Hasn’t this been part of the religious experience of much of humanity, in the past and still in the present too? (possibly strongest in the Islamic world today). God knows all things, so “he” knows your thoughts, so you’d better bring them under control… The extent to which such beliefs have actually restrained humanity, is data that can help answer your question.
edit: Of course there’s also the social version of this—that other people and/or the state will know what you did or what you planned to do. In our surveilled and AI-analyzed society, detection not just of crime, but of pre-crime, is increasingly possible.
This is because he thinks they are not sentient, because of a personal theory about the nature of consciousness. So, he has the normal opinion that suffering is bad, but apparently he thinks that in many species you only have the appearances of suffering, and not the experience itself. (I remember him saying somewhere that he hopes animals aren’t sentient, because of the hellworld implications if they do.) He even suggests that human babies don’t have qualia until around the age of 18 months.
Bentham’s Bulldog has the details. The idea is that you don’t have qualia without a self, and you don’t have a self without the capacity to self-model, and in humans this doesn’t arise until mid-infancy, and in most animals it never arises. He admits that every step of this is a fuzzy personal speculation, but he won’t change his mind until someone shows him a better theory about consciousness.
These views of his are pretty unpopular. Most of us think that pain does not require reflection to be painful. If there’s any general lesson to learn here, I think it’s just that people who truly think for themselves about consciousness, ethics, AI, philosophy, etc, can arrive at opinions which no one else shares. Having ideas that no one else agrees with, is an occupational hazard of independent thought.
As for your larger concern, it’s quite valid, given the state of alignment theory. Also, if human beings can start with the same culture and the same data, but some of them end up with weird, unpopular, and big-if-true ideas… how much more true is it that an AI could do so, when it has a cognitive architecture that may be radically non-human to begin with?