CNBC reported on Monday that former Google CEO Eric Schmidt oversaw a government commission ostensibly established to provide guidance to the U.S. government regarding policies on AI and machine learning technologies without disclosing personal investments in startups working in the AI space.
As chair of the National Security Commission on Artificial Intelligence (NSCAI) — which ended its work on October 1 — Schmidt helped guide federal government policy towards AI, including recommendations for funding partnerships with companies developing AI technologies.
In its 756-page final report for 2021, the NSCAI advised the federal government to provide $40 billion in funding for AI research and development: “The $40 billion we recommend to expand and democratize federal AI research and development (R&D) is a modest down payment on future breakthroughs.”
CNBC reported on conflicts of interest presented by Schmidt’s role as chair of the NSCAI and his investments in firms developing AI:
Five months after Schmidt was appointed to the National Security Commission on Artificial Intelligence, he made a little-noticed private investment in an initial seed round of financing for a start-up company called Beacon.
It was the first of a handful of direct investments he would make in AI start-up companies during his tenure as chairman of the AI commission.
CNBC noted that Schmidt’s investment in Beacon — a startup company using AI in its supply chain products it sells to shippers managing freight logistics — was made five months after his appointment to head the NSCAI.
The business news outlet emphasized Schmidt’s lack of public disclosure of his AI-related investments. Schmidt’s net worth is estimated to be $20.6 billion, according to Bloomberg Billionaires Index.
“Altogether, Schmidt and entities connected to him made more than 50 investments in AI companies while he was chairman of the federal commission on AI,” CNBC added. “Information on his investments isn’t publicly available.”
In 2010, Schmidt remarked on the influence of lobbyists over the crafting of legislation, including how vested interests are involved in the writing of laws directly impacting their financial welfare.
He said:
The average American doesn’t realize how much of the laws are written by lobbyists. … It’s shocking, now — having spent a fair amount of time inside the system — how the system actually works. It’s obvious that if the system is organized around incumbencies writing the laws, the incumbencies will benefit from the laws that are written.
Despite the conflicts of interest presented by Schmidt’s investments in AI-related companies given his NSCAI role, the tech billionaire seemingly adhered to all legal requirements related to his chairing of the NSCAI.
A CNBC segment concluded, “At the same time Schmidt was influencing the industry’s future, he was making personal investments in AI companies that stood to generate profits for himself. There’s no indication Schmidt did anything unlawful or even against the rules.”
Follow Robert Kraychik on Twitter @rkraychik.