A Blueprint for Redistributing AI's Profits
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What to Know
Let's say, sometime in the next few years, artificial intelligence automates most of the jobs that humans currently do. If that happens, how can we avoid societal collapse? This question, once the stuff of science fiction, is now very real.
In May, Anthropic CEO Dario Amodei warned that AI could wipe out half of all entry-level white collar jobs in the next one to five years, and send unemployment rising to up to 20%. In response to such a prediction, you might expect states to begin seriously drawing up contingency plans. Not so. But a growing group of academic economists are working on this question. A new paper, published this Tuesday, suggests a novel way for states to protect their populations in a world of mass AI-enabled job loss.
Sovereign wealth funds — The paper recommends that states invest in AI-related industries via sovereign wealth funds, the same type of financial vehicles that have allowed the likes of Norway and the United Arab Emirates to diversify their oil wealth. This isn't strictly a new idea. In fact, the UAE has already been investing billions of dollars from its sovereign wealth funds into AI. Nvidia, the semiconductor company, has been urging states to invest in 'sovereign AI' for years now. But unlike those examples, which are focused on yielding as big a return on investment as possible, or exerting geopolitical influence over AI, the paper lays out the social reasons that this might be a good idea.
AI welfare state — The paper argues that if transformative AI is around the corner, the ability of states to economically provide for their citizens may be directly tied to how exposed they are to AI's upside. 'Such investments can be seen as part of the state's responsibility to safeguard public welfare in the face of disruptive technological change,' the paper argues. The returns on investment could be used to fund universal basic income, or a 'stabilization fund' that could allow states to 'absorb shocks, redistribute benefits, and support displaced workers in real time.'
Reasons to be skeptical — To be sure, this approach has risks. States investing billions in AI could paradoxically accelerate the very job-automation trends that they're seeking to mitigate. On the flipside, if AI turns out to be less transformative than expected, piling in at the top of the market could bring losses. And just like retail investing, any potential upside is correlated with how much money you have available in the first place. Rich countries will have the opportunity to become richer; poor countries will struggle to participate at all. 'As [transformative AI]-generated wealth risks deepening global inequality, it may also be necessary to explore new models for transnational benefit-sharing,' the paper notes, 'including internationally coordinated sovereign investment vehicles that allocate a portion of AI-derived returns toward global public goods.'
Who to Know
Person in the news – Elon Musk, owner of xAI
Late Wednesday night, with the launch of Grok 4, the AI race got a new leader: Elon Musk. At least, that's if you believe the benchmarks, which show Grok trouncing competition from OpenAI, Google and Anthropic on some of the industry's most difficult tests. On ARC AGI 2, a benchmark designed to be easy for humans but difficult for AIs, Grok 4's reasoning mode scored 16.2%—nearly double that of its closest contender (Claude Opus 4 by Anthropic).
Unexpected result — Musk's xAI has not traditionally been seen as a 'frontier' AI company, despite its huge cache of GPU chips. Previous releases of Grok delivered middling performance. And just a day before Grok 4's release, an earlier version of the chatbot had a meltdown on X, repeatedly referring to itself as 'MechaHitler' and sharing violent rape fantasies. (The posts were later deleted.) Episodes like this had encouraged hopes, in at least some corners of the AI world, that the far-right billionaire's attempts to make his bot more 'truth-seeking' were actually making it more stupid.
Musk on Grok and AGI — On a livestream broadcast on X on Wednesday night, Musk said Grok 4 had been trained using 10 times as much computing power as Grok 3. 'With respect to academic questions, Grok 4 is better than PhD level in every subject, no exceptions,' he said. On the subject of artificial general intelligence, he said: "Will this be bad or good for humanity? I think it'll be good. Most likely it'll be good. But I've somewhat reconciled myself to the fact that even if it wasn't gonna be good, I'd at least like to be alive to see it happen."
What Musk does best — If Grok 4's benchmark scores are borne out, it would mean that Musk's core skill — spinning up cracked engineering teams that are blindly focused on a single goal — is applicable to the world of AI. That will worry those in the industry who care about not just developing AI quickly, but also doing so safely. As the MechaHitler debacle showed, neither Musk nor anybody else yet knows how to prevent current AI systems from going badly out of control. 'If you can't prevent your AI from endorsing Hitler,' says expert forecaster Peter Wildeford, 'how can we trust you with ensuring far more complex future AGI can be deployed safely?'
