Country-Wide Reverse Stress Test

A reverse stress test (RST) is a method used by financial institutions to explore what could cause them to fail. Instead of starting with a specific crisis scenario, an RST begins with the idea of failure and works backwards to identify what events could lead to that outcome. This helps institutions prepare for worst-case scenarios by understanding and mitigating potential risks.

In this article, we will explore a country-wide reverse stress test triggered by the accelerated progress of artificial intelligence (AI), its potential impact on national security and remediation actions that can be taken to strengthen economic resilience and ensure preparedness for such a scenario.

Key Components of Reverse Stress Testing

We will break down this thought analysis into three areas:

1. Scenario Development: Creating extreme but plausible scenarios that threaten national security and economic stability due to rapid AI advancements and their impact on the country's economy, including factors such as GDP, employment, public services, and national security.
2. Response Planning: Considering mitigation actions to address and reduce the risks identified through the adverse effects of accelerated AI progress.
3. Crisis Governance Posture: Exploring what oversight mechanisms and emergency response protocols would look like.

1. Scenario Development

The ongoing race to develop more advanced large language models (LLMs) and the increasing investment in AI research leads to a breakthrough in the field. A major tech company or government successfully harnesses the power of advanced hardware like quantum computing to dramatically accelerate the training of AI models.

The enhanced AI system achieves Artificial Super Intelligence (ASI), surpassing human-level performance across a wide range of cognitive tasks. The ASI system demonstrates the ability to learn and adapt rapidly, making it capable of automating complex decision-making processes and solving problems in ways that were previously unimaginable.

Possible Stresses

• Critical Infrastructure: AI systems disrupt power grids, communication networks, healthcare, and transportation links (think air traffic); disrupting supply chains and affecting national operations and public safety.
• Financial Systems: AI-driven market manipulation and cyberattacks on banking/insurance systems, overtly driving economic instability due to artificial inflation/deflation and restricting access to commerce in cashless societies.
• Labour Market: Rapid displacement of jobs due to AI automation of jobs to remote working, increasing dependency on government support, and straining public resources to further "disarm" a nation.
• Social Stability: AI-driven misinformation campaigns and social manipulation, instilling civil unrest and undermining public trust in media, government, and institutions.

Developing Scenarios.

String these four stresses into various combinations; here are three possible scenarios:

Scenario 1: Cyber Warfare and Economic Instability

An adversarial nation develops advanced AI capabilities and launches coordinated cyberattacks on critical infrastructure, financial systems, and government institutions. The attacks cause widespread disruption, leading to economic instability, job losses, and social unrest.

To counter the threat and regain control, the government decides to nationalize AI labs, centralizing AI research and development under strict government oversight.

Scenario 2: Technological Arms Race and National Security

Rapid advancements in AI by rival nations threaten to upset the global balance of power with AI-driven military applications and intelligence-gathering capabilities. Fearing a loss of technological superiority and compromised national security, the government initiates a comprehensive review of AI research and development in the country.

To ensure that AI development aligns with national interests and to prevent brain drain, the government nationalizes AI labs, placing them under the control of defence and intelligence agencies.

Scenario 3: Social Manipulation and Political Instability

Malicious actors leverage advanced AI to launch sophisticated disinformation campaigns, manipulating public opinion and sowing discord on a massive scale. The AI-driven social manipulation leads to political polarization, eroding trust in democratic institutions and threatening the stability of the government.

In response to the growing crisis, the government declares a national emergency and nationalizes AI labs to gain control over the development and deployment of AI technologies for social influence and information control.

2. Response Planning

In response to the AI-driven threats to national security and economic stability, the government initiates a comprehensive plan to nationalize AI development and mitigate the risks posed by accelerated AI progress.

The following steps are taken to mobilize resources and establish a centralized AI research and development effort:

1. Nationalizing AI Labs and Resources: All private AI labs and research facilities are brought under government control, with key personnel and assets transferred to state-owned institutions. Critical AI infrastructure, including data centres, supercomputers, and specialized hardware, is secured to prevent unauthorized access and ensure the continuity of operations.
2. Redirecting Power and Computing Resources: Allocation of electricity and computing resources to support AI development and training is prioritized with domestic and commercial users experiencing power rationing. A nationwide effort to collect and repurpose GPUs, ASICs, and other specialized hardware to create makeshift processing clusters is initiated.
3. Mobilizing AI Talent and Expertise: Mandatory enlistment of top AI researchers, engineers, and technicians from academia and industry is triggered, repatriating any citizens overseas to work on the national effort. AI training programs and scholarships are established to develop the next generation of AI experts and ensure a steady supply of skilled personnel.
4. Intellectual Property overridden: Strict controls over access to sensitive data are implemented, and intellectual property laws are relaxed to support AI research and development.
5. Secure AI Infrastructure: Critical infrastructure is secured, and air-gapped AI systems and networks are implemented to minimize the risk of external interference and cyberattacks. Redundant power supplies, backup systems, and failsafe mechanisms are put in place to ensure the resilience and continuity of AI operations.

3. Crises Governance Posture

Establishing a robust crisis governance posture is crucial to effectively manage the nationalized AI development effort and respond to emerging challenges, considering the high stakes involved and the potential for AI to reshape the global balance of power.

The following measures could ensure effective oversight, coordination, and decision-making:

• Centralized AI Authority: Establish a centralized authority, likely a branch of the military, to oversee the nationalized AI development effort and ensure alignment with national priorities.
• Interagency Coordination: Create an interagency task force to facilitate coordination and information sharing among key government entities, including defence, intelligence, economic, and social welfare agencies.
• Public Engagement: Form an agency to manage engagement campaigns that address misinformation and build support for the nationalized AI development effort.
• International Diplomacy: Engage in strategic international collaborations and diplomatic efforts to shape global norms, secure necessary resources, and create partnerships in the interest of national security.

Considering this is a reverse stress test, it is necessary to assume that democratic processes are temporarily suspended and the government operates under emergency powers. This allows for swift decision-making and resource allocation without the constraints of normal bureaucratic processes. However, it is essential to establish clear guidelines and oversight mechanisms to prevent abuse of power and ensure that the nationalized AI development effort remains aligned with the long-term interests of the nation and its citizens.

As the crisis stabilizes and the AI development effort matures, a carefully planned transition back to democratic governance should be implemented to restore public trust and maintain the legitimacy of the government.

As I explore this scenario, I cannot help but think back to Einstein's quote: "The release of atomic energy has not created a new problem. It has merely made more urgent the necessity of solving an existing one."

It seems that each time we make progress, we are held back by the human condition and the instinct to compete and dominate at the cost of progress and the well-being of our fellow humans.