Financial Crash Caused by AI 'Nearly Unavoidable'

AI could cause a “nearly unavoidable” financial crisis if regulators cannot get a handle on it soon, the head of the SEC said this week.

  • An SEC chairperson says that the lack of diversity in AI models used by companies could one day pose a significant threat to U.S. financial stability.
  • While various open-source AI models exist, most entities today rely on a small number of tools developed by a select group of players, such as OpenAI’s ChatGPT.

Wall Street has begun introducing AI-powered technology from market monitoring to automating account opening.

  • “I do think we will in the future have a financial crisis,” the chairperson says. “In the after action reports, people will say ‘Aha! There was either one data aggregator or one model…we’ve relied on.’”

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