The United States Treasury is gearing up for a whirlwind of risks and opportunities stemming from the artificial intelligence (AI) industry in the upcoming years. This was the central theme of U.S. Treasury Secretary Janet Yellen’s keynote address at the Conference on artificial intelligence and financial stability. The event, held on June 6-7, was organized by the U.S. Financial Stability Oversight Council (FSOC) in collaboration with the Brookings Institution.
According to FSOC, this marks the first occasion in a decade that the council has hosted an event of this kind. Secretary Yellen used her keynote speech to issue a formal call to action, inviting public feedback on the potential risks and benefits of AI for financial institutions, consumers, and other stakeholders invested in U.S. financial stability.
Yellen highlighted several key advantages that AI offers to financial institutions, such as improved cybersecurity, more precise forecasting and predictions, as well as enhanced customer service and account management. However, she emphasized that the field is rapidly evolving, presenting both new challenges and opportunities. Yellen acknowledged the “tremendous opportunities” alongside the “significant risks” associated with AI technologies, stating that there is much work to be done.
Addressing potential risks, Yellen raised concerns about the centralization of AI models and data, which could lead to vulnerability across multiple market institutions in case of a single point of failure. She also pointed out the potential for AI to perpetuate bias due to the opaque nature of many models.
In related developments, U.S. antitrust enforcer Jonathan Kanter announced an investigation into the AI sector over monopoly concerns. Kanter’s probe encompasses various components of the AI technology stack, focusing on whether a few companies control critical chokepoints in the development process. The investigation will likely scrutinize issues such as Microsoft’s dominance in the cloud computing market and Nvidia’s stronghold in the AI chipset market.