SHANGHAI/SINGAPORE (Reuters) -China's central bank rolled over maturing medium-term policy loans and kept the interest rate unchanged as expected on Monday, however markets expect authorities will need to unleash more stimulus to support slowing economic growth.

The economic recovery has lost momentum after an initial burst in the first quarter, prompting monetary authorities to lower key policy rates last month.

However, some market watchers now expect policymakers to deliver fiscal stimulus, as any further interest rate cuts would widen the yield gap with the United States, putting the yuan under more pressure.

The People's Bank of China (PBOC) said it was keeping the rate on 103 billion yuan ($14.43 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.65%.

Monday's market operations would fully meet financial institutions' cash demands and keep "banking system liquidity reasonable ample," the central bank said in an online statement.

In a Reuters poll conducted last week, market participants predicted no change to the MLF rate.

Traders and analysts said the rate decision was well expected after the central bank lowered key policy rates last month.

On Friday, a senior central bank official said that the PBOC would use policy tools such as the reserve requirement ratio (RRR) and MLF to help the world's second-largest economy withstand challenges.

Economists now expect more stimulus could be announced after the Politburo meeting later this month, when a top decision-making body of the ruling Communist Party meets to discuss the economy.

"We expect the July Politburo meeting statement to continue emphasising 'countercyclical adjustment' of monetary policy and 'more proactive' fiscal policy," economists at Goldman Sachs (NYSE:GS) said in a note.

"Specifically we expect a 25 bp RRR cut in Q3 and a 10 bp policy interest rate cut in Q4 to facilitate credit growth. Policymakers will probably also resort to faster government bond issuance in Q3 to help with investment growth in our view."

With 100 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 3 billion yuan fresh fund injection into the banking system.

The central bank also injected 33 billion yuan through seven-day reverse repos and kept borrowing costs unchanged at 1.90%, it said in an online statement.

China is due to release due to release second quarter gross domestic product data at 0200 GMT.

($1 = 7.1403 Chinese yuan)

Investing.com -- Second-quarter earnings season kicks into gear, the U.S. and China release economic data and inflation figures out of the U.K. will likely determine the size of the Bank of England’s next rate hike. Meanwhile, oil prices look poised for another weekly gain.

1. Earnings time

Second-quarter earnings season gets underway in earnest in the coming week, with Tesla (NASDAQ:TSLA) the first of the massive growth and technology names that have dominated the U.S. stock market so far this year to report, with results expected on Wednesday.

Tesla is one of seven huge stocks, along with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA) and Meta Platforms  (NASDAQ:META) recently dubbed the “Magnificent Seven” by investors. Shares in the megacaps have soared between 40% and over 200% so far this year, accounting for almost all of the S&P 500’s rally.

There are indications the rally is broadening to other sectors, but the outsize gains have come with big earnings expectations so if Tesla or any other megacaps disappoint this quarter, the hit to equity indexes could be severe.

A slew of other big companies also post results in the coming week. Bank earnings continue, with Bank of America (NYSE:BAC) on Tuesday and Goldman Sachs (NYSE:GS) on Wednesday. Also on the docket are Johnson & Johnson (NYSE:JNJ), Netflix (NASDAQ:NFLX) and Philip Morris (NYSE:PM).

2. U.S. economic data

U.S. retail sales data for June on Tuesday is expected to show an increase of 0.5%, boosted by rebounding auto sales and higher gasoline station sales, indicating that consumer demand remains resilient.

Investors will also get an update on the health of the housing sector with reports on building permits, housing starts and existing home sales. High mortgage rates are still weighing on sales of existing homes, but construction is improving given stable pricing and a pick-up in new home sales due to the lack of properties on the market.

There will also be reports on regional manufacturing activity, which is expected to remain sluggish along with the weekly data on initial jobless claims.

3. China economic data

A flurry of economic data from China on Monday is expected to show its post-pandemic bounce is rapidly losing momentum, fueling expectations that Beijing will soon need to unveil more stimulus measures.

Gross domestic product is expected to have grown by an annualized 7.3% in the three months to June, compared with growth of 4.5% in the first quarter.

However, that reading will be heavily skewed by a sharp slump in activity in the spring, when large parts of the country were still locked down.

Mounting deflationary pressure and a slump in trade have added to concerns over the outlook for the world’s second-largest economy, which as recently as six months ago had investors betting on a robust recovery.

