AI Lobbying is Not Normal

[Algon]

Link post

An insightful thread by Daniel Eth on AI lobbying. Re-posted in full w/​ permission.

Recently, major AI industry players (incl. a16z, Meta, & OpenAI’s Greg Brockman) announced >$100M in spending on pro-AI super PACs. This is an attempt to copy a wildly successful strategy from the crypto industry, to intimidate politicians away from pursuing AI regulations.🧵

First, some context. This is not normal. Only one industry has ever spent this much on election spending—the crypto industry spent similar sums in 2024 through the super PAC Fairshake. (The only super PACs that spend more are partisan & associated with one party/​candidate.)

In case you’re not that cued in to US politics, Fairshake has basically unparalleled influence across the political spectrum within Congress. Their story is instructive, as the pro-AI super PACs are being funded & staffed by many of the key figures behind Fairshake.

A few years ago, crypto had basically zero influence in Congress, w/​ many members of Congress in favor of heavily regulating or even outright restricting crypto. After >$100M of spending in the 2024 elections, Fairshake has now achieved approximate political dominance

In 2024, Fairshake’s spending made up the majority of the total spending in some races. In a handful of races, Fairshake’s support was seen as potentially decisive for the election outcome (eg, defeating anti-crypto Senator Sherrod Brown and Senate-hopeful Katie Porter).

The rest of Congress got the message. Members of Congress who had previously been aggressively anti-crypto became much more muted on the issue. Today, there basically aren’t any anti-crypto members of Congress left, in either party.

My understanding is politicians are advised that crypto is the single most important industry to avoid pissing off. The AI industry is now entering the same tier of influence. From what I’m hearing, politicians around the country are already asking consultants how to be “pro-AI”

Notably the main recently announced pro-AI super PAC (Leading the Future) is gearing up to take a similar approach to Fairshake. In addition to the overarching strategy, Leading the Future will have some of the same key funders (eg a16z) as well as staff & advisors as Fairshake

Unless something changes, we should expect the AI industry will achieve similar political dominance as crypto. This would mean freezing the progress of AI regulatory proposals in Congress, w/​ most elected officials becoming nervous to even criticize the industry.

Now, it’s true that politicians sometimes vote against the preferences of donors, especially when their constituents have other preferences. But AI, like crypto, is a relatively low salience issue, where donor preference would be expected to be more powerful than voter preference

If an issue is super high salience to voters, such that many will actually change their votes based on it (eg immigration, abortion, maybe climate change in a Dem primary), then politicians will be wise to align with voters, even if that irritates their donors…

But IF an issue is lower salience to voters, such that voters rarely change their vote over it (eg crypto, AI at least for now), AND political donors care a lot about the issue (and are savvy), THEN the politically wise thing is for politicians to prioritize donor preferences.

Crucially, savvy political donors don’t make their political ads about their issue if it’s a low salience issue (or if their position is unpopular). Fairshake, for instance, does not make political ads about cryptocurrency. They recognize that voters don’t care about crypto...

Instead, they spend money on ads calculated to inflict maximum damage on their opponents (or to maximally boost their preferred candidates) based on issues that voters do care about, such as immigration, inflation, and healthcare

It doesn’t matter to the political calculus if the public disagrees w/​ what donors want if the public isn’t changing their votes based on it. The political incentives push toward chasing donor money, as money allows for running ads which (somewhat) help with winning elections

And even if a handful of politicians are willing to support AI policy & risk industry spending against them, having just a few champions for AI policy won’t allow for passing legislation as long as the clear majority in Congress will vote against it.

And congressional leadership, which effectively has a veto on all legislation, has similar incentives—they want to bring in lots of donor money for close races to help their party caucus (eg Senate Dems) win a majority. This creates more veto points on AI policy.

Normally, this is all kept in check by politicians sometimes being willing to spend political capital on what they want or what their staff wants. But crypto realized they could simply turn the dial up to 11. And AI interests just started running the same playbook.

I still expect some AI legislative negotiation to occur on the margins, or where industry is fine with it. But the AI industry may now effectively have a veto on almost all AI legislation, & previous battles (eg the moratorium) may be refought against a much stronger industry.

[David Matolcsi]

I’m confused. If Fairshake’s $100 million was this influential, to the point that “politicians are advised that crypto is the single most important industry to avoid pissing off”, why don’t other industries spend similar amounts on super PACs? $100 million is just not that much money.

It has long been a mystery to me why there isn’t more money in politics, but I always thought that the usual argument was that studies show that campaign spending matters surprisingly little, and in particular, super PAC dollars are very not effective at getting votes.

How strong is the evidence that the crypto industry managed to become very influential through Fairshake?

[Garrett Baker]

If Fairshake’s $100 million was this influential, to the point that “politicians are advised that crypto is the single most important industry to avoid pissing off”, why don’t other industries spend similar amounts on super PACs? $100 million is just not that much money.

