The risks of artificial intelligence may exceed its opportunities if no adequate safeguards and ethical framework are put in place, IMF chief Kristalina Georgieva said on Friday, backing a blend of industry self-regulation and input from key governments.
The nascent technology was a dominant topic at this week's annual meetings of the IMF and World Bank in Bangkok, where the IMF on Tuesday flagged significant growth and financial stability risks from a potential end of the AI investment boom, high debt levels and a prolonged war in the Middle East.
During a panel discussion that included Anthropic co-founder Jack Clark, Georgieva said AI was already strengthening the global economy, but could also deliver negative shocks if it failed to deliver major productivity gains as quickly as hoped.
"If there are no safeguards, then the risks may exceed the opportunities. And above all, we do need an ethical foundation, and I'm not sure we are there as a society," she said.
On a different panel, Bundesbank president Joachim Nagel said AI has the potential to increase global imbalances.
"That is clear when one considers the large investments required for AI, both in hardware and software development," Nagel said.
Georgieva said certain preconditions needed to be put in place for people everywhere to benefit from the new and rapidly evolving technology, including access to digital infrastructure, access to electricity and adequate regulation.
Common sense standards
The bigger question now was how to create guardrails for a technology that was evolving so rapidly, Georgieva said, likening AI developments to Formula One race cars careening around with no barriers to protect the audience.
Industry self-regulation was appropriate, given that governments were not well-placed to regulate or oversee the constantly changing sector, but should include engagement with society. The countries with the biggest AI sectors, including the US, China and India, along with countries in the AI supply chain, should be involved, she told the panel.
"I think it's Formula One at night, without maybe brakes in the cars," quipped Anthropic's Clark, picking up Georgieva's analogy. He argued that setting standards was possible and was already starting through early policy frameworks in the European Union and voluntary commitments in the US.
Clark said his company regularly tested its systems, published details on the tests and shared the information, but he did not believe it should be completely voluntary.
Asked if he would favour regulation from the countries that produced AI, Clark said: "Yes. We need common sense standards, and that's how you ultimately give confidence in the technology and build the economy."
Harvard economist Dani Rodrik said we don't know if the productivity benefits from AI are going to materialize, creating a double-edged sword.
If the gains are realised, they could come with substantial job losses and displacement in affected sectors, but if they fail to materialise, heavy investment in data centres could trigger a costly financial correction, he said.
"We don't know which one of those two crises we're going to have to deal with — whether it's the jobs crisis or the financial crisis," Rodrik told Reuters after the interdisciplinary WZB Conference in Berlin last week.
Artificial or super?
US Treasury Undersecretary Erin Browne said that the IMF was too fixated on risks facing the global economy and should give more weight to opportunities for positive economic shocks, such as AI, which the US government is now calling "super intelligence."
On Thursday, Browne told Reuters that Washington was in talks with other IMF shareholders about adopting the new moniker in a joint statement being drafted by the fund's steering committee.
"I will continue to call it artificial intelligence," German finance minister Lars Klingbeil said.
Bank of England Governor Andrew Bailey told a meeting of the Institute of International Finance that he was more optimistic than a month ago that countries would reach alignment on testing standards for AI.
"I'm not sure whether we're supposed to talk about AI now, are we? I did use the phrase the other day 'the artist formerly known as AI'," he said.
Federal Reserve Chair Kevin Warsh also weighed in, telling Georgieva during a separate panel: "Kristalina, you pronounce it AI. In the US we now pronounce it SI."