What we face: We have gone through occasional crises like the financial crisis of 2008 and the pandemic of 2020. Next year will be different. The real risk is a chain reaction: one shock triggers others – faster than we can process them and caused by AI dynamics we don’t fully understand.
- Call it chain reaction chaos.
- And this in the context of this era of post-process velocity: the speed of change exceeds the capacity of any individual, business, market or government to fully absorb, understand and respond.
The reason This scenario seems so likely because many obvious risks, all with relatively high probabilities, continue to pile up. Any one of them will shake up already highly volatile markets and policies:
- Cyber chaos. Last week, a big siren sounded. AI-detected flaws in PHP, the code behind millions of websites, have knocked government sites offline around the world and prompted the National Security Agency to warn organizations to immediately patch or crash. Major banks have discovered unauthorized AI agents in customer accounts, some trying to take actions customers never requested. And Anthropic’s deputy chief information security officer, Jason Clinton, warned that as bad as the past few days have been, cyber threats will “get worse before they get better.” Salesforce CEO Marc Benioff quickly agreed, writing on X: “Code red.” As Madison Mills reported for Axios, AI companies and banks are scrambling to plan “day by day,” fully anticipating a larger cyber hit in the coming months. People at big AI companies tell me the chances are well north of 50%.
- The AI bubble bursts (partially). This doesn’t feel like 1999, as giant corporations with huge balance sheets support the AI boom. But that’s also the problem. They’re increasingly doing it with borrowed money: Goldman Sachs expects about a third of Big Tech’s capital spending on AI to be financed by debt this year. A bubble need not burst spectacularly to cause widespread economic and political suffering. These companies are deeply intertwined, investing, selling and buying from each other. Look at what happened with Meta last week: It crushed its profits, but then scared the market by detailing the difficulties of raising capital to finance AI. Any sign of overbuilding… or companies underutilizing AI… or China catching up… or AI prices collapsing… or credit costs rising… or political backlash escalating, and markets could collapse quickly. A sharp correction looks like a 50%+ scenario in the near term.
- AI achieves true RSI. AI could improve, faster than almost anyone expects, thanks to recursive self-improvement (RSI). The people at Anthropic, OpenAI, and Google see this happening now. This could be great in the long run if we pilot the technology intelligently. But it could also prove extremely disruptive in 2027: more advanced AI would pose a more urgent threat to industries, businesses and jobs. One could easily imagine this prompting Democrats to join Sen. Bernie Sanders (I-Vt.) in demanding a slowdown or complete pause, which would shake the markets.
- The war spreads, oil soars. President Trump’s aides say he is likely to resume war in Iran after the election. The Iranians warn that they will expand their targets in retaliation. The United States has reduced staff at its embassies across the Middle East in the face of growing threats. An escalation seems more likely than not at a time when oil supplies are tight and gasoline and diesel prices are very high. Imagine the economic suffering of oil held at $120 per barrel.
- An aging and unbridled president. I want to be clear here: this is not a political statement or an assessment of Trump’s health. I would write the same thing for Joe Biden. This is a simple, factual observation based on actuarial tables. Trump, 80, enters the next two years as the oldest person to ever be president. It is a medical certainty that the risks of mental decline and disability increase considerably from the age of 80. Trump is a lot like Biden in that he doesn’t have people around him who can level him up. The risk extends from health episodes to judgments on war and the limits of presidential power.
What You can do: I say this so as not to scare you or make you give up and distance yourself from reality.
- You can only make wise decisions about your career, your life, and your family if you live in the future, understanding what’s coming, and experiencing these historic moments with your head in the game.
- Axios’ expert journalists work hour by hour to be your clinical and helpful guide to these dizzying times.
Three very practical steps:
- Know: It’s an exciting time to be alive. So discover AI – the good, the bad and the ugly. And think more deeply about what you expect from your employer and your elected officials.
- Be vigilant: Last week’s Axios report on AI agents showed the importance of locking down your passwords. Place each account in a secure password manager with a unique password. Use access keys when offered. Protect your email and phone with an authenticator app, because whoever controls them can reset everything. And do not give a password or login code to anyone who contacts you, human or AI agent.
- Be prepared: Last week also showed how A.I. East the market. So if you have a 401(k) or other investments, make sure you understand how concentrated you are in different sectors. Look for smart diversification strategies. And find a few news sources, like Axios, that you can trust to make sense of all this madness.
The bottom line: It is easy to pretend that none of these risks will materialize. But when you add these numbers up, the overall risk of a crisis beyond our direct control increases by the day.
Gn bussni
