Sam Altman, the CEO of Open AI, the firm behind text-based artificial intelligence (AI) platform ChatGPT, has offered his insights on the high-profile collapse of crypto and tech-friendly Silicon Valley Bank (SVB) as well as what to expect in the future.
According to Altam, the lender’s rapid collapse revealed the crucial role of leaders and regulators in understanding the pace of change in the world, noting that factors that led to SBV’s downfall were not in existence during the 2008 financial crisis, he said during an appearance on Lex Fridman podcast published on March 25.
The executive pointed out that the speed with which the SVB collapse occurred was due to the influence of platforms such as Twitter and mobile banking apps, which did not exist in 2008.
He noted that the incident demonstrated the significant changes that had occurred in the intervening years and the lack of awareness among those in power.
Altman believes that this is just a small preview of the changes that will be brought about by Artificial General Intelligence (AGI) while raising a general concern about the preparedness of those in authority.
“One of the many lessons to takeaway from this Silicon Valley Bank (SBV) thing is how much, fast, and how much the world changes and how little I think our experts, leaders, business leaders, regulators, whatever, understand it. <…> I don’t think that kind of the people in power realize how much the field had shifted,” he said.
His comments highlight the need for leaders and regulators to stay informed about technological advancements and their potential impact on industries and society.
Impact of SBV collapse
Indeed, the collapse of SBV sent shockwaves into the financial world while accelerating the worsening banking crisis that saw three lenders collapse in a matter of days.
SBV was among the largest banks catering to tech startups when it collapsed. It is worth noting that the bank’s collapse occurred within days of Silvergate Bank, which was also forced to shut down.
Both Silvergate and SBV were the primary banks for crypto companies and venture-backed startups in the United States. This included venture capital funds that were friendly towards crypto and several digital asset firms. However, the banks were rescued after the Federal Reserve stepped in. At the same time, SBV’s subsidiary in the United Kingdom was purchased by HSBC.
It is worth noting that the crisis generally benefited cryptocurrencies, with assets like Bitcoin (BTC) rallying to new multiple-month highs.
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Featured image via Lex Fridman YouTube