# The AI race in 2024: the world's biggest companies go all in while politics takes tentative steps

Author: Fernando Nieto Lobato
Original publication: 2024-06-26
Spanish original: https://estrategiabyaleph.substack.com/p/estrategia-39-balance-de-los-primeros
English URL: https://elcontemplador.github.io/estrategia-english/essays/039/
Status: Published translation

This is a translation of the original Spanish essay published on 26 June 2024. Its claims, examples and forecasts retain that historical context.

English publication: 2026-09-29

*Historical context: this assessment preserves the perspective and claims of 26 June 2024. Financial figures, company rankings and expectations are those reported at the time.*



In the first six months of 2024, artificial intelligence has grown considerably, with numerous technological advances, multibillion-dollar investments and the emergence of disruptive new companies. Yet this rapid progress has also exposed a widening gap between the private and public sectors in innovation, regulation and readiness for the socioeconomic changes AI is bringing.



## The private sector leads the way



Private-sector innovation has been particularly striking. [OpenAI surprised the world early this year by unveiling Sora](https://open.substack.com/pub/estrategiabyaleph/p/estrategia-21-revolucion-audiovisual?r=2tyybn&utm_campaign=post&utm_medium=web), its text-to-video model, and with the still-incomplete rollout of GPT-4o, an improved multimodal version of its flagship language model that promises remarkably intuitive and accomplished voice communication with AI. [Google, meanwhile, has stepped up the integration of AI into all its products and services](https://open.substack.com/pub/estrategiabyaleph/p/estrategia-33-google-vs-openai-una?r=2tyybn&utm_campaign=post&utm_medium=web), from search to Google Workspace, in a May presentation that repeated the words “artificial intelligence” no fewer than 121 times.



[At this year's Worldwide Developers Conference (WWDC), Apple presented a range of generative AI tools, signalling its decisive entry into the AI race and placing the technology at the heart of its business strategy](https://open.substack.com/pub/estrategiabyaleph/p/estrategia-37-apple-pone-la-inteligencia?r=2tyybn&utm_campaign=post&utm_medium=web) from now on. Anthropic, backed by substantial investment from Amazon and unwilling to fall behind, released Claude 3.5 Sonnet this very week: our featured tool in this issue. This significant update to its AI assistant has been praised for its accuracy and improved capabilities. It has surpassed OpenAI's models, establishing itself as the most powerful large language model currently available.



Over the past month we have also seen an explosion of interesting new video-generation models, such as [Kling](https://kling.kuaishou.com/), [Luma Dream Machine](https://lumalabs.ai/dream-machine) and [Runway's Gen-3 Alpha](https://runwayml.com/blog/introducing-gen-3-alpha/).



Open-source models also continue to advance and multiply, with a renewed push from [Meta through Llama 3](https://llama.meta.com/llama3/) — while we await the release of its large, 400-billion-parameter model — and from companies such as [Mistral, Europe's great, and almost only, hope in the LLM field](https://mistral.ai/). Major models are also arriving from China, which, despite starting behind in some areas of AI, already seems to be close on the heels of the United States and far ahead of other regions.



Although private investment has fluctuated over recent months, AI continues to attract enormous amounts of funding, as this [recent May report by a venture capital expert](https://tomtunguz.com/ai-investment-2024/) shows. In the first four months of the year, US companies had already raised US$18.3 billion. If this continued for the rest of the year, the total would be around US$80 billion.



*Archive note: the malformed URL in the Spanish source has been repaired by removing its duplicated protocol prefix. The linked page has not been rechecked.*



[![Theory Ventures chart of US venture capital investment in AI, with an observed 2024 portion and a grey projected extension.](https://elcontemplador.github.io/estrategia-english/assets/images/45220f4c-0720-4069-8b1b-06a3b33a8174_1600x1200.png)](https://substackcdn.com/image/fetch/$s_!12Q3!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45220f4c-0720-4069-8b1b-06a3b33a8174_1600x1200.png)



*Chart text: “AI Investing Projected to be $80b in 2024”, “Up 2.6x from 2023”. The vertical axis measures US venture capital investment in AI in billions of dollars; the horizontal axis shows years. The final bar has an orange portion around US$18 billion and a grey extension. The US$80 billion headline is a projection, not an observed full-year total. Source shown: Theory Ventures.*



New companies with enormous potential are also emerging, such as the recently announced venture of OpenAI co-founder Ilya Sutskever, focused on next-generation AI. It has already attracted record investment, although the precise details have not yet been made public.



