Securities and Exchange Commission (SEC) Chairman Gary Gensler warned in a new interview that artificial intelligence (AI) will eventually lead to financial crises, The Hill reported. “This technology will be the center of future crises, future financial crises,” Gensler told The New York Times. “It has to do with this powerful set of economics around scale and networks.” Gensler predicted the future business systems in the U.S. will be reliant on two or three foundational models, which he says would make a financial crash more likely due to “herding,” which means all companies will rely on the same information. The SEC proposed a new rule last month that would require investment advisers to rid conflicts of interest in their technologies. Gensler said in a press release at the time that AI could place brokers’ or investment advisers’ interests above the investors’ interests, which is what the proposed rule would aim to curtail.
