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Hallucinations are a GenAI-specific problem - not something that applies to AI systems broadly. The people who worry about AI takeover are talking about Artificial General Intelligence (AGI), which isn't the same as GenAI like LLMs. AGI is defined as at least as intelligent as a human. If it's not, then by definition it's not AGI.
The reason people worry about AGI is that intelligence is what makes us the most powerful species on the planet. The moment something more intelligent shows up, we can't outsmart it. It's like stepping into an elevator with someone way stronger than you - whether you survive the ride depends on them, not you.
not to over examine a metaphor too much but the elevator example is why weapons exist.
I assume what you're suggesting is that we can always "pull the plug" or smash the computer if it gets too smart and starts making threats.
While technically true, I think it both assumes and overlooks a lot. You might not be able to do that once the system has gotten internet access and potentially made thousands of copies of itself. A sufficiently intelligent system might pretend to be dumber than it really is while you still have it air-gapped in a lab - and even if not, we don't really have the capacity to imagine just how convincing a true AGI could be. It could try to bribe you or make more terrifying threats than you can even think of.
There's also this one example (~~for which I unfortunately can't find the~~ source) where a journalist was questioning whether AGI could truly escape like that. So they made a deal where the journalist acted as the AI scientist and the other person played the AGI. It didn't take long until that journalist, according to the rules of the game, posted on his social media that he let the AGI escape. They even replayed the game, and he let it escape again. It was never revealed how this happened, but suffice to say that if even a human can do it, then it's not going to be an issue for AGI.