Get news and commentary on the California issues you care about in one email.People walk around the New York Stock Exchange in New York City on March 19, 2024. Photo by Eduardo Munoz Alvarez, AP PhotoWall Street banks are spending billions to research AI and patent tools while regulations and public safeguards are lagging. California’s proposed rules for automated decision-making and other privacy protections are a step in the right direction.
Without sound regulation, the next financial crisis could be caused by AI, igniting in the mortgage or equity market due to a handful of banks relying on the same algorithms. Don’t just take it from me. Much smarter people like Gary Gensler, chair of the U.S. Securities and Exchange Commission, predicted that within 10 years AIThe major concerns are algorithmic complexity, a lack of transparency and biased or false information.
How else can AI impact our lives financially? AI can also start to “drift,” meaning it can deviate from its intended use and perpetuate bias. An AI could start thinking a certain race or address equals bad credit and deny loans based on that. regarding personal data. For example, a business would have to tell consumers that it uses automated decision-making, details about the algorithm’s logic and give a chance to opt out of the decision, especially if it involves finances.
And for the first time, there are rules dedicated to generative AI and training data. Businesses using language models will have to disclose if those models use personal information to train AI, and consumers will be able to opt out. America is falling behind on AI regulation. It cannot be slow to act like it was regarding social media when both sound regulation and innovation are possible.“I can count on CalMatters' reporting to be nonpartisan and afford all of us the opportunity to conclude our own opinions.”Catch up on the top stories in California with a summary of our reporting and commentary from the past week.