**Perhaps the most tangible and easily understood sign of AI's acceleration in the private sector is that Nvidia, the company developing the hardware currently doing most of the work of powering AI, has become the world's most valuable company by market capitalisation. Look at the next four companies and they too are technology businesses investing heavily in AI.**



The world's leading companies are competing in this field, committing vast sums and recruiting many of the planet's brightest minds to their teams with salaries more typical of football stars than engineers.



[![Trung Phan's 18 June 2024 post showing Nvidia ahead of Microsoft, Apple, Alphabet and Amazon by market capitalisation.](https://elcontemplador.github.io/estrategia-english/assets/images/74cd726c-c7d6-4e0b-8263-395dc64ba0cc_890x1029.png)](https://substackcdn.com/image/fetch/$s_!nU-e!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F74cd726c-c7d6-4e0b-8263-395dc64ba0cc_890x1029.png)



*Historical screenshot: Trung Phan writes, “Nvidia officially most valuable company in the world.” The table shows the following figures on 18 June 2024; these are not current market data.*



| Rank | Company | Market capitalisation | Share price | Change shown |

|---|---|---|---|---|

| 1 | Nvidia | US$3.345 trillion | US$136.02 | +3.85% |

| 2 | Microsoft | US$3.314 trillion | US$445.96 | −0.54% |

| 3 | Apple | US$3.279 trillion | US$213.86 | −1.30% |

| 4 | Alphabet (Google) | US$2.160 trillion | US$175.68 | −1.73% |

| 5 | Amazon | US$1.894 trillion | US$182.09 | −1.07% |



## The public sector struggles to keep pace



While the private sector, predominantly in the United States, advances in leaps and bounds, the public sector seems to be falling behind and working at the pace of politics. That is undoubtedly much slower than the pace of start-ups or Silicon Valley's large companies. With a technology that could take off very rapidly, perhaps even exponentially, it may mean arriving far too late.



In these first six months of the year, the European Union finally approved its [AI Act](https://www.europarl.europa.eu/news/es/press-room/20240308IPR19015/la-eurocamara-aprueba-una-ley-historica-para-regular-la-inteligencia-artificial), an important milestone in regulating the technology. Its effective implementation, however, is still under way and faces significant challenges.



In Spain, the creation of the Spanish Agency for the Supervision of Artificial Intelligence has been delayed by several months, although it now seems to be starting to operate. This reflects the difficulties many governments face in establishing effective regulatory frameworks. The United States, meanwhile, where the direct effects of AI technologies are being felt first, continues to debate federal AI regulation without reaching a clear consensus.



The central gap is not just in the pace of regulation. At such an early stage of this technology, blanket regulation without sufficient understanding can plainly be very counterproductive, **[as this report published just yesterday suggests](https://www.xataka.com/robotica-e-ia/obsesion-reguladora-ue-plantea-mundo-que-ia-tendra-dos-velocidades-europa-saldra-perdiendo)**. It lies above all in investment, research and the development of models of one's own. By its very nature and potential, AI is not something you would want to leave entirely in the hands of the world's largest corporations or totalitarian states. Europe remains far behind China and the United States in public investment in AI. The EU's Coordinated Plan on AI has made limited progress in practice. The United Kingdom has increased its AI investment but remains far below the levels of the major powers.



**This investment disparity is creating a growing technological divide. US and Chinese technology companies dominate cutting-edge AI development, while Europe struggles to keep pace, with few companies capable of competing globally in AI.**



This recent tweet by AI expert Carlos E. Perez, responding to remarks by former US Treasury Secretary and former Harvard president Larry Summers — now on OpenAI's board — captures the international situation well. We feature Summers's remarks in this issue's recommendation of the week.



[![Carlos E. Perez's post about countries falling behind in the AI race, quoting a post about Larry Summers and recursive self-improvement.](https://elcontemplador.github.io/estrategia-english/assets/images/c94186a4-59d2-49cd-93a0-273249c7ee4e_889x1083.png)](https://substackcdn.com/image/fetch/$s_!rrxv!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fc94186a4-59d2-49cd-93a0-273249c7ee4e_889x1083.png)



*English text visible in the screenshot, dated 24 June 2024. Carlos E. Perez writes:*



> The AI race is in full swing right now, and almost every country hasn't even reached the starting line!



