US Securities and Exchange Commission Chairman Gary Gensler reportedly said advertiser And that without some form of intervention, the financial crisis caused by the widespread use of artificial intelligence is “almost impossible to avoid.”
The president’s comments came during an interview with the Financial Times, where, according to the article, Gensler said the crisis could come within a decade.
The president’s concerns clearly revolve around the centralization of AI models and cloud service providers.
According to the interview:
I think we will face a financial crisis in the future […] If everyone is relying on the core model and the core model is not at the broker dealer, but at one of the big tech companies. How many cloud providers do we have in this country?
Along with regulating cryptocurrencies, artificial intelligence has become one of the biggest regulatory challenges facing the SEC. According to the Financial Times, Gensler is concerned about over-reliance on similar models (e.g., ChatGPT) leading to herd behavior on Wall Street and throughout US financial markets.
Related: Gary Gensler confirms the SEC’s use of artificial intelligence in financial surveillance
Gensler’s position is not new. In 2020, Gensler Co-authored A paper titled “Deep Learning and Financial Stability,” in which he declared a similar view, along with Lily Bailey, who was then a research assistant at MIT but now works at the Securities and Exchange Commission as assistant chief of staff, According to To her LinkedIn page.
According to a 2020 paper, the increasing use of AI systems in the financial system “may lead to financial system fragility and economy-wide risks.”
The study continues with an implicit call for government regulation: “Current financial sector regulatory regimes – built in an earlier era of data analytics technology – are likely to fail to address the systemic risks posed by the widespread adoption of deep learning in finance.”