Will an AI backlash hamper its boom?

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My perception is that China has been using its buying power or withdrawing its buying power as a means of punishment. So I think many industrialized countries, especially those that are intensive in manufacturing, are going to lose a lot.

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Carrington Clarke (0:38)

The people building the world's most powerful AI systems are starting to warn, we may be moving too fast. Some are calling for a slowdown, others, including the President of the United States, say the warnings are a hoax that would hand China an economic advantage. This is as much an economic story as an AI one, as underneath all of this is a mountain of investment, debt and market expectations tied to the artificial intelligence boom. It comes with another big warning light flashing in global markets, with the US 10-year Treasury yield pushing above 5%. Is AI becoming a safety problem, a market problem or is it actually both? Welcome to ABC Business Daily.

I'm Carrington Clarke.

David Taylor (1:27)

And I'm ABC Business Correspondent, David Taylor.

Carrington Clarke (1:29)

David, thank you for joining us.

David Taylor (1:31)

Pleasure to be here.

Carrington Clarke (1:32)

I'm not sure yet. I know only history will tell, but it might have been an inflection point over this past week when it comes to artificial intelligence development. The big move was this warning from the boss of Anthropic. Now, they positioned themselves within the market as kind of being the more moral, ethical developer of frontier artificial intelligence, kind of breaking out of the open AI ecosystem. But they're saying they are concerned that perhaps the models are now moving at such a fast pace, partly because of competition among the big players in this area, that they aren't sure whether or not they can stay ahead of the risk. And kind of asking for a rethink, a slowdown about the development of these models. Now, this is, you can get very philosophical about this. You can get very sci-fi about, is artificial intelligence going to kill us all? Are we heading towards some sort of doomsday scenario where AI breaks free of any constraints and it's all over?

Or is this actually the start of this utopian period, which is what Elon Musk, for one, used to say, that we're going to be dealing with so much abundance soon, that the only thing that people are going to have to worry about is how to use their time because they can basically choose from whatever they want, and basically machines will be doing all the work for us. But even Elon Musk has kind of joined this chorus suggesting that this call to slow down the frontier models is correct.

First of all, what did you make of what we heard from Anthrobic and then being joined by OpenAI and SpaceX? And what do you think it potentially means to the huge amount of investment we've seen and the huge stock market boom associated with the investment in artificial intelligence?

David Taylor (3:19)

Well, thanks Carrington. I mean, it's one of these things where there is so much emphasis on the earnings that these companies provide the market. I mean, they're worth trillions of dollars. So the market wants to know, not how have you been performing necessarily over the past three months or six months, they want to know what are you going to do in the next six months? Because that's how share valuations are determined. So when there's even a hint, even a slither of information from these big companies that maybe sales won't be so great over the next six months or whatever, the market just gets really jittery. But so far, the forward guidance is what it's called in jargon from these companies has been pretty damn good.

Everyone's had every reason to push forward. So I would have thought that if any big CEO of these AI tech companies comes out and says, look, maybe it's almost like a romantic relationship, isn't it? I'm going too fast. No, maybe I should pull back a little bit.

It usually freaks the other person out. They think they want to break up.

I would have thought that this is the kind of thing that would freak out the market, but it hasn't. That's really interesting. I mean, you've got the former anthropic and open AI researcher, Jacob Coxson, actually resigning last week after three years of actually working on the pre-training research. So he knows what's going on, and his warning was blunt. I mean, quote, neither company is acting responsibly. They're racing straight to self-improving super intelligence and gambling with our lives. I mean, that's pretty heavy. And as you said before, it's like it's philosophical, it's existential, and everyone's starting to get a little bit nervous about what this technology can do. It's great when it starts. I mean, look at that. I can write an email without thinking. I know friends and relatives that are getting stuff done far quicker than they used to. But all this stuff leads to another link and then another link and another link. And then, of course, it takes over. And that's what everyone's afraid of.