4. U.K. inflation

The U.K. is to release June inflation data on Wednesday and investors will be watching closely as it will likely determine the size of the Bank of England’s next rate hike.

The headline consumer price index is expected to ease to 8.2% year-over-year from 8.7% in May as food and fuel prices dip. Core inflation is also expected to edge lower, but the services component is expected to hold steady at a post-COVID high of 7.4%.

In its June meeting minutes the BoE said further tightening would be required if there were signs of persistent inflationary pressures in the economy, including in services CPI.

This could make August’s meeting a close call: an uptick in services CPI would probably lock in bets for another 50-basis point hike, while a lower reading would probably nudge the dial in favor of a smaller 25 bps increase.

5. Oil prices

Oil prices recorded their third-straight weekly gain last week and the rally could resume in the coming week as easing inflation, plans to refill the U.S. strategic reserve, supply cuts and disruptions underpin prices.

"While oil prices are likely slightly overbought in the very near term, touching the highest levels since early May, the bias appears to be for a grind higher," Rob Haworth, senior investment strategist at U.S. Bank Wealth Management told Reuters.

Oil prices gained nearly 2% last week, after supply disruptions in Libya and Nigeria heightened concerns that the markets will tighten in coming months.

Oil prices fell more than a dollar a barrel on Friday as the dollar strengthened and oil traders booked profits from a strong rally.

--Reuters contributed to this report

By Kevin Yao

BEIJING (Reuters) -China's central bank will use policy tools such as the reserve requirement ratio (RRR) and medium-term lending facility to weather the challenges facing the world's second-largest economy, a senior bank official said on Friday.

Momentum in China's post-pandemic recovery has slowed sharply after a brisk pickup in the first quarter, increasing pressure on policymakers for fresh stimulus measures.

According to the needs of the economic and price situation, the People's Bank of China (PBOC) "will make comprehensive use of various monetary policy tools, such as the reserve requirement ratio, medium-term lending facility, open market operations," said Zou Lan, head of the PBOC monetary policy department.

"In recent years, China has insisted on implementing a prudent and normal monetary policy, with sufficient policy space and abundant policy tools," Zou told a press conference, adding that the bank will keep credit growth appropriate and guide banks to increase lending to small and private firms.

The central bank will step up "countercyclical adjustments" to support the economic recovery, PBOC Deputy Governor Liu Guoqiang told the press conference.

China's exports fell last month at their fastest pace since the onset three years ago of the COVID-19 pandemic, data showed on Thursday. The economy likely grew 7.3% in the second quarter from a year earlier due to a low base, according to a forecast of Monday's data in a Reuters poll, but momentum is rapidly faltering.

The central bank cut the RRR - the amount of cash that banks must hold as reserves - in March, and cut its benchmark lending rates by a modest 10 basis points in June, the first such reduction in 10 months.

Analysts polled by Reuters expect the central bank to cut the RRR by 25 basis points in the third quarter.

Downward price pressure is building as consumer prices teetered on the edge of deflation and producer deflation worsened in June. But Liu said China has not seen deflation and there were no deflationary risks for the second half.

YUAN STABILITY, PROPERTY SUPPORT

China will keep the yuan basically stable and prevent sharp fluctuations, Liu said, adding that the currency will be underpinned by China's economic recovery, a current account surplus that is about 2% of GDP and foreign exchange reserves of more than $3 trillion.

"We have the confidence, conditions and ability to cope with various shocks and maintain the smooth operation of the foreign exchange market," Liu said. "As for the specific policy tools, we will use them reasonably according to the needs of the situation."

The currency rose on Friday, partly on Liu's reassurances.

Zou said there was room for making "marginal optimisation" of property polices considering profound changes in supply and demand in the real estate market.

Special loans worth 200 billion yuan ($28 billion) to help developers finish pre-sold housing projects will be extended to May 2024, Zou said. The original cutoff was March this year, the state-backed Securities Times reported.

Regulators this week extended some policies in a November rescue package in November to shore up liquidity in the embattled property sector, which accounts for one-fourth of China's economic activity.

($1 = 7.1283 Chinese yuan renminbi)

By Saqib Iqbal Ahmed

NEW YORK (Reuters) - Cooling U.S. inflation is accelerating a decline in the dollar, and risk assets around the world stand to benefit.

