Somewhere out there in the dark corners of the AI world is the next Enron.

Enron was the Houston energy giant that collapsed after a massive accounting fraud emerged in 2001.

All of the main protagonists went to prison or died.

Enron had left its roots as a simple provider of energy and become a finance house, a trader of anything related to power.

It invented new markets and dominated them before regulators knew what was going on. It was an exciting business that was going to make life better for us all, it claimed.

When it was finally exposed for the sham it was, the defence from the executives was basically: no one told us not to do this.

Which rather ignored their massive political donations and lobbying against any regulation that might have scuppered their short-term, if entirely fake, profits.

And so to the AI industry, which is fending off nearly all attempts to impose meaningful regulations or even basic industry standards.

Politicians race to say they want to be a good home for the AI trade, imagining jobs and tax revenues, and not thinking about corporate malfeasance at all.

This week California governor Gavin Newsom vetoed a bill that would have asked Google, OpenAI and others to take reasonable precautions to protect public safety.

The bill, now binned, said tech companies should have a “kill switch” for technology that goes rogue.

Anyone think we might regret not having one of those, at some point?

Like Enron fans, AI enthusiasts believe in what they are doing. They are, mostly, sincere about the possibilities for healthcare and a thousand other things.

It is still a matter of inevitability that one huge AI company, perhaps many, will turn out to be entirely fraudulent. Built on sand, like Enron was.

And that they may come to wish they hadn’t fought off the regulation that would have stopped them in the first place.

Instead, they will have to go full Enron: no one said we couldn’t do this, they will say, as normal people observe the wreckage and wonder why anyone should need telling not to do that.

The debate for the PR sector is how in-bed with AI it becomes.

How quickly will consultancy firms move away from AI firms they can see are a PR disaster waiting to happen. And how many will just take the fees, no matter what?

Being Enron’s auditors was enough to do for Arthur Andersen.

Which PR firm is going to find itself speaking on behalf of AI people it later realises are full of it, while in the background it tries to tidy up paperwork so it can claim it just had no idea what was going on.

History repeats as tragedy then farce, they say.

If you are an investor or a consumer, none of it looks very funny.

Simon.english@roxhillmedia.com