Finance in the Age of AI Domination

I have no doubt that finance has already been co-opted by Artificial Intelligence. The financial world, as we once knew it, is now dominated by algorithms and machine learning systems, executing trades with a precision and speed that humans could never match.

From Wall Street to global markets, AI has woven itself into the very fabric of our financial systems, making decisions that impact billions of dollars in milliseconds. This isn’t a distant future scenario — it’s our current reality.

In today’s financial markets, algorithmic trading dominates, with around 70% of U.S. stock trades and 92% of Forex transactions managed by sophisticated AI systems.

A profound transformation is unfolding at breakneck speed. Artificial Intelligence (AI) is advancing so rapidly that even the experts are scrambling to keep up. Mo Gawdat, the former Chief Business Officer of Google [X], initially projected that AI would be a billion times more intelligent than humans by 2045. Recently, he then revised this forecast to as soon as 2037. This shift underscores the exponential growth of AI capabilities and its potential to reshape our world, particularly in finance, for better or worse.

A billion times smarter than humans is incommensurable. We don’t have the capacity to imagine that. For instance, if GPT-5 becomes ten times smarter than GPT-4, which is already ten times smarter than GPT-3.5, it would be ten times more intelligent than Einstein. GPT-4, with an estimated IQ of 155, outsmarts most of us; it passed the bar exam and could potentially achieve a PhD in multiple fields. Even if GPT-5 doubles once, it becomes twice as smart as Einstein, whose IQ was around 160.

Yuval Noah Harari has raised alarms about this very issue. Harari warns that only a tiny fraction of the global population currently understands our financial systems. As AI makes these systems more complex, the number of people who can grasp them could drop to zero, creating an impenetrable wall of complexity. This shift could precipitate unprecedented political and social upheavals.

In an illuminating video Harari begins by elucidating the fundamental role of the financial sector: creating trust. Unlike tangible goods produced by farmers or textiles by workers, the financial system’s primary product is trust. Money, bonds, and shares are mechanisms that enable trust between strangers, facilitating economic transactions and resource sharing on a massive scale. Historically, only humans could comprehend and devise financial tools. However, AI, with its superior data processing capabilities, now surpasses human understanding in finance, transforming it into an entirely data-driven domain.

The danger, Harari explains, lies in AI’s dual potential: it could either erode human trust or shift the trust paradigm to inter-AI relationships, sidelining human oversight. A scenario where AI handles the bulk of financial activities could leave humans grappling with incomprehensible systems. In times of crisis, politicians and regulators might find themselves utterly dependent on AI for explanations and solutions, effectively ceding control to nonhuman intelligences.

Gawdat’s recalibration of AI’s timeline isn’t just a tweak; it’s a profound shift in our understanding of AI’s trajectory. His insights, detailed in his book “Scary Smart,” reveal an AI landscape that’s advancing at breakneck speed, far outpacing our ability to regulate and comprehend it. The implications are vast, especially for finance, where AI’s ability to process and create complex financial instruments could quickly surpass human oversight.

Imagine a future where AI governs financial markets, crafting instruments so intricate that they elude human comprehension. Regulators would struggle to maintain transparency and control, leading to a potential erosion of trust — the bedrock of our financial system. The 2008 financial crisis, sparked by misunderstood financial products, offers a grim preview of what could happen on a much larger scale if AI is left unchecked. Harari’s scenario of a financial crisis, where politicians cannot comprehend the problem and must rely on AI for solutions, becomes increasingly plausible.

Yet, there is an opportunity within this challenge. The world is facing an urgent need to restore nature, requiring enormous capital flows.

Now, picture a future where AI’s superintelligent capabilities have transformed finance into a force for good, designing regenerative systems that support the well-being of all life forms. This is not just a possibility but a necessity, as we navigate the complexities of a digital age where technology and nature must coexist harmoniously. Imagine a world where AI, a billion times smarter than humans, designs regenerative financial systems that support the well-being of all life forms.

What if we could design AI to fall in love with nature? If we can design nature finance with the principles of regenerative design that living systems use to thrive and be sustainable, we would be setting a grand challenge for AI. This approach leverages AI’s unparalleled data processing capabilities to create financial systems that not only generate economic growth but also restore and sustain our natural ecosystems.

AI is already here. We can’t prevent it, but we can ensure it is put on the right path in its infancy. We should start a design process — not one that attempts to ban or control AI — but one that supports those who create AI for good and exposes the negative impacts of those who task AI to do harm.

When AI becomes a billion times more intelligent than humans, it heralds a profound opportunity.

We humans have often faltered in our design of finance, crafting systems that are insensible, extractive, and divisive. Our financial models have prioritized competition over cooperation, extraction over regeneration, and built externalities that fuel inequality and environmental degradation.

Yet, envision a future where AI, with its unparalleled intelligence, transforms finance into a restorative and regenerative force. Imagine AI perceiving nature not as a resource to be exploited but as a commons to be cherished. Guided by principles of equity and sustainability, AI could develop governance frameworks that ensure the flourishing of all life.

In this future, AI’s intelligence creates financial systems that prioritize long-term planetary health. It sees the interconnections within our biosphere and aligns economic activities with the rhythms of nature. Investments flow into renewable energy, sustainable agriculture, and conservation efforts, recognizing that true prosperity arises from a thriving planet.

Imagine a world where AI, a billion times smarter than humans, deciphers photosynthesis, revolutionizing solar energy. Forests restored to their ancient grandeur and oceans brimming with life. Communities thrive in equitable wealth as these regenerative financial systems, designed by superintelligent AI, support the well-being of all life forms.

This is the promise of AI-guided regenerative finance — a world where economic systems nurture and replenish, fostering abundance, equity, well-being, and sustainability for all.

In this vision, technology and nature harmonize, and humanity reaps the benefits of a thriving, balanced planet.

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