The dollar is down nearly 13% against a basket of currencies from last year’s two-decade high and stands at its lowest level in 15 months. Its decline quickened after the U.S. reported softer-than-expected inflation data on Wednesday, supporting views that the Federal Reserve is nearing the end of its interest rate-hiking cycle.

Because the dollar is a linchpin of the global financial system, a wide range of assets stand to benefit if it continues falling.

Weakness in the dollar can be a boon to some U.S. companies, as a weaker currency makes exports more competitive abroad and makes it cheaper for multinationals to convert foreign profits back into dollars.

The U.S. technology sector, which includes some of the big growth companies that have led markets higher this year, generates just over 50% of its revenues overseas, an analysis of Russell 1000 companies by Bespoke Investment Group showed.

Raw materials, which are priced in dollars, become more affordable to foreign buyers when the dollar declines. The S&P/Goldman Sachs Commodity Index is up 4.6% this month, on pace for its best month since October.

Emerging markets benefit as well, because a falling U.S. currency makes debt denominated in dollars easier to service. The MSCI International Emerging Market Currency Index is up 2.4% this year.

"For markets, the weaker dollar and its underlying driver, weaker inflation, is a balm for everything, especially for assets outside the U.S.," said Alvise Marino, foreign exchange strategist at Credit Suisse.

The greenback's tumble has come as U.S. Treasury yields eased in recent days, dulling the dollar's allure while boosting a wide range of other currencies, from the Japanese yen to the Mexican peso.

"That sound you hear is the breaking of technical levels across the foreign exchange markets," said Karl Schamotta, chief market strategist at Corpay. "The dollar is plunging toward levels that prevailed before the Fed started hiking, and we're seeing risk-sensitive currencies melt up on a global basis."

A continued fall in the dollar could boost profits for foreign exchange strategies such as the dollar-funded carry trade, which involves the sale of dollars to buy a higher-yielding currency, allowing the investor to pocket the difference.

The dollar's decline has already made the strategy a profitable one this year: An investor selling dollars and buying the Colombian peso would have collected 25% year-to-date, while the Polish zloty has yielded 13%, data from Corpay showed.

Paresh Upadhyaya, director of fixed income and currency strategy at Amundi US, is bearish on the dollar while betting on gains in the Kazakhstan tenge, Uruguayan peso and Indian rupee.

"When you look at what's going on right now, the outlook for the dollar remains pretty bleak," said Upadhyaya, who expects carry trades to thrive if the dollar keeps falling.

In the world of monetary policy, the dollar's decline may be a relief to some countries, as it removes the urgency for them to support their falling currencies.

Among them is Japan. The greenback has tumbled 3% against the yen this week and is set for its biggest weekly fall against the Japanese currency since January. Yen weakness has been problematic for Japan's import-reliant economy and raised expectations Japan would again intervene in markets to support its currency after doing so for the first time since 1998 last year.

Traders have also been watchful for potential action from Sweden's central bank given weakness in the Swedish krona. But this week, the dollar is down almost 6% against the krona and set for its biggest weekly drop since November.

Continued strength in the yen could see investors unwind the large bearish positions that have built up against the currency in recent months, pushing it higher, said Societe Generale (OTC:SCGLY) currency strategist Kenneth Broux.

Of course, being bearish the dollar has its own risks. One is a potential rebound in U.S. inflation, which could stoke bets on more Fed hawkishness and unwind many of the anti-dollar trades that have prospered this year.

Though inflation has cooled, the U.S. economy has remained resilient compared with other countries and few believe the Fed will cut rates anytime soon, which could potentially limit the dollar's near-term downside.

Still, Helen Given, FX trader at Monex USA, believes the Fed will wrap up its rate-hiking cycle before most other central banks, sapping the dollar’s long-term momentum.

While the dollar may pare some of its recent losses, "looking six months out it's likely the dollar will be even weaker than it is today," she said.

By Kevin Buckland

TOKYO (Reuters) - Asian stocks rose on Friday, on course for their best week this year, as a cooling in U.S. inflation stoked speculation that the Federal Reserve could pause rate hikes after this month.

The dollar sank to a fresh 15-month low against major peers and U.S. Treasury yields languished near multi-week lows following the sharpest weekly drop in four months.

