The Windfall Clause: Distributing the benefits of AI for the common good

Abstract

This report proposes a new policy mechanism to address the potential negative impacts of advanced artificial intelligence (AI) on society: the Windfall Clause. The Windfall Clause would pre-commit AI firms to share a portion of their profits for the common good in scenarios where these profits are unusually large, exceeding a substantial fraction of the world’s total economic output. The Windfall Clause would mitigate risks associated with AI-driven economic growth, such as increased inequality and job displacement, by ensuring the equitable distribution of the benefits. The authors argue that the Windfall Clause is legally permissible under US corporate law, given that the obligation to donate would be relatively low-cost in expectation, only vesting if a firm earns windfall profits, which is a low-probability event. They also contend that the Windfall Clause could generate goodwill for signatories, attract socially-conscious talent, and reduce political risk, making it compatible with firms’ interests. The report further enumerates desiderata for an effective and successful distribution mechanism for the windfall funds, proposing preliminary mechanisms for achieving these objectives. The authors conclude by highlighting the potential benefits of the Windfall Clause and invite further discussion on its implementation. – AI-generated abstract