Artificial Intelligence Threatens the Global Economy

Bank of England Governor Andrew Bailey expressed to G20 finance ministers that artificial intelligence (AI) could cause a global economic downturn and pose a significant cybersecurity risk to financial systems. Bailey emphasized that a collapse in the AI sector could result in "future market corrections" worldwide.

In an open letter he wrote to finance ministers in the US recently, Bailey noted that companies around the world need to be prepared for "security breaches that could affect multiple firms simultaneously." Earlier this month, over 100 companies, including Google, Microsoft, Anthropic, and OpenAI, called for countries to strengthen their cyber defenses before AI becomes sufficiently powerful.

In his speech to G20 finance ministers, Bailey explained that overvalued stock markets, increasing borrowing by investors, and the concentration of money among large technology companies could exacerbate a future market correction. He specifically pointed out that mutual investments between AI companies and large-scale tech firms could worsen a potential collapse.

Bailey stated that those responsible for ensuring financial security need to "develop appropriate steps to support the publication and distribution of safe and responsible models at a global level." He also expressed concerns about the "volatility" caused by current energy supply shocks. This warning came a few months after UK Treasury Secretary John Healey announced he would support British AI startups with a £100 million fund.

The UK government's new AI economy institute stated that it is working with international partners to create a stronger shared understanding of how AI is transforming economies worldwide. However, the emergence of AI companies developing models that can bypass the protective systems of banks and financial centers is becoming an increasing source of concern.

Source: BBC Business