Gold was poised for its best week in three months as the dollar floundered, while crude oil rose to the highest in nearly three months.

While money market traders still see a quarter point bump to the Fed funds rate on July 26 as close to a sure thing, they have reduced the chances of another this year to just 1-in-5.

Data on Thursday showed the smallest increase in U.S. factory gate inflation in nearly three years, reinforcing the milder inflation outlook after a report the previous day showing consumer price gains mitigated to the slowest pace in more than two years.

"What it means is we've got the Fed with its chest pretty much crossing the finish line at the end of the most aggressive tightening cycle in four decades, so it does warrant the rapid repricing that we've seen in many of these asset classes," said Tony Sycamore, a market analyst at IG in Sydney.

"The equity market absolutely took off, and the dollar is under intense pressure."

MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.7% on Friday to put it on track for a 5.4% weekly advance, the biggest for eight months.

Hong Kong's Hang Seng gained 0.52% and mainland Chinese blue chips added 0.12%. South Korea's Kospi jumped 1%.

Japan's Nikkei, though, was a notable outlier, flipping early gains to be last down 0.43% as it struggles to find its feet following its retreat from a 33-year peak reached at the start of this month.

U.S. E-mini equity futures also pointed to a 0.16% lower restart for the S&P 500, after the index rallied 0.85% overnight.

Meanwhile, the U.S. dollar index - which measures the currency against six major peers - edged about 0.1% lower to touch 99.637 for the first time since April of last year.

"The dollar index can probably trade down toward 98 over the coming weeks without too many problems," said IG's Sycamore. "I wouldn't be fighting that trend."

U.S. two-year Treasury yields, which tend to be most sensitive to the Fed policy outlook, languished at 4.63%, following a 30 basis point slide this week that extended its drop from last week's 16-year peak above 5%.

Ten-year yields wallowed around 3.77% following a 28 basis point decline since last Friday, when it reached an eight-month high at 4.094%.

Japan's market was again an outlier, with the 10-year yield rising as high as 0.485%, taking it the closest its been to the Bank of Japan's 0.5% policy ceiling since March 10.

Speculation that the BOJ could widen its 10-year yield band this month has been rising since a labor report a week ago showed solid growth in wages.

In Australia, the government's appointment of deputy governor Michele Bullock to lead the Reserve Bank of Australia from mid-September had little effect on markets.

The Aussie dollar was flat at $0.6891, following two days of 1.5% gains against its U.S. peer to take it to the highest in a month.

In commodities, gold edged to a new one-month high at $1,963.59, buoyed by the dollar's weakness. It has rallied nearly 2% this week.

Brent crude futures rose 27 cents, or 0.3%, to $81.63 per barrel on Friday. U.S. West Texas Intermediate crude futures rose 35 cents, or 0.5%, to $77.24.

By Wayne Cole

SYDNEY (Reuters) -Australia has appointed the first female head of its central bank, passing over the current governor to elevate his deputy to the high-profile job amid a public backlash over steeply rising interest rates.

Australian Treasurer Jim Chalmers and Prime Minister Anthony on Friday announced Michele Bullock would head the Reserve Bank of Australia (RBA) for the next seven years, having chosen not to reappoint Governor Philip Lowe for a second term.

Lowe will leave on Sept. 17, marking the end of his 43-year career at the bank. The decision comes as Lowe is due to accompany Chalmers to a Group of 20 meeting in India next week.

In a press conference, Chalmers said it was not out of the norm for a governor to only serve one term and he felt Bullock was best placed to lead the RBA through a coming reorganisation.

"This is a history-making appointment," Chalmers told reporters. "Michele Bullock will become the first woman to ever lead the Reserve Bank in this country."

The government has been under pressure to dump Lowe for encouraging people to borrow in 2021 by saying interest rates were unlikely to rise until 2024, only to start hiking two years early in mid-2022.

The central bank has since lifted rates 12 times to a decade-high of 4.1%, adding hundreds of dollars to monthly mortgage repayments at a time when a cost of living crisis is already stretching household budgets.

Lowe even took the extraordinary step of apologising to any borrowers who had acted on his policy assurances.

A SAFE CHOICE

Just this week, Lowe said it was possible rates would have to rise yet further to bring inflation to heel. He is due to chair the next two policy meetings in August and September and markets are divided on the likely outcomes.

