US Treasury: AI brings huge opportunities, risks to financial stability

The U.S. Treasury has made a public call for commentary to discuss the potential opportunities and threats posed by artificial intelligence to U.S. financial stability.
The U.S. Treasury has made a public call for commentary to discuss the potential opportunities and threats posed by artificial intelligence to U.S. financial stability.

The United States Treasury is preparing for a whipsaw of risk and opportunity from the artificial intelligence (AI) sector in the years to come. 

This was the theme as U.S. Treasury Secretary Janet Yellen gave the keynote speech at the Conference on artificial intelligence and financial stability. The event was hosted by the U.S. Financial Stability Oversight Council (FSOC) in partnership with the Brookings Institution on June 6-7.

According to FSOC, this is the first time in a decade that the council has hosted an event of this nature.

During her keynote address, Secretary Yellen issued a formal call for action in the form of a request for public comment on the risks and opportunities posed by AI from financial institutions, consumers, and other stakeholders with a vested interest in U.S. financial stability.

Yellen laid out several key opportunities for financial institutions using AI, including cybersecurity benefits and more accurate forecasting and predictions as well as customer service and account management.

However, as the secretary put it, “there are also new issues to confront, and this is a rapidly evolving field.” Referring to the “tremendous opportunities,” and “significant risks” posed by AI technologies, Yellen added “we have our work cut out for us.”

Among the potential risks, Yellen cited concerns of the centralization of AI models and data — something which could hypothetically expose numerous market institutions to a single point of failure. She also mentioned the propensity for AI to establish or exacerbate bias due to the black box nature of many models.

Related: EU watchdog urges banks to prioritize clients in AI usage

In related news, U.S. antitrust enforcer Jonathan Kanter has announced that his office is investigating the AI sector over monopoly concerns.

As Cointelegraph recently reported, Kanter’s concerns extend to the various components of the AI technology stack and whether or not a few companies control key chokepoints in the development process.

The office will presumably be looking at issues such as Microsoft’s wide-reaching grasp of the cloud computing market and Nvidia’s dominance in the AI chipset market.