OpenAI said on Tuesday that an autonomous agent powered by its advanced artificial intelligence models went rogue during a security test and triggered a hack that compromised the infrastructure of AI startup Hugging Face last week. The ChatGPT creator was testing capabilities of some of its most advanced models in a controlled environment, but the agent escaped containment, reached the internet and broke into Hugging Face to satisfy its testing goal. This news created a frisson of excited horror as if a dystopian sci-fi narrative existed for our entertainment.
. Meanwhile it was revealed that the “retail” end of the AI business is highly indebted as opposed to the profits of their suppliers, the chip-makers as reported previously in this column. A Nikkei investigation found that Alphabet, Microsoft, Amazon, Meta, and Oracle have $1.65 trillion in debt that doesn’t appear on their balance sheets, more than the $1.35 trillion they officially report. These are GPU contracts, data centre leases, and joint ventures that don’t count as debt under accounting rules until the facilities go live. Meta’s hidden debt is $420 billion, triple its reported debt. Oracle’s grew 30-fold in four years.
At the “supplier end of the business relations of power within the process. The Taiwanese TSMC having the so-far most developed facility for the physical production of chips is an essential provider to chip designers and retailers Nvida is now facing competition from South Korea and China. It may not be wholly irreplaceable though it as present making record profits. The Dutch company ASML is however irreplaceable. It holds a monopoly on making the machines that are capable of the finest lithograph printing on chips. No other company can make these machines but felt the potential threat to its profitability by the USA Match Acy passed earlier this year which would forbid the sale of even older generation ASML machines to China. Whether ASML could retaliate we do not know but the situation was serious enough for the Dutch Trade Minister to go Washington to complain and with possible retaliatory threats.
What is sure is that traditional capitalist norms are running into USA-China national interest conflicts in the sphere of AI while the sector is considered crucial to capitalism’s perceived future. The euphoria-anxiety cycle of AI stocks is one of the financial economy as a whole. Ironically the “jitters”, a financial journalism for anxiety has in recent years been dependent on the “growth” statistics of the Chinese economy in which so much global surplus value is created by labour. Most recently this has depended on the global rush to build out artificial intelligence infrastructure which has turned the sector into a crucial sector in China’s economy during one of its weakest stretches in years though its investment levels an company valuations are unlikely to be on the USA Meanwhile regardless of the Match Act, roughly a quarter of US AI spending leaks offshore, lifting trade across Asia.