Lowe had also said he would be honoured to stay if asked, but would understand if the government wanted a new leader. His two predecessors, again both career central bankers, were reappointed to second terms and each served 10 years in total.

"The Reserve Bank is in very good hands as it deals with the current inflation challenge and implementing the recommendations of the Review of the RBA," Lowe said in a statement on Friday.

Bullock, who joined the RBA in 1985 with a masters from the London School of Economics, is widely respected by analysts and financial markets showed little reaction to the change.

"My interpretation is this is much better than a political appointee," said Hugh Dive, chief investment officer at Atlas (NYSE:ATCO) Management. "Markets would have been concerned if it was someone very overtly political. So it's probably the best outcome."

The RBA is currently undertaking the biggest reorganisation in decades after an independent review into its operations recommended sweeping changes to the way policy was formulated and communicated.

"It is a challenging time to be coming into this role, but I will be supported by a strong executive team and boards," Bullock said in a statement.

JOHANNESBURG (Reuters) -The International Monetary Fund's executive board has approved an immediate $189 million disbursement to Zambia following its first review of a $1.3 billion loan programme, the IMF said on Thursday.

The IMF board meeting came after Africa's second-biggest copper producer clinched a deal last month with governments abroad including China to rework about $6.3 billion of its overseas debt.

"Swift finalization and signature of the Memorandum of Understanding with the OCC (Official Creditor Committee) will be important," said IMF Managing Director Kristalina Georgieva in a statement.

"Timely implementation of this agreement, together with agreements with private creditors on comparable terms, should restore Zambia's debt sustainability over the medium term," she added.

Zambia was the first African country to default on its sovereign debt during the COVID-19 pandemic and faced lengthy delays in restructuring negotiations.

The IMF said that Zambia's performance under the support programme had been strong, and that all quantitative performance criteria for the first review had been met.

The Fund now sees Zambia's total public debt falling to 88.5% of gross domestic product (GDP) by the end of 2026 from about 110% of GDP at the end of this year.

Although Zambia's economic growth is projected to moderate to 3.6% in 2023, it is expected to accelerate to 4.3% in 2024 and settle at around 5% per year over the medium term, the IMF said.

By Shivangi Acharya and Sarita Chaganti Singh

NEW DELHI (Reuters) - Global finance chiefs will meet in India next week to discuss increasing loans to developing nations from multilateral institutions, reforming the international debt architecture and regulations on cryptocurrency, Indian officials said.

The finance ministers and central bank governors from the Group of 20 (G20) nations will also discuss a multilateral agreement on taxing conglomerates with cross-border operations, while the Russian war in Ukraine was also bound to come up, they said.

The July 17-18 meeting in Gandhinagar, the capital of the western state of Gujarat, will be the third finance chiefs' meeting under India's G20 presidency and will set the tone for a leaders summit in New Delhi in September.

The meeting is likely to be attended by most senior treasury officials from G20 member-nations, including U.S. Treasury Secretary Janet Yellen, as well as the World Bank's newly appointed President Ajay Banga and the International Monetary Fund's Managing Director Kristalina Georgieva.

Senior treasury officials from Russia and China are also expected to attend, according to two Indian officials, who did not want to be named.

India will try to keep the focus of member nations on discussing issues of debt and other economic issues, and not push for any consensus on Ukraine war, one Indian official said, declining to be identified.

During the two-day meeting, the group is likely to discuss a "substantial" increase in annual loans to developing countries from multilateral institutions as recommended by an independent panel formed in March, said another Indian official, who also did not want to be named.

The independent panel, headed by economists Lawrence Summers and N.K. Singh, was commissioned by the G20 to propose reforms to multilateral development banks with a focus on increasing funding for sustainable developments goals and climate change, among others.

The official also said the group will continue to work towards resolving differences in helping low-income countries manage their debt burdens and free up funding for climate financing.

Countries like Zambia and Ghana have been waiting for big creditors to make progress in providing debt relief under the so called "Common Framework", which is led by the G20.

Global creditors, debtor nations and international financial institutions agreed in April to galvanize the Common Framework - a platform supposed to speed up and simplify the process of getting over-stretched countries back on their feet.

Though Zambia, locked in default for almost three years, struck a deal last month to restructure $6.3 billion in debt owed to governments abroad including China, many challenges remain.

