Artificial Intelligence Could Lead to Global Economic Recession

Andrew Bailey, the Governor of the Bank of England, warned about the potential negative effects of artificial intelligence on the global economy. In a letter to G20 finance ministers and central bank governors, he emphasized the risks of "cross-border" artificial intelligence systems. Bailey noted that advanced artificial intelligence models are exhibiting increasingly complex autonomy and problem-solving capabilities, stating that such systems have the potential to disrupt financial systems worldwide through cyber disturbances. Bailey added, "Recent developments indicate that many jurisdictions lack the necessary protocols for managing advanced artificial intelligence models. This situation increases risks in the financial sector and beyond." The bank governor's remarks coincide with a letter reflecting the concerns of engineers working in the field of artificial intelligence. Last month, 1,367 researchers and engineers called for international cooperation from governments in response to the rapid development of artificial intelligence technologies. Bailey also pointed out the impact of cyber risk on the financial system, noting that artificial intelligence has the capacity to significantly alter these risks. He expressed that the increase in high valuations and borrowing could exacerbate a potential future correction by feeding the current optimism in the markets. Bailey voiced his concerns that the convergence of these situations could trigger a major shock or a series of shocks. In conclusion, Bailey emphasized that those responsible for ensuring the security of the global financial system must take appropriate steps to support the safe and responsible deployment of artificial intelligence models. Such developments could lead to an increase in factors threatening financial stability worldwide.