The U.S. Treasury is gearing up for a rollercoaster ride of risk and opportunity in the realm of artificial intelligence (AI) in the upcoming years. This was the central theme of U.S. Treasury Secretary Janet Yellen’s keynote address at the Conference on AI and financial stability. The event was organized by the U.S. Financial Stability Oversight Council (FSOC) in collaboration with the Brookings Institution on June 6-7.
FSOC noted that this was the first instance in a decade where the council had hosted an event of this kind. Secretary Yellen used her speech to issue a formal call to action by inviting public commentary on the risks and opportunities presented by AI from various stakeholders, including financial institutions and consumers, who have a vested interest in maintaining U.S. financial stability.
Yellen highlighted numerous advantages for financial institutions utilizing AI, such as improved cybersecurity, more precise forecasting, enhanced customer service, and improved account management. However, she also acknowledged the need to address new challenges in this rapidly evolving field, emphasizing the need to confront the significant risks alongside the tremendous opportunities that AI technologies bring.
In discussing potential risks, Yellen raised concerns about the centralization of AI models and data, which could potentially expose multiple market institutions to a single point of failure. She also pointed out the risk of AI perpetuating bias due to the opaque nature of many models.
In a related development, U.S. antitrust enforcer Jonathan Kanter announced that his office is investigating the AI sector for potential monopolistic practices. Kanter’s concerns extend to different components of the AI technology stack and whether a few companies control crucial points in the development process. The investigation is expected to examine issues like Microsoft’s dominance in the cloud computing market and Nvidia’s stronghold in the AI chipset market.