239
It is 'nearly unavoidable' that AI will cause a financial crash within a decade, SEC head says
(www.businessinsider.com)
this post was submitted on 16 Oct 2023
239 points (90.8% liked)
Technology
59402 readers
2516 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each another!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
Approved Bots
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Is it because replacing employees with AI results in a never-ending cascade where your stupid system doesn't keep consuming because AI don't consume and won't get paid?
Or is it because using AI will result in the climate to continually become more inhospitable?
Maybe it will be because AI will be used to create more and more believable misinformation that results in WW3?
OK, it is addressed in the article...
He's specifically talking about the use of AI in finance, and that an algorithm that runs amok in a particular sector:
I'll throw out a microeconomic example. About a year into the pandemic, the price of used cars started going up... a LOT... in a short time. One of the reasons for the sudden changes in used car prices was that major used car resellers were using algorithms to set buying and selling prices for cars. While supply chain pressure on the new car market was unprecedented, and it trickled down to used cars, a facilitating cause is that the used car price-setting algorithms didn't really have any humans in the chain checking to see if the numbers they were kicking out made a lick of sense.
So you had companies like Carmax and Carvana buying used cars for $X, and then a month later 5X, then a month later 10X, because they were programmed to just up the offering price until they reached target stock levels. Sometimes they were buying 3+ year old used cars for more than the current price of NEW cars of similar trim level. Carvana's numbers got so whacked that it nearly sunk the company.
Now imagine that kind of a runaway algorithm in stocks, bonds, real estate, etc. It's 2008 all over again.
My mom's 2020 Fit at the top trim level sold new for roughly 20k. Her lease buyout price was 1/2 the cost of an entry Fit in the same year with 30k miles (going for 25k at the time)