The race to develop artificial general intelligence (AGI) has become a high-stakes financial endeavour, with trillions of dollars riding on the promise of a technological revolution. However, as leading AI experts warn, the path to AGI is fraught with risks that could lead to a devastating financial crash.
The numbers involved are staggering. An estimated $2.9 trillion is being spent on data centres, the backbone of AI systems, while the market capitalisation of Nvidia, a key player in AI chip development, exceeds $4 trillion. Major tech giants like Google, Amazon, and Microsoft are pouring vast sums into their AGI ambitions, with Meta (Facebook’s parent company) even offering $100 million signing bonuses to top AI engineers.
This financial frenzy is driven by the prospect of AGI, a theoretical state of AI where systems gain human-level intelligence across a range of tasks, potentially replacing humans in high-paying white-collar jobs. But as one of the “godfathers” of modern AI, Yoshua Bengio, warns, the progress towards AGI could stall, leading to a “real [financial] crash.”
“There is a clear possibility that we will hit a wall, that there’s some difficulty that we don’t foresee right now, and we don’t find any solution quickly,” Bengio says. “And that could be a real [financial] crash. A lot of the people who are putting trillions right now into AI are also expecting the advances to continue fairly regularly at the current pace.”
The pessimistic view is that investors are backing an unrealistic outcome, and that AGI may require a fundamentally different approach that the current AI systems cannot achieve, no matter how much computing power is thrown at the problem.
The financial implications of an AGI failure are severe. A slowdown or stagnation in AI progress could trigger a stock market crash, as tech stocks heavily influence the US stock market. Debt markets, particularly those linked to the data centre boom, could also suffer a jolt that ripples through the broader economy.
However, there are also optimists who believe that even without AGI, the transformative potential of generative AI tools like ChatGPT will justify the current expenditure. Benedict Evans, a technology analyst, argues that the investment figures are not unreasonable in the context of other industries, such as oil and gas extraction.
Nonetheless, the multitrillion-dollar expectation of achieving AGI remains a high-stakes gamble. As Sundar Pichai, the CEO of Alphabet, acknowledges, there are “elements of irrationality” in the current AI boom, and “no company is going to be immune” if the bubble bursts.
The consequences of success or failure in the race to AGI could have profound implications for the global economy and individual investors alike. As the financial world holds its breath, the future of AI hangs in the balance.
