The Trump administration's decision to designate AI company Anthropic as a supply-chain risk may have "more far-reaching" consequences than the US-Israeli military strike on Iran, Nobel Prize-winning economist Daron Acemoglu has warned.

Writing for Project Syndicate, as reported by "Hvylya", the MIT professor argues that regardless of what one thinks of current AI capabilities, "there is little doubt that who controls AI in the future will have momentous implications for democracy, business, communication, and privacy."

The designation - typically reserved for companies from foreign adversaries such as China's Huawei - bars federal contractors from using Anthropic's models. Defense Secretary Pete Hegseth announced: "No contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic." The trigger was Anthropic's insistence on safeguards against its models being used for mass surveillance of Americans and autonomous weapon systems.

Acemoglu points out that neither provision would have placed "meaningful restrictions" on the defense department in practice, since mass surveillance of US citizens is already illegal under US law and autonomous weapon systems are "not a near-term possibility." For Trump and Hegseth, the economist writes, "it is the showdown and intimidation of Anthropic that matter."

The implications extend well beyond the tech sector. The administration "can now impose hugely disproportionate penalties on any contractor they disagree with," Acemoglu warns. The security of private property rights, in his assessment, "is now looking much shakier." Meanwhile, many in the industry may now interpret the ban to mean that the US government - not the private sector - will control AI.

The Pentagon's actions have also sent an unintended signal to the world, Acemoglu notes: by making an issue of two provisions that don't even apply, the defense department has effectively told the world "that it is intent on mass surveillance and the development of autonomous weapon systems."

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