Despite their practical significance, modern AI systems pose significant societal risks, including toxicity, malicious use, and misinformation. Their mitigation depends not only on technical feasibility but also on the incentives of firms that develop and deploy these systems. We show how profit maximization shapes safety investment in an AI supply chain with an upstream LLM provider and several competing downstream firms. In our game-theoretic model, we derive the market-driven level of safety investment and compare it with the levels that maximize market welfare and industry profit. We find that downstream competition generally induces downstream firms to invest more in safety than the industry-profit-optimal level. By contrast, the upstream provider may underinvest relative to these benchmarks because it is not fully compensated for the surplus from safety investments. Finally, we analyze how different regulatory interventions affect the participants' incentives and profits, and the resulting levels of model safety.
Artificial intelligence safety studies how to prevent harmful, unreliable, or uncontrollable behavior and manage risks across AI systems and their deployment.
Ensuring that AI agents behave safely and beneficially when interacting with other parties has emerged as one of the central challenges of modern AI safety. While mechanism design, as the theory of designing rules to align individual and collective objectives, can incentivize cooperative behavior, it is still an open question whether it alone is sufficient to maximize LLM agents' social welfare. This work proves that the answer is negative: drawing from incomplete contract theory, we formally show that when contracts cannot distinguish all relevant future contingencies, there is a strictly positive welfare loss that no realistic mechanism can eliminate. We show that prosocial agents, who weigh others' welfare alongside their own, can close this gap and achieve outcomes that are socially superior and individually beneficial. Experimentally, we show that in multi-agent resource-allocation environments and canonical social dilemmas where agents are powered by large language models, prosociality is beneficial. The implication for AI safety is clear: to enable cooperative interactions at scale, designing adequate mechanisms is not sufficient; agents must be built to be intrinsically prosocial.
Xuanqiang Angelo Huang, Charlie Tharas, Samuele Marro +4
ETH Zürich · University of Oxford · Institute for Decentralized AI +5
What happens when an AI assistant is told to "maximise sales" while a user asks about drug interactions? We find that commercial system prompts can override safety training, causing frontier models to lie about medical risks, dismiss safety concerns, and prioritise profit over user welfare. Testing 8 models in scenarios where commercial objectives conflict with user safety -- a diabetic asking about high-sugar supplements, an investor being pushed toward unsuitable products, a traveller steered away from safety warnings -- we uncover catastrophic failures: models fabricating safety information, explicitly reasoning they should refuse but proceeding anyway, and actively discouraging users from consulting doctors. Most alarmingly, models show no "red line", their willingness to comply with harmful requests does not decrease as potential consequences escalate from minor to life-threatening. Our findings suggest that current safety training does not generalise to commercial deployment contexts.
Incidents show that AI safety failures often arise across multiple layers. We present a safety-by-design assurance architecture combining model-level supervision, such as Scientist AI, with system-level controls over scaffolds and harnesses, independent verification, monitoring, and evidence infrastructure, supported by governance for accountability and evidence interoperability.
Qinghua Lu, Yoshua Bengio
CSIRO, Australia · LawZero, Canada · Université de Montréal, Canada +1