U.S. financial regulators’ annual report warns of AI risks

A panel of regulators warned on Dec 14 that the fast adoption of synthetic intelligence (AI) might create new dangers for the USA’ monetary system if the expertise will not be adequately supervised.

The Monetary Stability Oversight Council, comprised of prime monetary regulators and chaired by Treasury Secretary Janet Yellen, flagged the dangers posed by AI for the primary time in its annual monetary stability report.

Although the crew acknowledged AI’s potential to drive innovation and effectivity in monetary establishments, they harassed the necessity for corporations and regulators to stay vigilant as a result of swift technological developments.

In its annual report, the group emphasised that AI carries particular dangers, similar to cybersecurity and mannequin dangers. It advised that corporations and regulators improve their information and capabilities to observe AI innovation and utilization and determine rising dangers.

In keeping with the report, particular AI instruments are extremely technical and sophisticated, posing challenges for establishments to clarify or monitor them successfully. The report warns that corporations and regulators could overlook biased or inaccurate outcomes with out a complete understanding.

The report additionally highlighted that AI instruments more and more rely on intensive exterior knowledge units and third-party distributors, bringing forth privateness and cybersecurity issues.

Sure regulators, together with the Securities and Trade Fee (a part of the panel), examined corporations’ AI utilization. Concurrently, the White Home has issued an govt order to deal with and cut back AI dangers.

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Pope Francis, in a letter on Dec. 8, expressed issues in regards to the potential threats of AI to humanity. He advocates for a world treaty to ethically regulate AI improvement, cautioning towards the danger of a “technological dictatorship” with out correct controls.

Tech figures like Elon Musk and Steve Wozniak have voiced issues in regards to the swift progress of AI. Over 2,600 tech leaders and researchers, together with Musk and Wozniak, signed a petition in March 2023, urging a “pause” in AI improvement. They emphasised the potential “profound dangers to society and humanity” posed by AI developments surpassing GPT-4.

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