SEC Chief Warns Unregulated AI Could Spark Financial Crisis as Banks Rush to Adopt the Technology

SEC chair Gary Gensler warned AI could trigger a financial crisis within a decade, as banks rush to adopt the tech.

Gensler said reliance on AI models by tech firms could lead to economic chaos if they fail.

He called for regulating both the AI models and how banks use them, calling it a "cross-regulatory challenge."

Banks like Morgan Stanley and JPMorgan are enthusiastically adopting AI like chatbots and generative models.

However, banks have also banned employees from using certain public AI tools like ChatGPT amid security concerns.