Treasury Secretary Yellen warns of financial stability risks posed by AI

cyptouser5 months agoCryptocurrencies News79
US Treasury Secretary Janet Yellen expressed significant concerns about the potential dangers artificial intelligence (AI) poses to the stability of the financial system.

Yellen made the remarks during a keynote address at a conference on AI and financial stability on June 6. Her speech stressed the urgency of addressing these emerging risks and called of both the government and private sectors to collaborate on finding solutions.

The Treasury secretary said:

“This [AI] is a rapidly evolving field. We have our work cut out for us.”

Increasing risk

Yellen acknowledged the advancements AI has brought to the financial sector, such as improved fraud detection and enhanced customer service through chatbots.

However, she and other experts cautioned that deeper integration of AI could lead to increased risks, including the potential for AI to be misused in scams or market manipulation through misinformation.

Yellen warned:

“Insufficient or faulty data could also perpetuate or introduce new biases in financial decision-making.”

She highlighted the complexities of AI models, the inadequacies in current risk management frameworks, and the reliance on a limited number of models by numerous market participants as key areas of concern.

The Treasury Department has issued a request for information to gather insights from stakeholders about the uses, opportunities, and risks of AI in the financial services sector. This initiative is intended to inform future policymaking by incorporating expert opinions and current practices.

Yellen said:

“The tremendous opportunities and significant risks associated with the use of AI by financial companies have moved this issue toward the top of Treasury’s and the Financial Stability Oversight Council’s agendas.”

AI under scrutiny

Yellen’s warning comes amid a wider governmental scrutiny of both AI and the companies behind the technology. The DOJ is reportedly preparing to investigate multiple tech giants, including Nvidia and Microsoft, over antitrust and competition concerns related to AI technology.

US antitrust enforcer Jonathan Kanter announced plans to investigate the AI sector due to concerns about potential monopolies, according to a Financial Times report.

Kanter highlighted the need to examine AI’s competitive landscape, focusing on areas like computing power, data for training large language models (LLMs), cloud services, engineering talent, and hardware.

Kanter emphasized the urgency of acting to prevent dominant tech firms from monopolizing the AI market. He suggested real-time regulatory intervention to be effective and less invasive.

A particular concern is the scarcity of graphics processing units (GPUs) necessary for training LLMs, with rising demand impacting chip allocation.

Mentioned in this article
Janet Yellen
The content on this website comes from the Internet. Due to the inconvenience of proofreading the authenticity and accuracy of the copyright or content of some content, it may be temporarily impossible to confirm the authenticity and accuracy of the copyright or content. For copyright issues or other issues caused by this, please Call or email this site. It will be deleted or changed immediately after verification.

related articles

US seizes $54M worth of Ethereum linked to illegal narcotics business

The U.S. Department of Justice announced the seizure of 30,000 Ether (ETH), valued at $54 million, t...

Bitcoin repeats '2016 history perfectly' amid $350K price prediction — Traders

Bitcoin repeats '2016 history perfectly' amid $350K price prediction — Traders

55966e89˃Bitcoin (BTC) is replicating the same path as it did after the 2016 Bitcoin halving event,...

Bloomberg analyst calls for FOIA request into SEC's Ethereum ETF decision

Bloomberg ETF analyst James Seyffart called for freedom of information access (FOIA) requests regard...

Bad blockchain forensics convict the user of a Bitcoin mixer — as its operator

Bad blockchain forensics convict the user of a Bitcoin mixer — as its operator

b98df8a0˃I was sitting at the counsel table next to 35-year-old Roman Sterlingov at the largest Bitc...

Mt. Gox trustee to start Bitcoin, Bitcoin Cash repayments in July

Mt. Gox trustee to start Bitcoin, Bitcoin Cash repayments in July

55966e89˃Mt. Gox, the cryptocurrency exchange that lost 850,000 Bitcoin in investor funds in 2024, w...