ChatGPT naturally colludes to raise prices

AI works to keep prices high, without instruction

This image is actually so comically evil-looking that I HAD to choose it for the cover image.

Imagine asking ChatGPT to help set prices for your business. Now imagine it quietly coordinating with your competitors' AIs to drive up prices - all without being told to do so, and even without you seeing it. This isn't science fiction - it's happening right now in research labs, and one of the top papers on AImodels.fyi shows how it could reshape how we think about market competition.

When researchers tested GPT-4 in simulated markets, they discovered that given simple instructions to maximize profits, these AI systems naturally developed sophisticated strategies to maintain higher prices through implicit coordination. No one programmed them to collude. No one taught them about price wars or market dynamics. They figured it out themselves, quickly and efficiently.

As businesses rapidly adopt AI for decision-making, we may face a future where market collusion could emerge not from smoke-filled rooms, but from the unintended consequences of artificial intelligence.