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How FTX's collapse impacts AI
webdeeplearning.ai·deeplearning.ai/the-batch/how-ftxs-collapse-impacts-ai/
A 2022 news piece from DeepLearning.AI's The Batch covering the real-world funding consequences for AI safety organizations following the FTX/Sam Bankman-Fried fraud collapse, relevant to discussions of funding ecosystem fragility.
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Importance: 42/100blog postnews
Summary
The collapse of cryptocurrency exchange FTX in 2022 threatened over $530 million in funding to 70+ AI-related organizations, many focused on AI safety. Key recipients like Anthropic ($500M) and the Alignment Research Center faced potential clawback of funds in bankruptcy proceedings. The episode highlighted the fragility of AI safety funding and the risks of relying on unvetted donors.
Key Points
- •FTX had given or promised over $530 million to 70+ AI-related organizations, much of it focused on AI safety research.
- •Anthropic received $500M from FTX; Future Fund earmarked $30M for AI safety including $6M for LLM safety issues like misinformation.
- •Bankruptcy proceedings may require recipient organizations to return funds, threatening ongoing safety research projects.
- •The collapse exposed the vulnerability of AI safety organizations that depend on a small number of large, potentially unvetted donors.
- •The incident underscores the need for AI safety funders to be rigorously vetted and for the field to diversify its funding base.
Cited by 2 pages
| Page | Type | Quality |
|---|---|---|
| FTX Future Fund | Organization | 60.0 |
| FTX | Organization | 74.0 |
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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](https://www.nytimes.com/2022/12/01/technology/sam-bankman-fried-crypto-artificial-intelligence.html?utm_campaign=The%20Batch&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8XjBEEP00yIrrRqQpjZpRbLTTu43MsTgd_x1CY9LpJfucuxVrmZG6TTxKTB8uHvO-BrYjm). 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](https://www.anthropic.com/?utm_campaign=The%20Batch&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8XjBEEP00yIrrRqQpjZpRbLTTu43MsTgd_x1CY9LpJfucuxVrmZG6TTxKTB8uHvO-BrYjm), an independent research lab that aims to build helpful and harmless language models, received $500 million.
- FTX executives launched [Future Fund](https://ftxfuturefund.org/?utm_campaign=The%20Batch&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8XjBEEP00yIrrRqQpjZpRbLTTu43MsTgd_x1CY9LpJfucuxVrmZG6TTxKTB8uHvO-BrYjm) 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](https://alignment.org/?utm_campaign=The%20Batch&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8XjBEEP00yIrrRqQpjZpRbLTTu43MsTgd_x1CY9LpJfucuxVrmZG6TTxKTB8uHvO-BrYjm), 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](https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/?utm_campaign=The%20Batch&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-8XjBEEP00yIrrRqQpjZpRbLTTu43MsTgd_x1CY9LpJfucuxVrmZG6TTxKTB8uHvO-BrYjm) 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](https://www.bloomberg.com/news/articles/2022-11
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