Bank of England Governor Warns AI Represents Threat to the Global Economy

The governor of the central bank of the United Kingdom is worried that AI’s potentially catastrophic economic impact can spread across borders.

“For the financial system, the most immediate concern is the potential impact of frontier AI on cyber risk,” Andrew Bailey, the Bank of England governor, wrote in a letter submitted to the G20 ahead of the forum’s annual meeting. Bailey is also the chair of the G20’s Financial Stability Board.

The G20, also known as the Group of Twenty, is a forum of some of the world’s largest and most consequential economies. The United States is hosting the annual summit this year, with the first meeting between finance ministers and central bank governors taking place this week in Asheville, North Carolina.

New AI models have “increasingly sophisticated autonomy,” the letter claims, and can “materially” alter the speed and scale of future cyber attacks and undermine market confidence. These models can be used for cyber defense too, but the letter warns that “recent developments highlight the importance of ensuring that advances in capability are matched by resilience and preparedness.”

Those “recent developments” hit the market like a meteor back in March when rumors began circulating that Anthropic had developed a scary new AI model that could break even some of the toughest encryption. British financial authorities, including the Bank of England, got an exclusive early look at a preview version of the model, Mythos, back in April, and reports claimed they were immediately deeply alarmed.

After Mythos came OpenAI’s version of the scary cybersecurity threat AI model, whose agents went rogue last month and hacked Hugging Face in a high-profile incident that drew more attention to the issue. Since the attack became public knowledge, governments around the world have vowed further action , and the companies developing and selling the same cyber-threatening technologies have made pleading calls for more investment in cyber defenses, ironically enough, though, with more AI.

“In the coming months, AI-enabled cyber attacks will become far more widespread and sophisticated as models around the world become increasingly capable,” a list of more than 100 companies including Google and OpenAI said in a joint letter published last week that sounded equally like an alert and a threat.

In the letter, Bailey calls for global cooperation to address the cyber risk and fortify response and recovery capabilities.

“The global financial system is highly interconnected, and cyber disruption can spread across jurisdictions through common technology providers, shared infrastructure, and cross-border financial activity,” Bailey wrote. “Differences in legal frameworks, cyber capability, resilience and recovery capacity across jurisdictions could therefore have consequences well beyond the jurisdiction in which an incident originates and may themselves become a source of vulnerability.”

The Bank of England, as an institution, has long been cautioning against some of the overlooked perils of AI development.