SEC chair warns of financial crisis triggered by AI

Share post:

Gary Gensler, the chair of the Securities and Exchange Commission (SEC), has warned that artificial intelligence (AI) could trigger a financial crisis within the next decade. Gensler told the Financial Times that he believes “it’s nearly unavoidable” that AI will cause a market crash, and that reliance on models developed by tech companies could lead to economic chaos.

Gensler’s concerns stem from the fact that AI models are often complex and opaque, making it difficult to understand how they work and what risks they pose. In addition, he worries that banks are becoming too reliant on AI, and that a failure in one model could have a cascading effect on the entire financial system.

Gensler called for AI regulation that addresses both the underlying AI models built by tech companies and how they are used by Wall Street banks. He described this as a “cross-regulatory challenge,” as it will require coordination between different government agencies.

Wall Street banks have been enthusiastic adopters of AI, and have been experimenting with a variety of new technologies. However, some banks have also cracked down on the use of AI, citing concerns about risk. For example, Goldman Sachs, Deutsche Bank, and Bank of America all banned employees from using the ChatGPT chatbot at work earlier this year.

There are a number of potential risks associated with the use of AI in the financial sector. One concern is that AI models could be used to manipulate markets or to commit fraud. Another concern is that AI models could make mistakes, which could lead to significant financial losses. Additionally, the use of AI could lead to job losses in the financial sector, as AI-powered systems become capable of performing tasks that are currently done by humans.

The sources for this piece include an article in BusinessInsider.

Featured Tech Jobs

SUBSCRIBE NOW

Related articles

OpenAI claims New York Times manipulated ChatGPT “fabricate data”

OpenAI has challenged the New York Times' copyright lawsuit, asserting the newspaper manipulated ChatGPT to fabricate evidence. The...

Companies experiment with four day work week enabled by AI

The dream of a four-day workweek is becoming a reality for some, thanks to AI's integration into the...

Nvidia CEO says we no longer need to teach children to code

At the World Government Summit in Dubai, Nvidia CEO Jensen Huang presented a radical viewpoint, diverging from the...

Major companies monitoring virtual platforms using AI

A recent report has brought to light that major companies like Walmart, Delta, T-Mobile, Chevron, and Starbucks are...

Become a member

New, Relevant Tech Stories. Our article selection is done by industry professionals. Our writers summarize them to give you the key takeaways