SEC: artificial intelligence will lead to 'inevitable' financial crisis without regulation

Andrew Harnik/AP file

Chairman of the US Securities and Exchange Commission (SEC) Gary Gensler has warned that a financial crisis caused by unregulated use of artificial intelligence is almost inevitable in the next 10 years.

Here's What We Know

He said that if all players in the market rely on the same AI tools, it could lead to herd behaviour and chain reactions when sharp fluctuations occur.

Gensler believes that in the future, people will blame any particular AI models they relied on for the crisis.

He noted that the financial industry is actively adopting AI technologies and the regulatory system is not yet ready to control this. The SEC's authority extends to the financial industry, not AI, Gensler added.

The SEC chief promised to take action within the law to prevent a crisis due to uncontrolled adoption of artificial intelligence.

Source: Financial Times