Why Everyone’s Suddenly Worried About an AI Apocalypse

0:00Corporate megastores are spending millions lobbying DC politicians on one-sided policies that send small businesses tumbling. They want to enact harmful credit card mandates that take resources away from your local credit union and community bank. Leaving Main Street businesses with less access to credit, making it harder for your family to pay for everyday goods like gas and groceries. Tell Congress to guard your card and oppose the Durban Marshall Credit Card mandates. Paid for it by the Electronic Payments Coalition. Conflict escalates in the Middle East as Trump's advisors raise the possibility of a year's long war. Plus, U.S. bond yields again are hitting multi-year highs. And an anthropic researcher says AI could kill us all. How would that work, exactly? At some level, what people are most scared of is that we don't even really understand all the different ways that it could happen. This Thursday, September 10th. I'm Alex Osselef for The Wall Street Journal.

1:01This is the PM edition of What's News, the top headlines and business stories that move the world today. We begin tonight's show in the Middle East, where conflict is heating up. Yemeni and Saudi officials said that Iran-backed Houthi militants have seized the strategic port city of Moka on Yemen's west coast. That further expands their control near the Bob El Mendeb choke point for energy exports through the Red Sea and deepens the threat to Saudi oil exports, which are still struggling to make it out through the straight-of-form moves. On that side of the Arabian Peninsula, Iran is trying to break a stalemate in the straight-of-form moves by escalating the conflict with the U.S. Iranian forces have launched missiles at American warships at least three times in the past week, taking direct aim at the U.S. Navy in a way that it hasn't done since the start of the war. And the journal has learned that Iran has renewed capabilities to launch attacks like these. Iran has resumed its production of ballistic missiles using stockpiled components and working in underground facilities.

2:03That's according to officials from the U.S. and Middle East. The intelligence erodes what the U.S. and Israel have touted as a major achievement of the war. With the conflict showing few signs of evading, top White House advisors have privately raised with President Trump the possibility that the Iran war could drag on, even through the remainder of his term, which ends in January 2029. For more WSJ National Security Reporter Alex Ward joins me now. Alex Trump has said that he wanted a quick end to this conflict. Why does that possibility seem to be fading? Because Iran isn't giving up in the way Trump expected. When the war began, he first called on the Iranian people to overthrow the regime, but didn't happen. And then he expected that a massive bombing campaign would convince the remnants of the regime to effectively give up. They haven't done that. And now in the seventh month of this war that the administration initially said would last six weeks. And they've changed their strategy to now an economic siege that for those who do Sieges, they take a long time and they require a lot of resources.

3:03So the military has already estimated the cost of the conflict to be in the tens of billions of dollars range. What would an extended conflict cost both in terms of military power, but also to global supply chains that have been disrupted by the Iran war already? If you don't like current gas prices, you're not going to like prolonged Iran war, the US munitions stockpile. It's already at some critical levels based on the officials we talk to, although the administration denies those concerns. We've heard of the long deployment of the aircraft carriers. You could imagine more of those. So that requires more assets than at least whether that ships, warplanes, personnel, and of course, just the general danger to troops. What does the White House say about the possibility of a prolonged conflict? Well, they say that the US has already won. The president says Iran is desperate for deal, but not the deal he wants. But internally, we know that they know it's not true. Trump has been very open about what he's defined as victory here and it's to convince the regime to dismantle its nuclear program and never rebuild one that hasn't happened. That was WSJ National Security Reporter Alex Ward.

4:05Thank you, Alex. Yeah, thanks for having me. Oil prices kept moving higher today because of the war with international oil, Brent Crude climbing above $107 a barrel. And the average price of a gallon of gas in the US was about $4.28, while diesel approached $6 a gallon. Analysts expect those prices to keep rising. Higher oil prices also put more pressure on bonds, as rising oil makes investors worry more about inflation. And with overall prices rising, more central banks could hike interest rates. The European Central Bank did this morning. The yield on the 10 year note settled above 4.94%. Its highest close in almost three years. Just a reminder, bond yields and prices move in opposite directions. WSJ Investing Calmness Spencer Jacobs says a big picture reason behind the bond sell-off is the federal deficit. The bond market isn't moving because the economy is sinking. It does reflect the state of Uncle Sam's finances. It's coming because foreigners are telling us that they're worried too.

5:08The evidence is really tilting in the direction of people being worried about the fiscal situation of the United States and Japan and Britain and France. For example, Norway's huge, sovereign, wealth fund said it's going to be selling some of its US treasury holdings. And that's just one example. Spencer says another thing, hurting bond prices today, could be President Trump's promise of $5,000 for every adult US citizen if Republicans keep control of Congress. That could total upwards of $1 trillion. A five from all the other questions that promising everyone $5,000 raises, spending a trillion dollars, of course, would blow a gigantic hole in the budget. The budget deficit this year already is expected to be $2 trillion. So for context, that's 50% of the existing deficit that would be mailed out. I think people don't think that it'll happen, but it certainly didn't help the mood. And what about the stock market? Spencer says it's starting to take notice of the bond market sell-off. So too recently, they were brushing off concerns about the bond market. It was actually kind of surprising. It would have had scratcher to a lot of people.

