This article briefly:
•Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), warned that centralized artificial intelligence could pose a threat to the financial system and create a monoculture.
•Gensler noted that regulators currently lack oversight of AI models, which will play a vital role in the financial sector.
•He insisted on the need for “diversity of models and diversity of data sources” to prevent the creation of brittle systems.
SEC Chairman Gary Gensler is back at it again. This time, it’s targeting the AI industry rather than cryptocurrencies. Moreover, the financial regulator claims that centralized AI could pose a threat to the financial system.
The latest warning from the “live crypto police” came during a virtual fireside chat hosted by Public Citizen on Jan. 17.
Artificial Intelligence Threats
He said that a centralized AI market with only a few models could lead to financial system fragility. This could happen if financial players become too dependent on them for financial data.
Gensler compares the rise of AI to cloud services and search providers. In the United States, there are three major players in this field: Amazon, Microsoft, and Google.
“I believe it’s probably inevitable that we’ll have large base models that measure with the fingers of one hand, and individual data aggregators, if not two or three.”
He added that this situation would create a "monoculture" where hundreds or thousands of financial players might rely on central data or central AI models.
Gensler also said regulators have no oversight of artificial intelligence models that will play a key role in the financial sector. The comments suggest Gensler is looking for his agency to regulate AI, just as it does cryptocurrencies.
He said there were “central nodes” that the entire financial sector could rely on that were currently unregulated.
“If those nodes fail, the monoculture will move in a single direction, and then society and the entire financial sector will be at risk.”
He added that U.S. regulators must ensure "diversity of models and diversity of data sources" or "you're going to end up with a very fragile system."
Gary Genlser has said similar things about the crypto industry, labeling it a “wild west” that threatens traditional finance. In September, he warned financial advisors about using artificial intelligence, and in August, he said AI could destabilize financial markets through deep learning.
Artificial Intelligence Latest News
The field of artificial intelligence is currently dominated by a handful of companies, including OpenAI, Microsoft, Google, and Anthropic.
This week, Google Deepmind said its new artificial intelligence system had made a major breakthrough on one of the most difficult tests of high-level geometry problems.
So far, most of the focus has been on large language models, but math-based AI is being developed that might make Gary Gensler and his fellow TradFi folks mad.
Additionally, AI has been a focus of the World Economic Forum in Davos this week. The WEF has also reported on the risks of AI and its role in creating misinformation and disinformation. #人工智能 #GaryGensler
