Massachusetts regulators have begun investigating the use of artificial intelligence (AI) in the securities industry. This was said by William Galvin, the Secretary of the Commonwealth.
According to him, the agencies are concerned about the potential risks of how local firms use AI in their business and interact with investors through it.
Authorities have already sent letters to a number of companies demanding explanations of how and for what purposes they are using neural networks. The data must be provided by 16 August 2023.
The authorities are particularly interested in procedures that ensure that artificial intelligence does not place the firm’s interests above those of its clients.
“Public securities regulators must play an important role when it comes to AI and its impact on investors. … Without the requirements necessary to ensure transparency and dispute resolution, this technology could harm clients,” Galvin said.
The authorities have also targeted advertising materials by some companies, allegedly created with the help of neural networks.
Earlier the CFTC published a proposal to revise risk-management rules in light of threats posed by AI and cryptocurrencies.
In April, a group of European lawmakers announced plans to draft a bill to control the development of such technologies.
In July, UN representatives said, that AI-generated deepfakes harm information integrity and fuel hatred in society.
Researchers from OpenAI warned of the growing threat of using language models to spread misinformation.
Meanwhile, American scientists called for countering deepfakes created by “hostile states.”