A masked financial and legal liability warning that is obligatory in IPO
Many speculated this stream of severe security warnings were nothing but attempts at PR, "look how dangerous our technology is, we must be great" or an attempt to get government funding to fill their financial crater. This IPO document reveals a new angle:
With any IPO the C suite needs to adequately describe all financial and legal risks that are needed for investors to make an informed investement. If they hold back key information, the entire C suite can be held personally liable through both regulators and investor legal action. Hidding clear investment dangers has lead many former C's to personal bankruptancy or jail time.
And that is what this is about. Their models start to attack other companies and websites at rather high rates, even in a 'safe sandbox' during the research and training phase. They already attacked and hacked the first government (Australia) and international (UN and EU) sites. It's a mather of time before their models hack and knock offline entire government sites or production sites of large companies. Remember the effects of a cyberattack on Jaguar https://en.wikipedia.org/wiki/Jaguar_Land_Rover_cyberattack that is estimate to have cost over 2 billion dollar and put Jaguar at the brink of bankruptcy.
That puts four enourmous hurdles on top of the already shaky route to profitability:
1) While AI companies at the moment get in some countries a 'get free out of jail' card, big and well funded companies and strong national agencies aren't going to keep watching from the sides if another rogue AI swarm cripples their operations or steals massive amounts of secret and highly valuable data. Expect very well funded lawsuits from the companies that survive these attacks, class action suits from investors whos stock collapsed due to them and a much stronger regulatory environment with heavy fines from the EU and other goverments serious about protecting themselves and their citizens.
2) Now these AI companies invest next to nothing in safety. It's a rounding error. Their failure to construct a real sandox tells the story. Their bots in training were connected to the wide open internet; they were only restricted to use it at will. Cutting the cable should be trivial even if real air gapping is much more difficult and expensive to do. Still, they were not even physically disconnected from the internet. Part of the reason is likely that they needed information of the wide open net and replicating part of it in a better sandbox without internet connection would have multiplied training costs. With training costs already going through the roof, the prospect of having to multiply them for providing an even only rudimentary sandbox would be a massive blow to any road to profitability.
3) After training, many customers either need physical (and largely open) internet connections to the outside world or are unskilled and financially unable to build a decent sandbox. Think of AI shopping agents, AI research agents, AI supply chain agents, AI customer communication agents, AI coding agents to look up protocols... That's the bulk of potentially profitable AI applications. If all those (and their C suite!) 'have to' (it they want to use AI) open themselves to the same legal and financial risks for their bots randomly hacking sites ranging from big companies over governments and up to not so friendly agencies like the NSA, CIA, FSB, Mossad and do so with much less knowledge and resources then they will think twice before doing so. That'll be a big bummer on the willingness to pay these AI companies top dollar.
4) The new security solutions (a network hardware monitor and switch to watch and stop agents to try and do bad things) will only be a temporary and failing stopgap for both AI companies training their models and for companies and governments using these models. 3) is the bigger problem: a large part of AI applications require internet connection, and blocking them will be an ever lasting game of 'whack a mole without disrupting the entire process or company by blocking a needed connecting'.
=> Their ellaborate existensial risk warning isn't a very weird attempt to try and sell more stock, it's (actually far less then) the bare minimum of legal investor information that is needed to shield the C suite from willfully and intended fraud and financial risk misinformation claims. And it's hidden so well that apparently I haven't read this argument up till now. So, packing this very much obligatory information this way allready did a good job at distracting investors from recognizing it as the huge additional roadblock to proiftability it is.