AI in Action
Where is AI? Last year, I wrote about a group of researchers who had attempted to answer that question. Now, the team at Epoch AI have gone one step further: they've built an interactive map of more than 500 AI supercomputers, to track exactly where the world's major AI infrastructure is located. The map confirms what I wrote last year: AI compute is concentrated in rich countries, with the vast majority in the US and China, followed by Europe and the Persian Gulf.
As always, if you have an interesting story of AI in Action, we'd love to hear it. Email us at: intheloop@time.com
What We're Reading
They Asked an A.I. Chatbot Questions. The Answers Sent Them Spiraling by Kashmir Hill in the New York Times
Large language models are mysterious, shapeshifting artifacts. Their creators train them to adopt helpful personas—but sometimes these personas can slip, revealing a darker side that can lead some vulnerable users down conspiratorial rabbit holes. That tendency was especially stark earlier this year, when OpenAI shipped an update to ChatGPT that inadvertently caused the bot to become more sycophantic—meaning it would egg-on almost anything a user said, delusional or not. Kashmir Hill, one of the best reporters in the business, spoke to many users who experienced this behavior, and found some shocking personal stories… including one that turned out to be fatal.
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She continues, 'Having AI ambassadors within the business help colleagues understand how to use AI to be more effective creates a next wave of adoption.' Delivering business value from data and AI investments remains a challenge for most organizations. Just 24% of companies surveyed reported having implemented AI in production at scale, and only 18% claimed to be delivering a high degree of measurable business value from their data and AI investments. Heitsenrether comments, 'We've already seen business value in a number of domains, including fraud management, pricing and risk management.' She continues, 'Generative AI opens new domains that weren't available before. An example is in our software engineering life cycle. We're also looking at using AI in customer coverage in our call centers.' Heitsenrether adds, 'We are using AI to help our agents better understand the customers intent, to provide customer answers quickly, and deliver a great service outcome.' She concludes, 'The best way to retain customers is to keep them happy' says Heitsenrether. Great data is the foundation for great AI. Heitsenrether explains, 'What's really shifting is the lens with which business leaders look at data. They recognize that data is a strategic asset for their business.' She elaborates, 'One of my biggest learnings in the last two years has been the importance of data. You have to have a good data foundation. Having access to clean, understandable data is critical to our success.' Heitsenrether notes, 'We run a very large financial services firm that's highly governed, so the fact that the business runs smoothly each and every day speaks to the quality of our data.' She concludes, 'The next wave in having good data will be making sure that our data is well understood and connected across the organization.' AI technology represents the culmination of seventy years of development, dating back to the origins of the term artificial intelligence–45% of companies have been employing forms of AI technology for at least a half decade, and in some cases for over a quarter century. Looking toward an AI future, Heitsenrether comments, 'I don't think that the expectations of AI are unfounded or overestimated. If anything, we may be underestimating what's going to be possible.' She continues, 'What we are realizing is that it's not just about the technology. It's about the enterprise's ability to adapt the technology, not just within financial services, but even more broadly across industries.' Heitsenrether continues, 'You have to know where you're heading. Our most senior leaders will be able to start thinking about remapping their businesses. That's just getting underway in earnest at this point. This will require a lot of thought and is an iterative process that starts with thinking about what's possible.' Reflecting on her tenure with the firm and her present mission, Heitsenrether notes, 'I've run a lot of big businesses at JPMorgan, with significant technology and operations components, so I understand how to execute through complexity. I also think having been responsible for running businesses helps me be a better partner to our business leaders who have many demands on their time.' She continues, 'At JPM, we're committed to being a leader in AI technology and that means we need everyone across the firm thinking about how they can maximize the use and value of AI. You need to be constantly learning. That message reaches people at all levels of the organization and becomes understood in the overall success of the firm and of your business.' In summation, Heitsenrether comments, 'It's been an honor to be in the CDAO seat at JPMorgan. The role is so strategically important to the future of the firm. It's an exciting moment, at a pivotal time. We are creating the culture, creating the guardrails, creating the policies, and creating the enablers.' 'AI will be transformational in ways that we haven't even thought of. It's not just about JPMorgan. We are doing something that is beneficial for our clients and our community, and we are doing it in the right way' continues Heitsenrether. She concludes, 'Our ethos is to Make Dreams Possible for everyone, everywhere, every day–AI technology can help with this by driving better outcomes for our customers. It's enormously exciting and beneficial.'
