AI doomerism isn't on investors' list of worries
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Investors aren't much concerned with warnings that AI will "kill all humans."
The big picture: It turns out the potential for apocalypse brought on by a superintelligence is surprisingly bullish for AI companies — at least in the short term.
State of play: This week, insiders at Anthropic aired their concerns that AI could get out of control and destroy humanity.
- This kind of talk coming so soon before the company's expected IPO raised eyebrows and prompted jokes on social media.
- What it didn't do, particularly, was worry many AI investors.
Reality check: Asked if they care about the AI apocalypse, Naveen Sarma, an analyst at S&P, told Axios, "No."
- "They're not looking at, you know, does this company end civilization?" he says. "That isn't necessarily a question that comes up in our meetings."
"We are at a point where the focus is more on the revenue opportunity these companies have — given how fast they have grown," says Mandeep Singh, global head of technology research at Bloomberg Intelligence.
- The idea that these models are so powerful that they pose an existential risk, if anything, is a factor in their favor — it would mean that companies and governments are going to have to spend money on AI to defend against its risks.
- Because the threat is so high, in other words, corporate and government AI spending goes from being a discretionary nice-to-have, to a non-discretionary must buy. That's good for the bottom line of any AI company.
Zoom out: Anthropic's warnings and the idea of P(doom) (a measure of AI's likely risk) are getting a lot of attention and raising awareness. That's a good thing, some investors said.
- "That's what you want when you are doing an IPO roadshow," says Singh.
Yes, but: "Investors are all over the map," says Paul Kedrosky, a noted investor himself. Some believe all the doom talk could backfire by getting the White House to take a piece of the company, and dilute shareholders' investments, he says.
- Says Mark Malek, chief investment officer at Siebert: "It's telling that Anthropic's own founder has put a number on the odds that his creation could disrupt — or even endanger — humanity."
What to watch: "As an investor, I'm far less worried about AI ending humanity than about it causing operational or security failures with real financial consequences," he adds.
- Malek points to the example of CrowdStrike, which released a flawed software update a few years ago that wiped out a good chunk of its market cap.
- "That's the more realistic template for how an AI stumble — not a doomsday scenario, but an operational one — would actually hit a portfolio."
The bottom line: If the real risk here is the literal end of civilization, there's not much an investor can do.
- Existential risk is hard to hedge.
