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The Generative AI Revolution: opportunities, shocks, and risks

The UK must develop “Great British GPT” to stay ahead in the AI race
Shabbir Merali
May 3, 2023
The Generative AI Revolution: opportunities, shocks, and risks

AI is the transformational technology of our generation. Its technological capabilities have the power to change our economy, society and politics. It holds economic and geostrategic opportunities for the UK that are enormous, but we have to realise them by managing the transition and the risks. The Government clearly recognises the importance of AI but it needs to do more and act faster, given the exponential pace of change. Investing in GB GPT and treating AI safety as a priority foreign policy objective are tangible actions the Government should take today.

Artificial Intelligence will be the transformational technology of our generation. 

In recent months the pace of change has accelerated, with the phenomenon of generative AI creating new applications that have exploded out of Silicon Valley and into the UK national consciousness. 

A song that used AI to clone the voices of Drake and The Weeknd secured 15 million TikTok views before being hurriedly pulled from platforms. OpenAI’s GPT-4, a Large Language Model (LLM), has performed better than 90% of American high schoolers across exams in nearly every subject. Training compute has grown by a factor of 10 billion since 2010. In the first 3 months of this year, $11 billion has been invested in reaching Artificial General Intelligence (AGI), more than the previous ten years combined. 

 

While AI has landed squarely in the public debate through ChatGPT, the implications for policy and politics have not yet been fully recognised.

AI presents an enormous economic and geostrategic opportunity. A recent Goldman Sachs report predicts that over the next ten years, the productivity benefits of generative AI alone will create $1.5 trillion of value. The scale of benefits in the UK will be driven by two trends. First, rapid adoption: ChatGPT garnered 100 million users in 2 months, compared to 30 months for Instagram, 55 for Spotify, and 70 for Uber. Second, boosting worker productivity. A recent MIT paper found using LLMs reduced the time taken for professional writing tasks by 40% while improving quality. 

International governments are already placing AI leadership at the centre of their geopolitical strategies. The UK’s Integrated Review in 2021 stated that “in the years ahead, the countries which establish a leading role in critical and emerging technologies will be at the forefront of global leadership”. But other countries are pulling ahead – the vast majority of recent generative AI advancements have been driven by a few Silicon Valley based AI labs with employees in the hundreds.

Generative AI will cause shocks to our labour market. Every wave of technological progress has generated fears, often unfounded, of rising unemployment. But this time the warnings should be heeded. For the first time technology looks set to automate cognitive functions and creativity, turning the traditional model of automating routine tasks on its head.

AI could cause superstar effects on steroids: Taylor Swift might profit from millions of personalised songs being created by AIs using her voice or a high flying corporate lawyer could scale her productivity with effectively unlimited interns at her fingertips. White collar jobs – like the paralegals or graphic designers who make up a disproportionate amount of the UK workforce, and in particular the London workforce – could be automated partly or wholly out of existence.

The UK may also face macroeconomic shocks. Just as China’s introduction to the global trading system in the 1990s brought downward pressure on inflation, generative AI will bring down cost curves and prices for services. There will also be implications for interest rates: downward pressure on prices may bring down short term interest rates, but much higher longer term interest rates may be needed if we move towards AGI. 

AI will create risks for our shared future. A recent letter signed by Elon Musk and Stuart Russell called for a six month pause in generative AI developments to address the issue of “alignment” – ensuring that AI systems act in accordance with human values and goals. In a recent survey of AI experts the median respondent estimated a 5% chance of AI posing an existential risk to humanity. 

Recommendations

These three areas – capitalising on the economic and geostrategic opportunity, managing the labour market and macroeconomic shocks, and navigating the risks around AI safety and alignment – should guide the UK policy debate. So what is to be done? 

  1. Capitalising on the economic and geostrategic opportunity of generative AI means making the UK the home of AI labs, researchers, and consumer-facing applications and encouraging adoption. Government should support the development of sovereign LLM capabilities – “GB GPT” – to ensure security of critical technology and support the diffusion of productivity benefits throughout the economy and public services. An AI fellowship programme should be launched to build expertise in the heart of government, alongside a bolstered incentive package to attract AI experts and entrepreneurs to the UK. And increased access to compute and a reformed IP regime can make the UK the best place to build and train models.
  2. Managing the labour market and macroeconomic shocks from AI will require early preparation for a potentially rapid transition. HM Treasury should prepare measures to shift the burden of tax from labour to capital in the medium term, and consider lessons from previous labour market disruptions such as globalisation in the 1990/2000s.
  3. Limiting AI safety risks requires the UK to take a bold leadership role internationally and pursuing multilateral solutions to AI safety should be one of the UK’s highest foreign policy goals. Solving AI alignment issues will become one of the most critical questions of our age and it is in humanity’s collective interest that we develop solutions. The Government should launch a UK Evaluations Framework, harnessing our academic and industry expertise to set standards the world will use. Regulators should monitor and better distribute compute access to support alignment research. And a single regulator should be created to ensure this work does not fall through the cracks – the Office for Foundational Models (OFFOM).

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