When people think of an AI doomsday, they usually envision a Skynet scenario in which Terminators try to exterminate humanity. While this would be among the worst outcomes, our assessment of the dangers of AI needs to consider both probability and the severity of harm. Skynet has low probability and high severity. In fact, we could reduce the probability to zero by the simple expedient of not arming robots. Unfortunately, killbots seem irresistible and profitable so the decision has been made to keep Skynet a non-zero possibility. But we should not be distracted from other doomsdays by the shiny allure of Terminators.

The most likely AI doomsday scenario is what could be called the AI burning bubble. Previous bubbles include the Dot-Com bubble that burst in 2000 and the housing bubble that burst in 2008. In 2022 there was a Bitcoin crash that led to serious concerns that “that virtual currency is becoming the largest Ponzi scheme in human history…” Fortunately, that cryptocurrency bubble was relatively small, although there are efforts underway to put it on track to become a bubble big enough to damage the world economy. Unless, of course, an AI bubble bursts first. While AI and crypto are different, they do have some similarities worth considering.

AI might produce a burning bubble, and the burning part refers to environmental damage. Both AI and crypto are incredibly energy intensive. It is estimated that crypto’s energy consumption is .4 to .9% of annual worldwide energy usage and that crypto mining alone produces about 65 megatons of carbon each year. This is likely to increase, at least until the inevitable bursting of the cryptocurrency bubble. It is believed that AI data centers consume 1%-2% of the world’s electricity production and this will almost certainly increase. While there have been some efforts to use renewable energy to power the data centers, their expansion has slowed the planned phaseout of fossil fuels. AI has also become infamous for its water consumption, stressing an already vulnerable system. As the plan is to keep expanding AI, we can expect ever increasing energy and water consumption along with carbon production. This will accelerate climate change, which will not be good for humanity. In addition to consuming energy and water, AI also needs hardware to run on. As with cryptocurrency, companies such as NVIDIA have profited from selling hardware for AI. But manufacturing this hardware has an environmental impact and as it wears out and becomes obsolete it will all become e-waste, most likely ending up in landfills. All of this is bad for humans and the environment.

It can be countered that AI will find a way to solve climate change and one might jokingly say that its recommendation will be to get rid of AI. While certain software has been very useful in addressing climate concerns, it is at best wishful thinking to believe that AI will solve the problem that it is contributing to. It would make more sense to dedicate the billions being pumped into AI to address climate change (and other problems) directly and immediately.

While AI, like crypto, is doing considerable environmental damage, it is also consuming investments. Billions have been poured into AI and there are plans to increase this to trillions. One effect is that financial resources are diverted away from other things, such as repairing America’s failing infrastructure, investing in education, or developing other areas of the economy. While this diverting of resources into a single area raises the usual moral concerns and sayings about eggs and baskets, there is also the economic worry that the bubble is being inflated.

As many have noted, what is happening with AI mirrors past bubbles, most obviously the Dot-Com bubble that burst in 2000. People will, of course, rightfully point out that although the bubble burst, the underlying technology endured, and the internet-based economy is obviously massively profitable. As such, the most likely scenario is that the overvaluation of AI will have a similar outcome. The AI bubble will burst, CEOs will move on to inflating the next bubble, and AI technology will remain, albeit with less hype. On the positive side, the burst might have the effect of reducing energy and water consumption and lowering carbon emissions. But this prediction could be wrong, and the Terminators might get us before the bubble bursts.