I agree, and therefore you should update toward the people at Fairshake being very good at politics, rather than the money at Fairshake being sufficiently large to buy a congress, and so get worried when Algon Daniel Eth claims that the people who were behind Fairshake will be behind Leading the Future, as they will have the political weight of Fairshake behind them to bootstrap Leading the Future.

That is, given limited success in just buying congressional votes, one should infer the bottleneck is not money, but something else, likely talent or connections.

[Algon]

Algon claims

Daniel Eth claims this. This is a linkpost. Says so at the top of the post. Sorry for the confusion! I added a screenshot from the start of the twitter thread. Hope that the edit make this clearer.

[Noosphere89]

I’m confused. If Fairshake’s $100 million was this influential, to the point that “politicians are advised that crypto is the single most important industry to avoid pissing off”, why don’t other industries spend similar amounts on super PACs? $100 million is just not that much money.

It has long been a mystery to me why there isn’t more money in politics, but I always thought that the usual argument was that studies show that campaign spending matters surprisingly little, and in particular, super PAC dollars are very not effective at getting votes.

A lot of this I suspect is related to way too many lobbyists targeting high-salience issues where the public is willing to vote against or for certain candidates, and I suspect a lot of the studies showing lobbying has no effect are on issues where the public is willing to vote against legislators that take the stances lobbyists prefer.

My general model for lobbying is that it’s most useful in areas where you have reason to believe the public doesn’t care about the issue, because you can provide money and selectively boost or depress candidates based on the more normal issues without talking about the issue, and it becomes much less useful when the public starts to care about an issue.

In essence, lobbying provides information, promises and threats on money as well as shifting the framing of issues in a legislator’s mind.

[Garrett Baker]

the usual argument was that studies show that campaign spending matters surprisingly little, and in particular, super PAC dollars are very not effective at getting votes.

I tried to find a source for this, and failed. What are you basing this claim on?

[David Matolcsi]

I also haven’t found great sources when looking more closely. This seems like a somewhat good source, but still doesn’t quantify how many dollars a super PAC needs to spend to buy a vote.

[Mitchell_Porter]

It has long been a mystery to me why there isn’t more money in politics

Can you add some context to this remark? I think it’s widely believed that politics is already suffused with money (and that this is a bad thing).

[Algon]

Scott has an article which may answer your question. “Too much dark money in Almonds”.

Let me quote the beginning, which essentially expands on the text you quoted from David.

Everyone always talks about how much money there is in politics. This is the wrong framing. The right framing is Ansolabehere et al’s: why is there so little money in politics? But Ansolabehere focuses on elections, and the mystery is wider than that.

Sure, during the 2018 election, candidates, parties, PACs, and outsiders combined spent about $5 billion – $2.5 billion on Democrats, $2 billion on Republicans, and $0.5 billion on third parties. And although that sounds like a lot of money to you or me, on the national scale, it’s puny. The US almond industry earns $12 billion per year. Americans spent about 2.5x as much on almonds as on candidates last year.

But also, what about lobbying? Open Secrets reports $3.5 billion in lobbying spending in 2018. Again, sounds like a lot. But when we add $3.5 billion in lobbying to the $5 billion in election spending, we only get $8.5 billion – still less than almonds.

What about think tanks? Based on numbers discussed in this post, I estimate that the budget for all US think tanks, liberal and conservative combined, is probably around $500 million per year. Again, an amount of money that I wish I had. But add it to the total, and we’re only at $9 billion. Still less than almonds!

What about political activist organizations? The National Rifle Association, the two-ton gorilla of advocacy groups, has a yearly budget of $400 million. The ACLU is a little smaller, at $234 million. AIPAC is $80 million. The NAACP is $24 million. None of them are anywhere close to the first-person shooter video game “Overwatch”, which made $1 billion last year. And when we add them all to the total, we’re still less than almonds.

Add up all US spending on candidates, PACs, lobbying, think tanks, and advocacy organizations – liberal and conservative combined – and we’re still $2 billion short of what we spend on almonds each year. In fact, we’re still less than Elon Musk’s personal fortune; Musk could personally fund the entire US political ecosystem on both sides for a whole two-year election cycle.

[Gordon Seidoh Worley]

My guess is that no amount of money can keep legislators completely away from regulating AI because it will eventually get too scary not to. Crypto would have similar issues if it posed a serious threat to, say, the stability of the economy.

[Algon]

Not sure I understand your point. Let me try re-phrasing it: “Legislators will find it too scary to build AI. If Crypto threatened the stability of the economy, legislators would want to build it, too.” Is that correct?

[Gordon Seidoh Worley]

Oh I posted this from my phone and it autocorrected “regulating” and “rebuilding”. Fixed.