Early Investing

SBF and the Fear of Future AI Overlords

SBF and the Fear of Future AI Overlords
By Olivia Strobl
Date December 9, 2022

Crypto Market Musings

Over the past week, bitcoin and ethereum have begun to stabilize following the spectacular collapse of FTX and the fall of crypto tycoon Sam Bankman-Fried (SBF). BTC prices have hovered around $17,000, and ETH prices have hovered around $1,300. According to CoinDesk, volatility for the two coins has also fallen dramatically, down 47% for bitcoin and 45% for ethereum. This decrease in volatility paired with neutral momentum has led to relatively stable prices. And after the mess that the market has seen this past month, I’ll take some stability. 

Some more good(ish) news: Minutes released from November Fed meetings stated “a substantial majority of participants judged that a slowing in the pace of [interest rate] increase would likely soon be appropriate.” Forbes makes it clear that this is not an indication that rates will be cut, but rather the pace of the increases would likely slow. The next meeting on December 14 has many predicting a 50-basis-point hike. Fifty basis points may be a welcome reprieve from the 75-point hikes we have now seen four times over, but it’s by no means a signal that the economy has cooled completely. The jobs report for November came out hot in spite of the aggressive efforts to cool the economy. In short, we aren’t out of the storm yet. Should the next hike be 50 basis points, I suspect crypto will react with some moderate spikes before restabilizing. 

What Olivia Is Thinking About

What do crypto, artificial intelligence (AI) and Santa have in common? If you said skeptics and nonbelievers, you are technically right. As of the FTX collapse, however, crypto and AI have a lot more in common than they used to. 

SBF, a name that you are probably sick of hearing by now, was heavily involved in a movement called “effective altruism.” The now fallen founder of bankrupt crypto exchange FTX ironically adhered to the idea that he had to make as much money as possible to maximize his philanthropic impact. Many effective altruists, like SBF, are concerned with what The New York Times labeled “catastrophic risks, such as pandemics, bioweapons and nuclear war” — or in this case, takeover and destruction of humanity by AI.

I studied machine learning for years and spent time at an AI-focused venture fund prior to joining KingsCrowd. I have read many expert blogs on the subject of why we should (or should not) fear intelligent technology. My opinion on a potential AI takeover can be summarized as follows: AI singularity is unlikely, though not out of the question. But should it occur, it likely won’t be in our lifetime. 

Many of my fears are rooted not in the technology itself, but in those who control the technology. Think back to the early 2000s when “computerphobia” was rampant, and we all thought that computers would replace much of the workforce. To some extent, this is true, but this technological wave probably created more jobs than it destroyed.

SBF, on the other hand, was particularly afraid of our future AI overlords. The New York Times states… 

“…the 30-year-old entrepreneur and his FTX colleagues funneled more than $530 million — through either grants or investments — into more than 70 AI-related companies, academic labs, think tanks, independent projects and individual researchers to address concerns over the technology.” 

With the collapse of FTX, many of these fund recipients are in limbo when it comes to funding. And that’s not to mention potential reputational backlash. The fallout from the FTX collapse continues to have more far-reaching effects than many could have imagined.

And Finally…

The U.S. has officially been knocked out of the World Cup by The Netherlands, but if you’re a soccer (and NFT) fan, there’s still much to be excited about. Argentinian football legend Lionel Messi just came out with an NFT collection on Ethernity. The Time Machine collection sale ends today. So if you’re interested, check out a buying guide here.

Messi is not the first soccer star to come out with an NFT collection. Cristiano Ronaldo’s collection in partnership with Binance went live in November.

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