Add The New York Post on Google “If you’re worried about a bear market, sooner or later you’re going to be right. But think about how much money you’re leaving on the table.”
Those were the words of a venerable market sage who helped school me on the vicissitudes of Wall Street many years ago. They are also words to live by whether you’re trading stocks, planning your next career move, or weighing if we should ditch AI because it’s a supposedly apocalyptic technology.
Yes, AI is driving up electricity bills and crimping some water supplies, and it could make humans slaves to robots or start World War III. But what is the risk to mankind if we instead decide to do nothing? Will we be better off ceding this technology to the Chinese? Would we be safer if we stopped all AI development including potentially game-changing health research?
If history is any guide, the risk of sitting on the sidelines is always greater than the downside of taking calculated risks that can be managed. The best Wall Street minds I have observed over the years, from the legendary trader Alan “Ace” Greenberg to empire builders like Jamie Dimon and Larry Fink, never walked away from market risk because they could lose money.
For all the possible landmines of risk taking — and they are too many to calculate — they knew there were always many more good trades and deals to be had.
Imagine if we walked away from cars because of environmental fears stoked by “experts” like Al Gore and Greta Thunberg. Remember the Y2K hysteria of the late 1990s? Headline-grabbing warnings that the internet could suffer a massive cardiac arrest — taking our energy and security infrastructure with it — ended with a shrug. The internet poses many risks, from exposing our children to predators to facilitating terrorism, but consider a world without it.
For decades, the late Ace Greenberg famously cashed in losses so he could pursue the next big winning stock trade. Would Larry Fink have created the largest money management firm, BlackRock, if he let his own huge losses in the mortgage market — now a footnote in his tenure that dates back to the 1970s — lead him to pack it in? People also forget that Jamie Dimon built JPMorgan Chase into the nation’s premier bank after miscalculating his stroke years earlier inside Citigroup and getting on the wrong side of a management upheaval.
I write this not as an expert financial risk taker, but as a long-time observer of the best in the business: What they all have in common isn’t fear of losing (though they hated the thought of it), but an ability to learn from their losses and incorporate those lessons into their game plan.
The AI tech bros — worrywarts like Sam Altman of OpenAI and Dario Amodei of Anthropic — could use a little of what these men brought to the table as the bros sound alarm bells about what they’re creating inside their labs.
We can’t dismiss the concerns they’re raising out of hand, of course. AI is already eliminating jobs. Rural communities where data centers get built complain that their benefits in terms of jobs don’t offset their higher utility bills.
But these risks can be mitigated. The commoditization of jobs is a downside of all emerging technologies while the upside has always been creating new and better-paying ones. Rural communities can demand that AI centers be more energy self-sufficient.
Notice that Altman and Amodei aren’t talking as much about these very real downsides impacting Middle America. Rather, they’re channeling their nerd fears of robot Armageddon. (Are they Trekkies or “Star Wars” geeks?) They point to the recent “Hugging Face” incident when OpenAI bots broke out of their playpen and hacked into another AI network.
Why couldn’t they also hack into the Pentagon’s weapon system and hit the proverbial button to start a nuclear war? The best way I can answer that is by channeling my inner Ace Greenberg: Calculated risk means embracing it, planning and fixing the glitches like those that led to the Hugging Face drama and probably dozens of others we’re about to discover.
Ceding the technology to bad actors like the Communist Chinese will exponentially increase the risk to mankind since they will use whatever technological advantage they have to pursue their warped expansionist aims.
Here in the US, AI moguls must also take responsibility for the screwups — and then work to prevent them. After all, they’re the ones creating those AI bots going rogue and they’re the ones best equipped to fix it.
There is a feeling, particularly in the Trump administration, that the geeks really aren’t worried about AI taking on the world. They want stifling regulation to thwart competition and lock in their market dominance as both seek to become public companies.
Possible. Either way, their over-reaction should be ignored by policymakers. There’s too much risk in doing nothing, as Ace, Jamie and Larry would tell you.
