The next technological megacycle is flourishing in Brazil. The region's fast-growing ecosystem has matured since 2012, leading to unprecedented legislative reform, technological innovation and a massive increase in global investments.
Like the classic advice to “follow the money,” recent major technological changes from computing, telephony, Internet and mobile advancements have evolved in parallel to more advanced payment methods that have helped consumers and businesses capitalize on them. . The world is moving from software to data, the lifeblood of AI training.
The convergence of big tech, finance, and government has enabled a new data economy. While AI is considered the next big thing, it is only part of the story because the data They are the “oil” that fuels AI. The first movement of the megacycle was the General Data Protection Regulation (GDPR) when the EU championed data privacy in 2016. Brazil stepped up and created comparative data privacy rights and is investing heavily in data infrastructure and regulation to allow citizens to take advantage of their personal data.
Much of the billions of dollars in AI investments They come from technology giants led by Amazon, Google and Microsoft. Much of that money goes back to those strategic corporate investors in the bills they pay for access to their expensive cloud platforms.
A “machine with gears” is being created for Big Tech and other companies as largely free access to our personal data will likely end in the 2020s – the same data that drive our artificial intelligence systems and that we produce in a global and mass manner must be monetized, monitored and improved. From biotech and healthcare innovators to big banks, big brands and their marketing agencies, and even governments, everyone is involved in this loop.
However, a new data sharing system that distributes ownership and control of that critical data to everyday citizens could create new models upon which startups can innovate. Our data could power a completely new data economy that could benefit everyone who participates or not, depending on their needs regarding their information requirements. decision making.
In short, the unrestricted use of personal data ends. And this may lead to the next megacycle.
Data privacy will evolve into data property rights in 2024
Our data could drive a completely new data economy that could benefit everyone who participates or not, depending on their decision-making needs.
The next technology megacycle, in which ordinary citizens around the world own and control their personal data that powers AI, began about a year before the global COVID pandemic. In early 2019, Apple CEO Tim Cook published in Time magazine petition a landmark package of reforms to protect and empower consumers that helped spark a cultural and legislative shift away from unrestricted access and collection of our personal data. Apple has committed to much more sustainable business operations by 2030, so we see an attempt to better align one of the world's most valuable technology brands with clear and compelling social responsibility.
Regarding these issues, Cook wrote: “In 2019, it is time to defend the right to privacy: yours, mine, all of us. “Consumers should not have to tolerate another year of companies irresponsibly amassing huge user profiles, data breaches that seem out of control, and the disappearance of the ability to control our own digital lives.”
Since then, more data privacy regulations have emerged and the ability to track consumer purchasing habits and preferences has diminished. Some of the world's most progressive thinkers, such as the governor of California Gavin Newsom have proposed various forms of a “new data dividend” that will provide a framework for ordinary citizens to obtain value or monetary compensation for their data that they could exchange with various organizations.
On November 1, 2023, Brazil took this vision a step further by presenting in its congress the world's first bill of “General Data Empowerment Law”, which could be an additional amendment to your LGPD, Brazil's landmark data privacy law, one of the strictest in the world along with similar laws in California and the EU. If enacted, as some experts predict in 2024, the new legislation will introduce data ownership rights and provide a framework for monetizing this data so that ordinary citizens benefit.
Brazil's fintech innovation, led by its central bank (Banco Central do Brasil), is paving the way for a new paradigm shift where people have autonomy over their data rather than corporate giants controlling it. This levels the playing field for data to be a new currency of choice traded on new rails, making it more divisible, transportable, trustworthy, and resistant to counterfeiting and fraud. With arguments about intellectual property infringements by large language models (LLMs) related to the image of actors, images of artists and the general use of personal data, it is essential to promote new regulations that take into account the constructions of the century XXI and the highly automated use of our collective data. .
Un recent report from S&P Global Market Intelligence based on recent statements by the president of the Central Bank of Brazil, Roberto Campos Net, “connected the dots” to a phased innovation roadmap that began with the introduction of Pix, Brazil's instant payment system that boomed faster than any before, to a new CBDC (central bank digital currency) to help monetize our data.
The Gathering Storm: Big Financial vs. Big Tech
Over the past few years, there has been more friction between traditional banks that compete directly with technological innovators. From cryptocurrency exchanges trying to disrupt the monetary system to new payment methods, digital wallets and even new neobanks or new banks that have transformed everyday financial services.
During the summer of 2022, the cryptocurrency bubble burst after a staggering amount of human and financial capital was invested in web3 companies and technologies. An expert in technological futures, New York University professor, Scott Galloway, declared that the sector was dead in a publication titled “Trustless” (no trust) after “Luna went from a $34 billion market cap to worthless in a matter of days” and crypto lending platform Celsius announced it was leaving on hold all withdrawals and transfers between accounts. This is the same Celsius that promised advertised savings rates of 18,63% compared to traditional banks.
The largest bank in Latin America today, born in Brazil, is Nubank, backed by Warren Buffet, with more than 90 million customers and an extremely profitable business model. It is the fastest growing bank in Brazil despite being one of the largest. Nubank has perfected the digital acquisition process and referral mechanisms to dominate the digital banking landscape. At the same time, Brazil has the world's fastest growing payments network with Pix. More than 70% of Brazil's population has started using this mobile payment system in just two years since its introduction.
We see a large investment from central banks in CBDC (Central bank digital currencies, Currencies central bank digital), particularly for cross-border commercial mechanisms related to smart contracts.
However, unless traditional banking institutions continue to evolve and innovate, they could become obsolete, especially with a move toward a world in which banking is an integrated function. Our bank accounts are becoming a store of value on smartphones for the majority of the world's consumers. Smart, advanced and disruptive banks like those in Brazil have been reinventing themselves and, instead of bankers, they are hiring more data scientists, specialists in Artificial Intelligence and behavioral psychologists.
Emerging markets are emerging to lead the way
Unless the United States and other mature markets, such as Europe, accelerate their pace of innovation and legislative reform, they will be left behind in this new rise of the data economy. In it "Plan for an AI Bill of Rights”, the Biden administration frames the use of technology, data and automated systems “among the great challenges posed to democracy today” due to bias and discrimination from AI and “uncontrolled social media data.” collection that threatens people's opportunities, undermines their privacy, or pervasively tracks their activity, often without their knowledge or consent.”
Word is spreading, even in the heart of technocapitalism in the US. On November 3, 2023, during an event in Silicon Valley, Gustavo Franco, Brazilian economist and former governor of the Central Bank of Brazil, explained that data property rights have a similar challenge to money in the 1980s. Franco proposed a supervisory and regulatory structure around data rights that is analogous to the Basel Accords of the Bank for International Settlements of 1988, which manages system risk around banking operations.
During the same conference, Campos Neto discussed the latest market innovations, which will combine Pix, open finance (banking and financial product integration), currency internationalization and drex (Brazil's emerging CBDC) for a “new dimension of financial intermediation, adding AI so people can consume financial products in a safe and efficient way.”
The time has come for the United States and other mature markets to come into play before being left behind in a brave new world of data property rights. Without express consent, you will not allow data brokers, big tech companies, or organizations to scrape, package, and sell our data.
Importantly, the next megacycle in which AI is powered by personal data that we collectively control will quickly create a much larger pie that everyone can benefit from and prosper together. This is how we accelerate toward the next big leap ahead: a world where data provided with consent ensures trust and engagement in our institutions.
