SEC Chair Gensler Warns AI Could Trigger the Next Financial Crisis

– SEC Chair Gary Gensler warns about the potential risks associated with artificial intelligence (AI) in causing a large-scale economic crisis. –

Gensler expresses concerns about the concentration of financial information and advice provided by a few base-layer generative AI models,

– creating a "monoculture" of economics that poses a risk to the entire economy. If everyone relies on the same AI-generated data, it could lead to a catastrophic outcome if a certain market, like the housing market, experiences a downturn.

The SEC is working on proposing new regulations to mitigate the potential abuse of AI by bad actors.

– Gensler cites an example of AI-generated text from a bot Twitter account spreading a false rumor about his resignation, highlighting the dangers of mass deception through AI. –

The issue of personalized AI algorithms targeting naive individuals for financial fraud is another concern raised by Gensler.

– The capability of AI to personalize campaigns makes it a potent tool for perpetrating financial fraud schemes.

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