Cryptocurrency Unsafe for AI How FTX's collapse impacts AI.

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FTX logo drowning in a sea full of dollars

The demise of cryptocurrency exchange FTX threatens funding for some teams devoted to AI safety.

What’s new: FTX, the $32 billion exchange that plunged into bankruptcy last month amid allegations of fraud, had given or promised more than $530 million to over 70 AI-related organizations, The New York Times reported. Much of that money may have to be returned.

What happened: FTX founder Sam Bankman-Fried and his associates used the exchange’s holdings to dole out grants or investments to AI-related startups, labs, and think tanks, many of them focused on AI safety. People associated with these groups anonymously expressed concerns that their funding would be clawed back in bankruptcy proceedings.

  • Anthropic, an independent research lab that aims to build helpful and harmless language models, received $500 million.
  • FTX executives launched Future Fund to support projects meant to benefit humanity's future including $30 million earmarked for AI safety. The fund devoted $6 million to projects intended to mitigate safety issues associated with large language models, such as production of misinformation.
  • Future Fund gave $1.5 million to Cornell University and $1.25 million to the Alignment Research Center, an AI safety nonprofit, for research intended to ensure that AI doesn’t militate against humanity’s best interests.

Behind the news: Bankman-Fried co-founded FTX in 2019 to enable users to trade cryptocurrency for conventional money and other assets. A November report by CoinDesk, a cryptocurrency news outlet, described a potential conflict of interest between FTX and another trading firm also owned by Bankman-Fried. The news prompted users to withdraw their funds, much of which FTX had already spent, invested, given away, or promised to others. The exchange filed for bankruptcy. U.S. prosecutors and regulators are investigating potential wrongdoing.

Why it matters: It’s crucial to minimize potential harm caused by AI, but organizations devoted to that goal may not receive the funding they need from corporate entities or cash-strapped academic institutions. Organizations that were counting on FTX may find support elsewhere, but many now face an uncertain future.

We’re thinking: We’re grateful for donors who are willing to support AI research of all kinds. At the same time, we’re appalled by the scope and brazenness of FTX’s deceit. Sadly, organizations that seek funding must vet potential donors carefully.


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