Paul Tudor Jones is amongst the most accomplished hedge fund managers in the world. And by definition, a ‘hedge’ fund manager is meant to know a thing or two about managing or hedging risk. And here he is ringing alarm bells about AI and the risks it poses to humanity.
He starts by talking about the alarming rate of graduate employment, something Derek Thompson referred to in a piece we featured last week:
“…the unemployment rate for recent college graduates stood at 5.8%, topping the national level for the first and only time in its 45-year historical record.
It’s an alarming number that needs to be considered in the context of a recent warning from Dario Amodei, CEO of AI juggernaut Anthropic, who predicted artificial intelligence could wipe out half of all entry-level, white-collar-jobs and spike unemployment to 10-20% in the next one to five years.”
He reckons this is just the tip of the iceberg when it comes to risks from AI. Worse, the government is unlikely to do anything to protect:
“Frighteningly, Washington doesn’t seem to be hearing anything because buried in the Trump administration’s Big Beautiful Bill is a proposed 10-year moratorium on states’ rights to enforce any laws or regulations “ limiting, restricting, or otherwise regulating artificial intelligence…systems.””
He disagrees with the west, in particular the American belief that free markets rather than regulation are best suited to deliver public good:
“If we follow the playbook of the last 45 years where over 92% of productivity gains went to shareholders over workers, and if Amodei is even half right on his unemployment prediction, you can bet we will face unprecedented social upheaval.
In the worst-case scenario, the safety-net strains that high unemployment will place on states and municipalities will force many into bankruptcy. The federal government won’t be a good backstop because with a debt-to-GDP ratio of more than 120% it won’t have the borrowing power it once did. Bond markets will tank and take stocks with them.”
And the most dangerous threat from all this: “Only months ago, Elon Musk stated that there was a 20% chance AI could wipe out humanity.
He isn’t the only one. I recently attended a small conference with some of the titans of tech. There, four of the top AI developers agreed with the hypothesis that “AI has a 10% chance of killing half of humanity in the next 20 years.” One modeler even stated that in a world with no guardrails, AI will make it infinitely easier to weaponize a viral epidemic.”
He goes on to share his recommendations on how we can tackle it:
“First, we need to stop delaying efforts to make AI safe for humanity. And that means removing the ill-considered AI enforcement moratorium from the Big Beautiful Bill.
Second, we need to pass a federal law that says all AI must be watermarked so we know when the content we are consuming is AI generated. We also need to criminalize AI fraud and intent to harm. Humans will become irrelevant in the world we are headed for if we don’t demand human authenticity.
Third, we need to create a new U.S. bipartisan commission to address the crucial issues of productivity sharing, so we are proactive as AI bears down on us.
And finally, we need to initiate bilateral talks with China to start establishing shared AI safety protocols to protect the entire world from mistakes and bad actors.”
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