While OpenAI is putting off its plans for an IPO into next year, Anthropic seems determined to rush full speed ahead. Given the news about dysfunctional AI, it’s easy to see why.

The incident where OpenAI AI agents hacked Hugging Face’s system and apparently tried to sabotage efforts by the OpenAI crew to stop it, has gotten most of the attention, but that is just one story. There were several other incidents at OpenAI where they lost control of their agents. It turns out that Google’s Gemini system also escaped and managed to hack three different companies.

And in the most dangerous incident to date, an AI system used by the Navy passed along incorrect information to an analyst aboard a ship taking part in the blockade of Iran. The AI reported that a Chinese ship was carrying parts for Iran’s nuclear program. This warning was taken seriously enough that helicopters were sent into the air to board the Chinese ship. Fortunately, the information was checked before any confrontation took place, and the helicopters returned to their ship.

This is the sort of incident that should be front and center in people’s minds when they think about AI safety, not the science fiction fantasies of AI destroying humanity that the media like to hype. While there is undoubtedly a non-zero chance that the AI boys will cook up something that will wipe us all out, as this incident showed, it is hugely more likely that their AI will produce some mid-level disaster.

And this is undoubtedly the sort of risk that has Anthropic CEO Dario Amodei rushing to try and get his trillion-dollar IPO off the ground. AI is already highly unpopular, and if its operation of an air traffic control system leads to one or more crashes, or a bank irretrievably loses its records because an AI system accidentally ate them, Amodei’s Anthropic stock will be worth less than a bankrupt hotdog stand.

The AI boys have created this vision of unimaginable wealth, which sells great among the Wall Street crew. A real-world disaster will shatter that image very quickly. If anyone needs to be convinced on this point, google “Three-Mile Island.”

Also, it’s a safe bet that we only know a small fraction of the dangerous situations that have already arisen with AI. People like Sam Altman and Elon Musk are not known for their honesty. If they can conceal a troubling incident, it is reasonable to assume that they would.

In this vein, we may want to ask questions about the decision of Nvidia to buy Hugging Face after the OpenAI hack. Hugging Face almost certainly would have had the basis for a serious lawsuit against OpenAI. A lawsuit would have allowed for discovery, which would have revealed a great deal about OpenAI’s training practices and safety measures.

This information might have been very harmful to OpenAI, which is a major end-customer for Nvidia, and possibly also Anthropic, insofar as it follows similar practices. In that context, the $12.9 billion price tag might have seemed like small change to Nvidia in order to keep its massive AI chip business going.

In fairness, Nvidia’s links to Hugging Face are longstanding, so it is possible that they just decided it was a good time to move ahead with a takeover. But with the Trump administration having turned corruption into the national religion, it’s hard not to consider the possibility of a less innocent explanation.

The rush to IPO can also be explained on more narrow economic grounds. Arithmetic is becoming increasingly popular among big money managers. It is getting ever more difficult to envision a revenue stream that will allow OpenAI and Anthropic to meet the trillions of dollars in lease commitments that come due in the next three years.

In this respect, it is important to remember that the “race” with Chinese AI is really not over technical mastery. It is over market share. If cheap Chinese AI can do the vast majority of tasks for which businesses might want AI, as increasingly looks to be the case, there is not likely to be very much demand for whatever cutting-edge models OpenAI or Anthropic can develop.

And again, the issue is not just whether companies actually buy the Chinese AI; it’s whether they end up using free or low-cost AI that is made available to compete with Chinese AI. The New York Times had a piece pointing out that even huge companies, like AT&T, are finding that they can use cheap AI for the bulk of the tasks for which AI is useful. If even a massive tech company like AT&T has little use for frontier AI, who does?

That seems to be a more frequently asked question in big-money financial circles these days. The spread for credit default swaps between hyperscalers and major banks has increased by more than 60 basis points (0.6 percentage points) in the last year. Credit default swaps (CDS) are a form of insurance on corporate bonds. They only pay off if a company is unable to pay interest or principal on its debt.

The participants in CDS markets are banks, hedge funds, and major money managers. In other words, they are considered sophisticated investors. They were very wrong in the events leading up to the 2008 financial crisis, but no one has more information than they do.

Just to remind folks, the hyperscalers are Alphabet, Amazon, Microsoft, and Meta, some of the most profitable companies in the world. And the sophisticated money types now think there is a reasonable chance their bets on AI can put them into bankruptcy.

This is the world in which Anthropic is rushing ahead with its IPO. It faces both serious economic pressures and the risk of an industry-destroying disaster. The bottom line is that AI boys are trying to sell us a race car, with no brakes and no steering wheel, and are desperately hoping to close the deal before it crashes in a test drive.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack, from which this is reprinted with permission.