SEC Chair Gensler Warns: AI Poses Threat to Financial Stability

Securities and Exchange Commission Chair Gary Gensler expressed concerns about the potential risks posed by artificial intelligence (AI) in the financial industry. Gensler warned that the reliance on a few AI models could create a monoculture and herding effect, leading to a risk in the entire financial system. He cited examples of cloud computing and search engines as markets dominated by a few major players and expressed worries about similar concentration in the AI market. Gensler highlighted the challenge of regulating new technologies across different entities and mentioned the SEC's contemplation of new rules to regulate AI.