Artificial Danger or Global Catastrophe: How A.I. Regulation is incapable of impact
As the American people grapple with the latest whistleblower, Jacob Coxen’s, information concerning the development of artificial intelligence (A.I.), there have been renewed calls for regulating the companies that are developing A.I. Both Bernie Sanders and Steve Bannon have called for oversight into the development of A.I, representing the need from both sides of the aisle, but calling for regulation and having the institutional capacity to deliver it are two different things. The American people have seen this before, an industry moving faster than oversight can follow, warnings ignored by the people positioned to act on them, and the consequences landing on everyone except the people who profited from it. It's not whether A.I. should be regulated. It's whether regulation, as it has ever been practiced in this country, is structurally capable of slowing something this fast, this profitable, and this consequential.
Coxen, who worked for both Anthropic and OpenAI, quit both organizations stating “The people building A.I. earnestly believe that it could kill us all by the end of the decade”. For those in A.I. research Coxen didn’t reveal anything that had not already been shared years ago by those leading the industry.
Geoffrey Hinton, who has been called the “Godfather of A.I,” resigned from Google in 2023 citing “I left so that I could talk about the dangers of A.I. without considering how this impacts Google.” Additionally, in an interview with NPR, Hinton stated, “These things could get more intelligent than us and could decide to take over, and we need to worry now about how we prevent that happening”.
In 2023, Elon Musk (XAI), Steve Wozniak (Apple), Grady Booch (IBM), and 1,100 others signed a petition calling for a pause in all large-scale A.I. research. Since 2023, there have been an additional 32,605 signatures added. The petition asked the question “Should we let machines flood our information channels with propaganda and untruth? Should we automate away all the jobs, including the fulfilling ones? Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete and replace us? Should we risk loss of control of our civilization? Such decisions must not be delegated to unelected tech leaders.” Months later another 350 signatories, including Sam Altman (OpenAI), Demis Hassabis (Google DeepMind CEO), Dario Amodei (Anthropic), Bill Gates (Microsoft), and Geoffrey Hinton (formerly Google), signed a one line statement that stated “Mitigating the risk of extinction from A.I. should be a global priority alongside other societal-scale risks such as pandemics and nuclear war”.
The American people have been told for over 3 years that A.I. has a probability to destroy humanity and there has yet to be any legislation written, voted on, or debated concerning A.I. The range of the probability is vast, with the lowest being around 5% chance and the highest being a 99% chance of humanity’s destruction by A.I. The world as a whole should be asking, what risk are we willing to take on when the result is complete annihilation and are our current CEO’s and elected officials the ones that should be making these decisions for humanity. The same CEO’s that signed those letters and statements in 2023 are now, saying “The world should trust that we are going to do the right thing because it’s the right thing and we feel the magnitude of this, (Sam Altman).
Running parallel to A.I.’s threat to humanity is unprecedented investment into A.I. from Wall Street. With 80% of all venture capital investment in the first quarter of 2026 going into A.I. investments. With the bulk of that funding going to just four companies in the industry. OpenAI received $122 Billion, Anthropic received $30 Billion, XAI received $20 Billion, and Waymo received $16 Billion, for a combined total of $188 Billion Dollars. The level of investment in just these four companies in the first quarter of 2026 is on par with the gross domestic product (GDP) of Uzbekistan, Kuwait, Slovakia. The investment extrapolated out for an entire year is on par with the GDP of Ireland, Belgium, and Sweden.
That level of investment without regulation or oversight is not neutral to the larger economy. It presents risk in two large sectors in the American Economy, Technology and Financial. Risk creates pressure and pressure has preceded every major regulatory failure in American financial history. Almost every disaster of the American Economy has occurred when the pressure to move faster and prioritize growth over our ability to develop oversight framework has been met with peril.
