Stop Worrying That AI Will Cause a Market Crash: Tyler Cowen

According to Gary Gensler, chair of the SEC, a market crash caused by artificial intelligence is “nearly unavoidable.” Like many other regulators, he has called for new regulations on AI to prevent such dire scenarios.

Such fears are considerably exaggerated. It is true that AI might cause a market crash — just as many events, some of them quite arbitrary or unexpected, have led to market downturns. On net, though, AI probably lowers the chances of a market crash.

One fear is that a small number of AI base models could lead investors to herd behavior, where ...