“The biggest companies could do the most damage.” – Marcel Stotzel, London-based portfolio manager at Fidelity International

ESG fund managers, who previously considered big tech as a lucrative bet for low-carbon, high-return investments, are now expressing growing concerns about the risks associated with artificial intelligence (AI) in the sector. Marcel Stotzel, a portfolio manager at Fidelity International, highlights AI as a “short-term risk to investors” and is concerned about a potential “AI blowback” leading to a significant market decline.

He cites examples like fighter jets with self-learning AI systems as potential triggers for unexpected events.

In response to these concerns, fund managers, including Fidelity, are engaging with companies developing AI technologies to discuss safety features such as a “kill switch.” This precautionary measure aims to address fears of AI systems going rogue and causing dramatic consequences detrimental to mankind. (Fortune)

ESG investing, though particularly focused on environmental, social, and governance objectives, has a significant exposure to the tech sector. The world’s largest ESG exchange-traded fund is dominated by tech giants like Apple Inc. (NASDAQ: AAPL), Microsoft Corp. (NASDAQ: MSFT), Amazon.com Inc. (NASDAQ: AMZN), and Nvidia Corp. (NASDAQ: NVDA), all of which are actively involved in AI development.

The article underscores tensions within the AI industry regarding the direction and speed of AI development. Recent events at OpenAI, including the firing and rapid rehiring of its CEO, Sam Altman, have brought internal disagreements over the societal risks of ambitious AI development into the public eye.

Investors, including major pension plans and sovereign wealth funds, are actively monitoring portfolio companies’ use of AI and are concerned about the lack of regulations and historical data to assess AI asset performance. Issues such as potential job cuts due to AI technologies and the social fallout are challenging to quantify.

Moreover, the significant increase in AI incidents and controversies since 2012 emphasizes the need for a cautious approach and regulatory measures in the rapidly evolving AI landscape.

It has been reported that several OpenAI staff researchers sent a letter to the board of directors, warning of a potent AI discovery with potential threats to humanity, which ultimately led to the ousting of CEO Sam Altman, according to a Reuters Exclusive. The letter highlighted an AI algorithm, Q* (pronounced Q-Star), as a catalyst for Altman’s removal.

Related Story:  A Powerful AI Discovery Triggered The Tumult At OpenAI (Reuters)

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