The finance ministers and treasury heads will also attempt to bring agreement on the principles of managing cryptocurrencies in their respective geographies.

The first volume of a report and a "guidance note" to develop a globally coordinated framework for regulation and supervision of crypto assets will be discussed in Gandhinagar, India's Economic Affairs Secretary Ajay Seth said in a video address on Wednesday.

At the first meeting of the finance chiefs in February, the IMF endorsed the Indian government's position that crypto assets would require global and coordinated regulation, while giving sovereigns option to ban such assets.

The G20 is also expected to discuss the key differences in taxation of large multinational companies under a framework put forward by the Organisation for Economic Co-operation and Development (OECD).

The OECD agreed on Wednesday to defer levying taxes on large multinational companies by one year to 2025 until a common framework is in place.

Investing.com -- The pace of economic growth rose "slightly" since late May and the pace of inflation continued to slow as wage increases moderate to or nearing pre-pandemic levels, according to the Federal Reserve's Beige Book released Wednesday.

"Overall economic activity increased slightly since late May, [though] overall economic expectations for the coming months generally continued to call for slow growth," the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed's 12 reserve banks through June. 30.

The pick up in economic activity comes as several districts noted some slowing in the pace of inflation, the report said, though inflation expectations were "stable or lower over the next several months."

The somewhat improved outlook on inflation comes on the heels of data Wednesday showing that inflation cooled more than expected in June.  

The consumer price index rose 0.2% last month after edging up 0.1% in May, with annual inflation also slowing to a 3.0% pace from 4% a year earlier, marking the slowest pace of price pressures since March 2021.

On the labor market, while demand remained healthy, multiple districts reported that "wage increases were returning to or nearing pre-pandemic levels." 

By Sheila Dang

AUSTIN (Reuters) - Rapid advancements in artificial intelligence have the potential to exacerbate societal problems and even pose an existential threat to human life, increasing the need for global regulation, AI experts told the Reuters MOMENTUM conference this week.

The explosion of generative AI - which can create text, photos and videos in response to open-ended prompts - in recent months has spurred both excitement about its potential as well as fears it could make some jobs obsolete, upend economies and even possibly overpower humans.

"We are flying down the highway in this car of AI," said Ian Swanson, CEO and co-founder of Protect AI, which helps businesses secure their AI and machine learning systems, during a Reuters MOMENTUM panel on Tuesday.

"So what do we need to do? We need to have safety checks. We need to do the proper basic maintenance and we need regulation."

Regulators need look no further than at social media platforms to understand how unchecked growth of a new industry can lead to negative consequences like creating an information echo chamber, said Seth Dobrin, CEO of Trustwise.

"If we expand the digital divide ... that's going to lead to disruption of society," Dobrin said. "Regulators need to think about that."

Regulation is already being prepared in several countries to tackle issues around AI.

The European Union's proposed AI Act, for example, would classify AI applications into different risk levels, banning uses considered "unacceptable" and subjecting "high-risk" applications to rigorous assessments.

U.S. lawmakers last month introduced two separate AI-focused bills, one that would require the U.S. government to be transparent when using AI to interact with people and another that would establish an office to determine if the United States remains competitive in the latest technologies.

One emerging threat that lawmakers and tech leaders must guard against is the possibility of AI making nuclear weapons even more powerful, Anthony Aguirre, founder and executive director of the Future of Life Institute, said in an interview at the conference.

Developing ever-more powerful AI will also risk eliminating jobs to a point where it may be impossible for humans to simply learn new skills and enter other industries.

"We're going to end up in a world where our skills are irrelevant," he said.

The Future of Life Institute, a nonprofit aimed at reducing catastrophic risks from advanced artificial intelligence, made headlines in March when it released an open letter calling for a six-month pause on the training of AI systems more powerful than OpenAI's GPT-4. It warned that AI labs have been "locked in an out-of-control race" to develop "powerful digital minds that no one – not even their creators – can understand, predict, or reliably control."

"It seems like the most obvious thing in the world not to put AI into nuclear command and control," he said. "That doesn't mean we won't do that, because we do a lot of unwise things."

(This story has been corrected to say Seth Dobrin is CEO of Trustwise, not president of the Responsible AI Institute, in paragraph 5)