Two headlines today abut the often predicted, yet to materialize AI boom & doom:
AI Runs Into Its Next Big Obstacle: Insurance
The artificial-intelligence industry’s phenomenal rate of growth means claims have the potential to outpace the limits on existing coverage
A string of artificial-intelligence safety incidentsis exposing a gaping hole for the fast-growing industry: the lack of available [insurance].
Rogue agents have [hacked into websites]. AI chatbots have been accused of [encouraging suicides] and murders. An agent submitted [fake unsolved murder tips]. The latest episodes add to existing lawsuits AI companies face alleging chatbot harm and [copyright] violations when models are trained.
The seemingly limitless possibilities of artificial intelligence to change the world also include a wide-ranging capacity for harm that could leave companies that produce or use AI legally vulnerable.
The biggest AI companies are racking up potential [legal liabilities] running into the tens—if not hundreds—of billions of dollars, as AI adoption spreads through the economy, according to insurers specializing in AI risks. Some industry officials have even called for the U.S. government to provide a liability backstop.
https://www.wsj.com/tech/ai/ai-runs-into-its-next-big-obstacle-insurance-8b2d4556
There are legal opinions that Section 230 of the CDA which generally shields sites from liability for comments others post may not apply to AI since it is the companies themselves, not “other users”, who are posting the processed information. IOW, if I post something damaging on the Fool site, the Fool is protected from a lawsuit for that content. If, however, the Fool itself would produce something libelous or otherwise harmful, it would not be.
Second story:
The Riskiest Corner of the AI Trade Is Crashing Into Higher Rates
CoreWeave selloff shows a pressure point from climbing borrowing costs
Investors staring down a world of higher borrowing costs have kept piling into AI with the belief that companies behind the globe-spanning data-center build-out would be immune. But there are exceptions—none more prominent than [CoreWeave].The [Nvidia]-backed compute provider has become a weather vane for one of the riskiest—and most highly leveraged—corners of the AI trade. This week, it endured a tornado.
When the sentiment was most dour Thursday—with tremors extending across chip makers and other firms riding the AI boom—Nvidia Chief Executive Jensen Huang spoke up. “CoreWeave’s strength is improving every day,” he said at a Bloomberg event. “I’m optimistic.”
The statement cut against a steep selloff in CoreWeave bonds sparked by renewed fears of AI’s profitability and [hot inflation data] suggesting higher rates are here to stay. The company’s stock had also crashed, at one point Thursday falling 28% from the start of the week.
So it’s not a rout, yet, but perhaps the beginnings of a slow motion train wreck?