Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), has voiced his concerns about the role of Artificial Intelligence (AI) in future financial crises. Gensler specifically highlights generative AI tools, such as ChatGPT, which have the potential to transform businesses and society. He warns that some AI models may prioritize corporate interests over those of investors, leading to conflicts of interest. The SEC has already taken action on this issue by proposing specific measures to address these conflicts within AI models. Gensler also raises concerns about investment advice that relies on AI, as it may be erroneous. He emphasizes that investment advisers have a fiduciary duty and that this duty applies even when using algorithms.
Gensler’s concerns about AI arise from his belief that parameters are set by humans who build AI models, and therefore companies and users should not solely rely on AI and should take responsibility for their decisions. His concerns are not without basis, as he himself fell victim to AI-generated news last month when false reports about his resignation spread through an AI platform. The lack of reliability and source verification in AI-generated texts is a problem that needs to be addressed.
AI is already a reality in many industries. Bitget’s crypto-exchange has introduced AI features for grid trading strategies, Microsoft and Amazon are exploring AI applications, and Elon Musk’s xAI aims to use technology to understand the nature of the Universe. Microsoft has partnered with Axelar to offer blockchain-based interoperability solutions, while Amazon has invested $100 million in an AI Innovation Center. These developments highlight the growing influence of AI and the need for regulators like the SEC to address its potential risks.
In conclusion, Gary Gensler’s concerns about AI in relation to future financial crises are rooted in the potential for conflicts of interest within AI models and the potential for erroneous investment advice. While AI offers numerous benefits, it also poses challenges, such as the lack of source verification in AI-generated texts. As AI becomes increasingly prevalent in various industries, regulators must address these risks to protect companies and investors.
SEC chairman shares concerns about artificial intelligence (AI)
Gensler’s concerns about AI arise from his belief that parameters are set by humans who build AI models, and therefore companies and users should not solely rely on AI and should take responsibility for their decisions. His concerns are not without basis, as he himself fell victim to AI-generated news last month when false reports about his resignation spread through an AI platform. The lack of reliability and source verification in AI-generated texts is a problem that needs to be addressed.
AI is already a reality in many industries. Bitget’s crypto-exchange has introduced AI features for grid trading strategies, Microsoft and Amazon are exploring AI applications, and Elon Musk’s xAI aims to use technology to understand the nature of the Universe. Microsoft has partnered with Axelar to offer blockchain-based interoperability solutions, while Amazon has invested $100 million in an AI Innovation Center. These developments highlight the growing influence of AI and the need for regulators like the SEC to address its potential risks.
In conclusion, Gary Gensler’s concerns about AI in relation to future financial crises are rooted in the potential for conflicts of interest within AI models and the potential for erroneous investment advice. While AI offers numerous benefits, it also poses challenges, such as the lack of source verification in AI-generated texts. As AI becomes increasingly prevalent in various industries, regulators must address these risks to protect companies and investors.
SEC chairman shares concerns about artificial intelligence (AI)
