This video can be viewed at the below link.[1]

Hi, I'm Chair Gary Gensler. You can't spell that Chair without the “a” and the “i.” But I assure you that I am not AI.

I believe artificial intelligence is the most transformative technology of our times. Fully on par with the Internet comparable to the mass industrialization of our economy when the automobile came along 100 years ago.

AI opens up tremendous opportunities for humanity. As machines take on pattern recognition, particularly when done at scale, this can create great efficiencies across the economy, from health care to science to mail delivery.

AI also is already being used in finance. It's being used in cost centers, compliance programs, claims processing, making decisions about who gets a loan or credit. It's also fueled a rapid change in the field you would know, robo advisors and brokerage apps—the ones that investors like you may use to access the markets.

With opportunities, though, come challenges at both the micro level as well as the macro level. On the micro level, AI has the ability to narrow cast to each and every one of us. That means using this technology they can individually target or personalize not only the message to each of us, but even pricing and the products themselves. For instance, the streaming apps, they figured out long ago what I'm hooked on. Yeah, they can recommend another rom-com or two.

On the macro level, AI can also contribute to risk to our overall economy, to our national security, and beyond. We at the SEC are focused on how evolving AI affects investors, issuers, and the markets connecting them.

Back to the micro level, AI can lead to conflicts emerging when brokers and dealers are optimizing for their interest, for instance, their revenues and profits, along with investors’ interest.

Among micro challenges that are also AI-related fraud. Listen, fraud is fraud. There may be new challenges that come in AI facilitated fraud, but don't do it. Further on the micro level, if a public company is using AI, that company has to be honest about the role AI plays in its business and not exaggerate it to the point of AI washing.

There’s one thing on the macro level I want to raise. With the possibility of one, or even a small number of AI platforms or data aggregators dominating, this raises issues regarding financial stability. I believe that it's quite likely in the future after a financial crisis, we're going to look back and the after-action reports you're going to say, “ah, in the middle” with some base model or base data.

Stay tuned for more and I'll see you at upcoming Office Hours, unless, of course, you're the one who's the computer or computer generated.