Following the Great Depression, Glass-Steagall attempted to regulate the financial industry from causing the level of destruction that the United States saw from 1929 to 1939. From the start of the Great Depression to the passing of Glass-Steagall unemployment went from 0% to 25% in just 4 years. The unemployment rate would remain in double digits until 1941. The laws and regulations passed in 1932 attempted to separate commercial banking from investment banking, so that some risk could continue while also protecting the base financial industry sector. In 1999 the Gramm-Leach-Bliley Act was passed which completely repealed the regulations Glass-Steagall had to protect the American Economy. Followed shortly by The Commodity Futures Modernization Act (CFMA), which completely deregulated over-the-counter (OTC) derivatives. CFMA took some of the most risky aspects of the financial sector and deregulated them. One of these financial deregulations was credit default swaps, which in just eight years would create the greatest crisis in American History since the Great Depression.
In 1998, Brooksley Born was head of the Commodity Futures Trading Commission (CFTC). The CFTC was responsible for overseeing lesser-known corners of the financial markets. Born was specifically looking into OTC derivatives. These derivatives were newer and weren’t traded on an exchange, some traders called this “dark markets” When Born began discussing OTC derivatives, there were millions of such private contracts that involved many of Wall Street's top banks. In April’s meeting of President Bill Clinton’s Financial Markets Working Group, Born asked other regulatory leaders if the government was doing enough to monitor trading in OTC derivatives. Her question was not well received. Treasury Secretary Robert Rubin said regulation would create “uncertainty over trillions of dollars of transactions”. Then deputy Treasury secretary, Larry Summers asked if there was a “better way to proceed” that would be less “disastrous for markets” Alan Greenspan, then Chairman of the Federal Reserve said, once regulators began tinkering with the rules they wouldn’t be able to put the cork back in the bottle. Born, in the meeting, asked if the Treasury Secretary was asking her not to uphold the law.
Brooksley Born resigned in 1999, after Congress passed laws prohibiting her agency from regulating derivatives. Born was labeled “irascible, difficult, stubborn, and unreasonable” according to former SEC Chairman Arthur Levitt. Levitt explained that “Alan Greenspan and Robert Rubin convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil”. Frontline producer, Michael Kirk, outlines in “The Warning”, a documentary about the 2008 financial crisis, “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming.”
When Sam Altman says, “the world should trust that we are going to do the right thing” he is saying the same thing the financial industry said in 1998. The market is too complex, too interconnected, too fast-moving for any single regulator to grasp. Greenspan had testified explicitly that derivatives didn’t need oversight because “derivative transactions are transactions amongst professionals, and the institutions which are involved have very considerable what we call counterparty surveillance”. The Financial Crisis Inquiry Commission concluded when looking at the 2008 financial crisis that it was fully avoidable. Stating that “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public”.
Regulation does not fail because regulators are incompetent. It fails because the people being regulated have more money, more lawyers, more lobbyists, and more time than the people writing the regulations. Brooksley Born was not incompetent. She was overruled by people who were paid more than her to reach a different conclusion. The same dynamic is already operating in A.I., the companies developing the technology are funding the research institutions studying its risks, hiring the policymakers who might regulate them, and drafting the voluntary frameworks that substitute for any binding rules. When an industry regulates itself, the industry wins. The American people don’t need to understand the technical details of A.I. or large language models to understand the lesson they learned in 2008. The question is whether they remember it now.
Sources:
https://www.bbc.com/news/articles/cqx2zpj4y525o
https://www.cnn.com/2023/05/01/tech/geoffrey-hinton-leaves-google-ai-fears/index.html
https://radaronline.com/p/ai-kill-us-all-whistleblower-warns-level-danger/
https://futureoflife.org/open-letter/pause-giant-ai-experiments/
https://angelinvestorsnetwork.com/startups/q1-2026-ai-funding-80-of-vc-capital-went-to-4-companies
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https://www.npr.org/2023/05/28/1178673070/the-godfather-of-ai-sounds-alarm-about-potential-dangers-of-ai
https://aistatement.com/work/statement-on-ai-extinction-risk
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