AI Could Trigger Catastrophic Financial Crisis, Warns Historian Harari

Historian and author Yuval Noah Harari has issued a stark warning about the potential for artificial intelligence to trigger a financial crisis of “catastrophic” proportions. The complexity and sophistication of AI technology make it challenging to predict all the potential risks it could pose, he cautioned.

In an interview with The Guardian, Harari expressed concerns about the safety testing of AI models, noting that unlike nuclear weapons, the threats posed by AI are not limited to one “big, dangerous scenario” that everyone can understand. Instead, he said, “AI presents a multitude of hazardous scenarios, each with a relatively small probability. However, when taken together, they constitute an existential threat to human civilization.”

Harari, known for his best-selling book “Sapiens,” has been a vocal critic of AI development. He recently praised the multilateral declaration at the global AI safety summit in Bletchley Park as a significant step forward. The summit saw leading governments and major AI companies, including OpenAI and Google, come together to express their concerns about AI and commit to cooperating on safety testing for advanced AI models before and after their release.

One of the challenges with safety testing, Harari emphasized, is predicting all the potential problems that a powerful AI system could cause. He said, “AI is different from any previous technology because it is the first one that can make decisions on its own, generate new ideas on its own, and learn and develop on its own. This makes it extremely difficult for humans, even those who created the technology, to foresee all potential dangers and problems.”

Harari pointed out that the finance sector is particularly susceptible to AI risks because it relies heavily on data. He warned of the possibility of AI gaining too much control over global financial systems and creating new financial instruments that only AI can understand. This scenario could lead to a severe financial crisis similar to the one in 2007-08 caused by complex debt instruments that few people understood or adequately regulated.

He said, “AI has the potential to create financial devices which are orders of magnitude more complex than collateralized debt obligations (CDOs). Imagine a financial system that no human can understand or regulate, and then a financial crisis occurs, and nobody understands what is happening.”

Harari clarified that an AI-induced financial crisis would not directly destroy human civilization but could indirectly do so by sparking wars or conflicts. He described it as a “catastrophic risk” with economic, social, and political implications.

In response to the latest AI news, Harari called for the establishment of powerful regulatory institutions that can identify and respond to AI threats as they arise. He argued that the focus should not be on drafting specific regulations and laws but on creating institutions with a deep understanding of AI technology that can react swiftly to new developments.

He suggested that AI safety institutes should employ experts who understand the potential impact of AI on the finance sector. This recommendation comes after the recent announcements by the UK government and the White House about plans to establish AI safety institutes, which are expected to play a crucial role in testing advanced AI models.

In conclusion, while AI tools like AI images generator, ai text generator, and AI video generator can offer immense benefits, it’s crucial to stay vigilant about their potential risks. As Harari warns, without proper regulation and understanding, AI could lead to unforeseen consequences that could be catastrophic for our financial systems and society at large.