*The embedded post by Tsarathustra, dated 22 June, reads:*



> OpenAI board member Larry Summers says the recursive self-improvement aspect of AI will have a "transcendent" impact and any attempt to slow or stop development will play into the hands of America's enemies



*The image contains a video still; the text above transcribes the posts, not the unavailable video.*



## The impact on the labour market



**AI's rapid advance is already having a significant impact on the labour market. [According to a recent survey by Duke University and the Federal Reserve Banks of Atlanta and Richmond,](https://edition.cnn.com/2024/06/20/business/ai-jobs-workers-replacing/index.html) 61% of large US companies plan to use AI over the next year to automate tasks previously performed by employees.**



The reasons for adopting AI vary:



- Improving product quality (58%).

- Increasing output (49%).

- Reducing labour costs (47%).

- Replacing workers (33%).



**Despite mounting evidence of disruption to employment, initiatives to address these challenges are scarce. Universal basic income remains controversial and has not been implemented on a large scale in any developed country. Retraining and continuing education programmes are not progressing fast enough to meet the challenge of automation, while specific support payments for occupations at risk of displacement by AI are virtually non-existent.**



The public sector is arriving late not only to become a significant player in research, new model development, recruitment of talent and sensible regulation of a technology it does not understand in depth. More seriously, it also seems late even to begin serious experiments with policies that will be indispensable if AI develops as many of the world's leading companies expect. There is no certainty, but the possibility is far from negligible: a great many companies are betting everything on it. Such policies would be needed in the face of potentially massive job displacement over the next decade, a very substantial possible increase in unemployment in many sectors, and even a change of paradigm in how people live and relate to work.



In Spain, to take the case I know best because it is closest to home, we have spent years absorbed in trying to resolve questions of territorial organisation and state structures rooted at least in the nineteenth century. Meanwhile, we refuse to “look up” and see an enormous meteor bearing the letters AI, with a considerable chance of crashing into us, which should be our highest priority because of its urgency and significance. A collision is not certain: it might only graze us. Perhaps AI will soon hit a formidable wall and be unable to advance at the pace of recent years because of constraints on computing power, data or energy. Yet even in the unlikely event of no further progress, the technology we already have is bringing a great wave that will affect our lives more than the Internet. In many possible scenarios, AI will radically change how we learn, work and live.



The first six months of 2024 have shown that the AI revolution continues at an unprecedented pace, driven mainly by the private sector. Yet **the widening gap between technological progress and socioeconomic adaptation poses serious challenges.**



Governments, businesses and civil society must work together to develop comprehensive strategies addressing not only technological development but also its ethical, social and economic implications. Only a coordinated, proactive approach will allow us to realise AI's full potential while mitigating its risks and securing a prosperous and equitable future for all.



**The AI race is in full swing, and its outcome will define our society's future.** The question remains: **will we be ready for the world we are creating?** A great deal is at stake, as this image featuring [a quotation attributed to Stephen Hawking](https://www.inc.com/jessica-stillman/stephen-hawking-spent-last-years-of-his-life-warning-us-about-future-of-ai.html#:~:text=If%20machines%20produce%20everything%20we,successfully%20lobby%20against%20wealth%20redistribution) reminds us. It was recently shared in one of Reddit's most active communities discussing AI's future.



[![Reddit image headed Good luck to your future, with a quotation attributed to Stephen Hawking about the distribution of machine-produced wealth.](https://elcontemplador.github.io/estrategia-english/assets/images/a5f5db1d-10ea-4662-bc08-4a941727ab2a_1159x1186.png)](https://substackcdn.com/image/fetch/$s_!icqH!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5f5db1d-10ea-4662-bc08-4a941727ab2a_1159x1186.png)



*Text transcribed from the supplied English image; attribution retained from the original article:*



> "If machines produce everything we need, the outcome will depend on how things are distributed," he wrote. "Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution."



Fernando Nieto Lobato



*Director of Digital Innovation, Institución Educativa ALEPH*