Information continues to grow and information continues to spread throughout the world. The world thrives on information.

But how is the growth and spread of information going to play out in the future? Especially with the challenges coming from China, specifically in the area of Artificial Intelligence?

To meet this challenge, the United States is exploring how it can possibly generate the resources to meet the requirements of this new world that is before us.

One answer is the National Research Cloud, an initiative that has just received bipartisan support in both houses of the United States Congress.

A National Research Cloud

Last month, Reps. Anna G. Eshoo, (D-CA), Anthony Gonzales (R-OH), and Mikie Sherrill (D-NJ) introduced the National AI Research Resource Task Force Act; Senators Rob Portman (R-OH) and Martin Heinrich (D-NM) introduced companion legislation in the Senate.

The Act would create a task force of leaders from the worlds of government science leaders, academics and industry representatives to build a plan for the operation and funding of this national research cloud.

Steve Lohr writes in the New York Times,

The purpose of this organization is to give academic scientists access to the cloud data centers of the tech giants and to public data sets for research.

Mr. Lohr continues,

The cost and need for vast computing resources are putting some cutting-edge AI research beyond the reach of academics.

and,

Only the tech giants like Google, Amazon, and Microsoft can spend billions a year on data centers that are often the size of a football field, housing rack upon rack with hundreds of thousands of computers.

Because of this situation, computer scientists have moved to the big tech companies from the university world, and not just because of bigger pay. This has raised a concern. Academic research, which is very often the source of future breakthroughs, is losing out.

The objective of the plan would be for the academics to use the cloud factories of the big tech companies.

"Academic scientists would be government-subsidized customers of the tech giants.

Many see this approach as the only feasible alternative for academics to obtain the resources they need and that society needs. Other paths are just way too expensive.

What Does This Mean?

But this concept raises some real questions about the future of big tech and its relationship with the federal government.

There is enough concern already about the role that the tech giants now play in the world of computing. A National Research Cloud just ties the big giants more closely to the government, to the academic world, and to the total domination of the future of computing.

In some areas, like AI, the U.S. government knows they must keep up and cannot allow China to get ahead of it. Nor, can the United States allow China to get ahead of it in any part of the field of information technology. China is now driving so much of what is going on in the world and the United States must respond. This is similar to how the Soviet Union's Sputnik launch in 1957 spurred America's space program, but arguably on a much bigger scale and with a greater impact on our daily lives.

Cutting-edge technology is essential for both the national security of a country, but it is also a requirement for the maintenance of economic competitiveness. It should be noted that the legislation connected to this initiative is in an amendment to this years defense budget.

How Do You Structure A National Research Cloud?

The implications of this initiative are enormous, for the government, for academics, and for the big tech giants.

First off, there is concern enough about the power that the big tech giants have. There has already been lots of talk what to do with these behemoths. Should the tech giants be broken up? Heavily regulate them? Maybe they should be taken over and run as government agencies?

The situation arises because of the economics of big tech companies: they are scalable in a way not seen before.

The New Domination

Companies like Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and so on, are built on a foundation of intellectual capital which allows these organizations to scale their businesses like no others before. This has allowed them to dominate the cloud and data and information.

Now we seeing how these new modern corporations, who can expand the cloud beyond anything that universities and other research facilities can reasonably finance, are coming to dominate even the research world. This push to create a National Research Cloud should be a real wake-up call to the realities of the Information Age.

The alternative is for the government to get involved. And, I believe, the cry for government intervention is going to grow. Monopoly power is just going to grow. Imagine the wealth that might be created if these businesses stay as they are. (As of July 6, each of the four companies mentioned above - Microsoft, Apple, Amazon and Google - has a market cap in excess of $1 trillion, the first time that's occurred since February.)

The government believes that it must do something. Mr. Lohr mentions that the federal government has long backed major research projects like particle accelerators for high-energy physics in the 1960s and supercomputing centers in the 1980s.

But in the past, the government built the labs and facilities.

Here we are talking about an entirely different relationship. The scale factor is something different from what existed before. The National Research Cloud is the beginning of an entirely different relationship, one that is not yet fully defined.

If big tech is left all alone in this new format, it will become more indispensable, more powerful, and, hence, more valuable. But, can the government allow this monopoly power to grow?

But, what might be the right balance? Or, will government eventually come to take it all under its wing?

To me, this move to construct a National Research Cloud is a move into unknown territory and it is almost impossible to discern how this story will carry out. All one can say is that information is going to continue to grow and spread and a growing portion of this movement is going to impact national interests. The unknowable issue for investors is: what will be the structure that gets us there...gets us to the future?

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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The National Research Cloud: Big Tech And Academic Research - Seeking Alpha