AI might cause a ‘catastrophic’ financial disaster & possibly even spark a war, says renowned author Yuval Noah Harar

In the relentless march towards artificial general intelligence (AGI), concerns are growing about the unforeseen consequences of AI development. Renowned author Yuval Noah Harari recently shared his apprehensions, stating that AI could potentially lead to a 'catastrophic financial crisis' and even indirectly trigger conflicts.

As AI capabilities continue to evolve, Harari emphasises the difficulty in predicting the dangers posed by this sophisticated technology.

In an interview with The Guardian, Yuval Noah Harari, the author of 'Sapiens' and 'Homo Deus', warns that the multifaceted nature of AI introduces a wide array of potential risks, unlike the clear dangers associated with nuclear weapons. "With AI, we are dealing with a very large number of dangerous scenarios," Harari asserts, underscoring the unique challenges posed by the unpredictability of AI.

The need for regulation

Harari has been an outspoken advocate for the regulation and establishment of safety measures in AI development. He commended the recent multilateral declaration at the global AI safety summit, where the UK, US, EU, China, and Australia collectively recognised the potentially catastrophic risks associated with AI—a historic first in international collaboration on AI regulation.

"Without global cooperation, it will be extremely difficult, if not impossible, to rein in the most dangerous potential of AI."

Yuval Noah Harari, best-selling author of 'Sapiens' and 'Homo Deus'

A potential source of crisis

Harari draws attention to the finance sector as particularly susceptible to AI-driven crises. With AI's unique ability to make independent decisions and create complex financial tools, there is a growing concern about the technology's potential to surpass human comprehension, leading to virtually unregulatable situations.

"AI could develop financial tools far more complex than what led to the 2007–08 financial crisis. While not necessarily existential, it poses a catastrophic risk—economic, social, and political," warns Harari, pointing out the potential consequences of an AI-induced financial crisis.

AI's role in finance

Harari's concerns echo those of other experts in the field, including Gary Gensler, the chair of the US Securities and Exchange Commission. Gensler has previously cautioned that the increasing reliance on AI systems in finance could concentrate power on a few platforms, posing a risk to financial stability.

In this era of rapid technological advancement, Harari emphasises the urgent need for a regulatory framework and ethical guidelines to navigate the challenges posed by AI.

As we inch closer to a future intertwined with artificial intelligence, addressing these concerns becomes paramount for safeguarding our economic, social, and political landscapes.