China warns against AI investment bubbles in new guidelines

China's National Development and Reform Commission has surveyed the global stampede of money into artificial intelligence and reached a conclusion that will read in certain postcodes as flat heresy: there might be a bubble. The commission's new guidelines warn against AI investment bubbles, which is a refreshing break from the prevailing industry position that every unprofitable model is a civilisational cornerstone. Note the instrument, though: guidelines — not a ban, not a cap, not a moratorium. Just a laminated note by the staff kitchen reminding everyone what happened last time. Somewhere a founder is reading this and feeling an unexplained chill.

Then there's the remedy list, which carries the unmistakable aroma of a committee asked for a list and dutifully producing one: improvements to laws, regulations, application guidelines and ethical standards. Four items. One of them is 'application guidelines', the thing you write when you've run out of verbs, and another is 'ethical standards', which keeps the aspirational end of the market in work. Improvements, mind — not rules, not teeth, not consequences. 'Improvement' is doing the heavy lifting here that 'consultation' does when a ministry wants a policy to quietly stop breathing. It is, at least, four more boxes ticked than most national AI strategies manage in a decade.

But the genuinely interesting clause is the accountability one: officials are to be held accountable when poorly planned projects or reckless investment result in major losses. Which implies, somewhere, a filing cabinet of ribbon-cutting photographs that have just been reclassified as evidence. It also means the NDRC is asking a different question from the one the West keeps asking. London and Washington have spent the year arguing about what a model is allowed to say; the commission appears to care about who holds the invoice when the returns fail to turn up. Bubbles are a capital-allocation problem, and capital allocation is precisely the thing planners have spent seventy years claiming to be rather good at.