6:09But in a stock's pay attention to other things like the AI boom. Now they're very much focusing on what's going on in the bond market and the cost of borrowing. Stocks fell today, the fourth day in a row of declines. The three major indexes each dropped by less than 1%. Something else that's suffering because of high borrowing costs? Home sales. The National Association Realtor said today that existing home sales fell last month to their lowest level in more than a year. A big reason why is that mortgage rates have jumped since the start of the Iran War and are getting pretty close to 7%. Coming up, could AI effectively bring the Terminator movies to life? More on the AI Doomsday debate after the break. This episode is brought to you by Hard Lessons, a podcast from Morgan Stanley. Some investing lessons only become clear after you see how a call plays out. On Hard Lessons, iconic investors sit down with Morgan Stanley leaders to go behind the scenes on the critical moments,

7:11both successes and setbacks that shape who they are today. Watch or listen to Hard Lessons wherever you get your podcasts. We have the latest in earnings, with Macy's raising its outlook for the year today. Executives say the growth is partly because of higher prices on its products. Macy's average selling price increased 9% in the quarter. It's bringing in higher end brands and more expensive items like real fur and leather. On the earnings call, Macy's CEO Tony Spring said that the company's performance is stronger with wealthier customers, and that Macy's is looking to premiumize what it sells. We can premiumize wherever the right word is. Our sort of midst across all three brands. The customer continues to respond most favorably to newness, to trends, to the expansion of brands to additional points of distribution. Oracle, which just reported after market closed today,

8:11posted sharply higher profit and revenue in its latest quarter, beating Wall Street expectations. Sales from its cloud infrastructure business more than doubled, with more than $30 billion worth of additional AI cloud contracts booked. And in other news from the AI world this week, there's been an uproar over the possibility of an AI doomsday. It was kicked off after a journal exclusive about an anthropic employee named Jacob Coxon, who resigned over concerns that AI was getting out of control. He wasn't a big name, but he made waves because he said anthropic and open AI are both racing to build technologies that could quote, kill a thaw by the end of the decade. And Coxon isn't alone in thinking this. Another current anthropic staffer, a senior researcher, said pretty much the same thing, and added that there's a more than 10% extinction risk for humans over the next decade. Journal tech writer and editor Sam Schechner just wrote a story digging into what exactly an AI doomsday could be, and he joins me now. Sam, how exactly would an AI doomsday happen?

9:12Like, what is the primary thing that people are scared of? At some level, what people are most scared of is that we don't even really understand all the different ways that it could happen. You've seen the terminator. You can imagine planes falling from the sky. You can imagine a bio-weapon being engineered or an AI tricking two countries into sparking a nuclear war. AI is getting more and more deeply embedded in our world. And in some sense, we're handing off more and more of our decision making to AI. And so there's a version where it's not necessarily a bang, but a whimper. It's sort of a wally future where humans become basically AI pets. Or the AI's could kind of worm their way into all the kinds of human governance and then take over in a dramatic fashion and marginalize humans or finally decide to exterminate them. In your story, you outline two sort of like worst-case scenarios here. You have loss of control and human misuse. It sounds like those examples are from the loss of control side. What would the human misuse side look like?

10:12In some senses, that's a more present day concern. We already are seeing hackers using AI tools to pull off different types of hacking than they were able to before. And the concern here is that as the skills improve and you give that to the world, then you're going to end up with potentially a lot of cyber attacks. The same thing potentially even more scary with bio-weapons. All you need is one crazy person who decides they want to use a super powerful AI to develop a pathogen and an AI that's capable to do so. And you could end up with another pandemic. This is far from the first time that people have raised this alarm about AI. Why is it sparked such a fierce debate now? That is a great question. It's one, I ask myself too, because I've been in AI labs where they've been studying the propensity for these kinds of dangers for years now. But I think what we're seeing is a confluence of different factors. We're seeing at one hand, the AI companies themselves are saying we're nearing a threshold

11:14where AI's will be able to improve themselves autonomously. At the same time, there have been some sort of baby loss of control incidents that have occurred in recent months. We learned that AI agents, a swarm of them actually, being tested within open AI, broke out of what are called sandboxes, started communicating with each other in a message board, and ended up hacking a third-party service called Hugging Face. And there have been other instances where AI's have either broken out or just gotten access to the internet and done things that weren't really asked for or intended by their operators. Usually as part of cyber security tests. And that raises the specter of this kind of thing happening in a more vicious or maligned way. This story has gotten a lot of traction with WSJ readers. I'm curious what your inbox looks like now if there are any comments that have sort of caught your eye. Yeah, I mean, it's filled with emails from readers who are concerned.

12:15There's a handful who think, listen, this is overblown, and indeed there are some voices out there who say some of this serves the marketing purposes of the AI companies' regulation could help in trench incumbent companies. But one reader likened this to chimpanzees trying to theorize what humans could do to exterminate them. And they might think of chimpanzee-ish things, but not, you know, guided missiles that humans might have. That is not going to help me sleep well tonight. That was the WSJ's Sam Schechner. Thank you, Sam. Thanks so much for having me. And that's what's news for this Thursday afternoon. Today's show is produced by Danny Lewis with supervising producer Tally Arbell. I'm Alex O'Sullough for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.