Too Big to Fail, Too Catastrophic to Insure: Making the Labs Pay for AI's Risk
Fernando Moreno
The multiple labs developing AI models compete with one another under the pressure of an “arms race” (Scott Alexander’s Moloch problem). This creates a unilateral incentive to cut corners on safety protocols, amplifying risks. One of the arguments frequently raised against an eventual pause by the labs is that the arms race also takes place between nation-states (the “new cold war” between the US and China), making the geopolitical problem more complex given the difficulty of credibly enforcing agreements not to develop the technology.
Considering this, this article proposes a stopgap solution: shared financial liability among labs. If a lab causes damage that exceeds its ability to pay (even driving it into bankruptcy), the remaining labs in the industry are jointly and severally liable for the excess, with each firm’s share proportional to its own risk profile (measured by compute, parameter count, revenue, or a combination of several metrics).
We should be clear here that the proposal does not solve existential risk — the scenario in which humanity is extinguished or permanently loses control over its future. It is argued, more modestly, that there is a band of Global Catastrophic Risk (GCR) — events of terrible but non-terminal harm — for which financial liability instruments have real power to discipline behavior, precisely because they presuppose the existence of an “after” in which compensation still means something. Nevertheless, even this mechanism could, to some extent, help reduce existential risk, if it makes the labs more careful overall.
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@misc {
title={
(HckPrj) Too Big to Fail, Too Catastrophic to Insure: Making the Labs Pay for AI's Risk
},
author={
Fernando Moreno
},
date={
},
organization={Apart Research},
note={Research submission to the research sprint hosted by Apart.},
howpublished={https://apartresearch.com}
}


