at a location (as you suggest as a penalty) still ultimately boils down to a financial penalty for an organisation. It feels especially severe in this case (law breaking by a data center operator) because of the high cost and high depreciation rate of GPUs and supporting hardware. If you take a different field of business, you can still imagine an organisation making the calculation that operation for a period of time --before their illegality was discovered and then acted upon by the authorities-- would still be worthwhile even if confiscation was the end result. (In some odd cases, this is close to the actual business model.) If you want to deter hyper-rich companies, you could shift to fining them a meaningful percentage of their annual turnover or even their market capitalisation.

s1artibartfast 1mo ago

Another school of thought is that punishment should be proportional to the crime or harm. Something isn't really a big deal, it doesn't make sense to stick it to a company. This is better at balancing the public interest of legal compliance against the public interest in the product the company provides. It's basically the same trade-off with set in criminal punishments in general. If we made it it the death penalty for jaywalking or littering, we would have a lot less of it. Seems like a slam dunk right? Why don't we just do that?

mft_ 1mo ago
> Another school of thought is that punishment should be proportional to the crime or harm. Maybe harm * wealth. Rich people could be fined proportionally more than poor people. Rich companies (turnover, market cap?) could be fined proportionally more too.

culi 1mo ago

If you read the article you see that 1. There isn't even a penalty. Journalists literally had to fly drones with thermal imaging to prove the gas turbines were indeed on. Then some non-profits had to use their own money to file a lawsuit 2. Corruption could get even the lawsuit kicked out: > Enter the Federal Government and the Department of Justice, who pushed the courts to dismiss the suit as a matter of national security, stating that the xAI models were needed for "artificial-intelligence innovation that supports the Department of War’s military operations." So, residents are left without legal means of contesting these developments, barring individual claims and damages.

mft_ 1mo ago
I was speaking more generally, but yes, in the increasingly dystopian world of the current US administration, it seems to be even easier for certain people and companies to ignore the law altogether.