Warren Buffett: Artificial Intelligence Fraud Could Grow Into an Industry

Artificial intelligence technology has the ability to reproduce misleading content.

AP PHOTO/REBECCA S. GRATZ

Squishmallows store sells toys that mimic Warren Buffett's appearance, at the exhibition space at the annual meeting of Berkshire Hathaway on Saturday, May 6, 2023, in Omaha, Nebraska.

JAKARTA, KOMPAS  —  At the annual shareholder meeting of Berkshire Hathaway, last weekend, in Omaha, Nebraska, United States, Chairman and CEO of Berkshire Hathaway Warren Buffet issued a strong warning about the potential dangers of Berkshire Hathaway a href="URL_PLACEHOLDER">artificial intelligence. Fraud using artificial intelligence technology is a negative risk in the presence of this technology and it is feared that it could form an industry.

"When you think about the potential for fraud against others, if I were interested in getting you to invest in fraud, it would be a never-ending industry and possible, in a certain way, by artificial intelligence," said Buffett as quoted by CNBC.

Also read: The Government Will Issue Presidential Regulations and Ministerial Regulations on Artificial Intelligence

Buffett pointed to the ability of artificial intelligence technology to reproduce realistic and misleading content as part of an effort to send money to criminals. Fraudsters are known to be able to use voice cloning using artificial intelligence technology and deep-fake technology to manipulate videos and images impersonating someone's family and friends to ask for money or personal information.

"Of course, artificial intelligence also has the potential for good things. However, I think, as someone who doesn't understand anything about artificial intelligence, AI has a great potential for both good and great potential for harm and I have not adopted AI," said Buffet, who is also one of the founders of multinational corporation Berkshire Hathaway.

MIDJOURNEY/KOMPAS/HERU SRI KUMORO

The visual produced by Midjourney by inputting the command "beautiful girl wearing casual dress reading the KOMPAS newspaper on the beach under a coconut tree with the headline AI in the Visual World, realistic, beautiful scenery, 4K, mini table with coffee and bread, breakfast, sharp -ar 4:3".

Artificial intelligence has been a topic of discussion on Wall Street for over a year now. Investors are betting on the potential of this technology to achieve higher profits in the future. Technology companies that have artificial intelligence products, such as Nvidia and Meta, saw their stocks skyrocket during the artificial intelligence boom. They each rose 507 percent and 275 percent since the end of 2022.

Buffet, known as a legend in investment, admits that he is not familiar with artificial intelligence. Nevertheless, he is concerned about the potential negative impact caused by artificial intelligence. He even compares its potential risks to the atomic bomb in the 20th century.

"This is like letting the genie out of the bottle when we developed nuclear weapons. The genie has done some bad things lately. The power of that genie is what is frightening. I don't know how to put the genie back in the bottle, and artificial intelligence is somewhat similar. Whether this will change the future of society, we will find out later," added Buffett.

Also read: AI and Anxiety about the Future of Work

Citing CNN, Greg Abel, the successor of Buffett who runs Berkshire's non-insurance operations, said on Saturday (5/4/2024) that Berkshire Hathaway has started using some forms of artificial intelligence in its own business to make employee work more efficient.

"Sometimes, this replaces the workforce, but hopefully there are other opportunities," said Abel, who did not disclose many details about the company's plan to use artificial intelligence.

Buffett is not the only major business figure to express concern about the potential for fraud arising from artificial intelligence technology.

AFP/SAUL LOEB

US President Joe Biden sat alongside Vice President Kamala Harris (second from left) and US Treasury Secretary Janet Yellen (second from right) during a meeting with business leaders, including Jamie Dimon (right), Chairman and CEO of JPMorgan Chase, regarding the Covid-19 relief bill in the Oval Room of the White House in Washington, DC, on February 9, 2021.

In a letter to shareholders last month, JPMorgan Chase CEO Jamie Dimon stated that while he is not yet aware of the full impact of artificial intelligence on business, the economy, or society, he knows that the influence of AI technology will be significant.

"We are fully confident that the consequences will be extraordinary and may be as transformational as some of the major technological discoveries in the last few centuries, such as the printing press, steam engine, electricity, computing, and internet," he said in the letter.

Dimon also realizes the risks that arise from the explosion of artificial intelligence, such as criminals using this technology to try to infiltrate company systems. They can steal money and intellectual property, or simply cause disruption and damage.

Also read: There are still many business people who are not aware of the potential dangers of "Deepfake"

In January 2024, JPMorgan Chase stated that it had seen a significant increase in daily hacker intrusion attempts into its system over the past year. This statement highlights the growing cybersecurity challenges faced not only by the bank but also by other Wall Street companies.

JPMorgan Chase, the world's largest bank by market capitalization, is also exploring the potential of generative artificial intelligence in its own ecosystem.

Meanwhile, 42 percent of CEOs surveyed at last summer's Yale CEO Summit said that artificial intelligence has the potential to destroy humanity within the next five to 10 years. The survey results were shared exclusively with CNN.

“It's quite dark and worrying,” Yale professor Jeffrey Sonnenfeld said of the findings.

The survey covers responses from 119 CEOs from various business sectors, including Walmart CEO Doug McMillion, Coca-Cola CEO James Quincy, leaders of AI technology companies such as Xerox and Zoom, as well as CEOs from the pharmaceutical, media, and manufacturing industries.

Continual socialization of digital literacy is needed to address the issue of digital fraud. Not all victims of digital fraud who use digital technology are elderly people who are labeled as less technologically literate.

Online fraud victims often have better background knowledge than the average fraud subject.

The results of a Google-Qualtrics survey on Online Scams conducted in December 2023 throughout Asia Pacific, including 1,247 Indonesian netizens aged 18 years and over, showed that the most vulnerable age group was 25–34 years old (72 percent) followed by 18–24 years (64 percent), 35–54 years (63 percent), and 55 years and over (66 percent). Criminals target younger demographics for identity theft and charity fraud. They use instant messaging applications and social media to deceive victims.

Clinical psychologist based in Singapore, Annabel Chou, stated in a virtual press conference titled "Ask The Expert: Scams" and "How Google is Fighting Bad Apps in 2023" at the end of April 2024, that psychological studies show that scam victims usually invest more cognitive efforts to analyze scam content than non-victims. Online scam victims are often better informed than the average scam subject.

"This means that people who are 'educated' and 'rational' with some knowledge about financial securities are more likely to become victims of financial securities fraud than those who have no knowledge at all," he said.

Also read: The Worrying “Deepfake”