AI is getting closer to being able to make better investment decisions than humans, says hedge-fund executive

AI could wipe out humanity, says Bridgewater executive who catalogs how it's helping firm make investment decisions.

It's not only researchers at artificial-intelligence labs who are warning, some say self-servingly, that the tools could lead to human extinction.

Greg Jensen, the co-chief investment officer at hedge-fund giant Bridgewater Associates, agreed that AI could wipe out humanity.

"If you believe we can create an intelligence that's smarter than us, that'll pursue its own goals, the rest follows logically," he told the Bloomberg Odd Lots podcast that was published Friday.

Jensen compared the current situation to Feb. 2020, when China had reported the spread of coronavirus and Italy was beginning to feel its effects.

"Until the AI starts killing people, unfortunately, history would suggest we're not going to do anything," he said.

One reason nothing is happening is an inertia from government officials who do not know want to do. "The longer you wait, the more hopeless it gets," said Jensen.

Jensen said assigning liability to the AI labs would force the companies into action. "If you actually said you're responsible for the crimes your AI creates, you would slow things down," he said. As for the argument that China would push ahead regardless, he said the Chinese Communist Party has its own interest in maintaining stability.

Jensen proposes a machine-labor token tax to offset white-collar job disruption and fund safety oversight.

The $150 billion fund manager is using AI aggressively, with token usage up 200 times, he said. Bridgewater's spending has been profitable, according to Jensen, relying both on AI to help its human managers as well as AI-first model where the computers lead the investment decision making.

"I think we are a couple years from it being significantly better than the group of all humans at Bridgewater, we'll see, that's a bit of a forecast but that's how fast it's coming," he said.

Bridgewater's most recent 13-F filing to the Securities and Exchange Commission showed big positions in AI companies including Nvidia (NVDA), Broadcom (AVGO)and Amazon.com (AMZN).

-Steve Goldstein