AI Superpowers: China, Silicon Valley, and the New World Order

by Kai-Fu Lee

Contrast that with the political firestorm following big bets gone bad in the United States. After the 2008 financial crisis, President Obama’s stimulus program included plans for government loan guarantees on promising renewable energy projects. It was a program designed to stimulate a stagnant economy but also to facilitate a broader economic and environmental shift toward green energy. One of the recipients of those loan guarantees was Solyndra, a California solar panel company that initially looked promising but then went bankrupt in 2011. President Obama’s critics quickly turned that failure into one of the most potent political bludgeons of the 2012 presidential election. They hammered the president with millions of dollars in attack ads, criticizing the “wasteful” spending as a symptom of “crony capitalism” and “venture socialism.” Never mind that, on the whole, the loan guarantee program is projected to earn money for the federal government—one high-profile failure was enough to tar the entire enterprise of technological upgrading. Obama survived the negative onslaught to win another term, but the lessons for American politicians were clear: using government funding to invest in economic and technological upgrades is a risky business. Successes are often ignored, and every misfire becomes fodder for attack ads. It’s far safer to stay out of the messy business of upgrading an economy.