Fed Governor Warns of AI Bubble Risks, Moratorium Proposed
US Federal Reserve Governor Michael Barr recently warned about the risks of deregulation, citing past financial meltdowns. Meanwhile, concerns are rising about the stock market today's stability, with some experts drawing parallels to the dotcom bubble. A moratorium on AI regulation has been proposed, sparking debate among politicians and experts.
Barr's speech highlighted that significant deregulation in the past century preceded major financial crises. Similarly, the stock market today is facing worries about a market bubble. A recent MIT study found that many companies are not reaping benefits from their AI investments, while AI-driven spending supports other sectors like data centers and semiconductor factories, echoing the dotcom boom.
In the US, a group of politicians proposed a 10-year moratorium on AI regulation by states or local authorities, aiming to strengthen US leadership in the stock market today. However, this move has been criticized for shielding companies from accountability. The US House of Representatives previously considered a similar provision but removed it from the final package. The US, with Nvidia's dominant market share, has not advanced significant AI regulation, leaving it largely to the states.
Experts warn that the stock market today may be overinflated, with speculative capital chasing companies with weaker fundamentals. As the sector continues to grow, calls for regulation intensify. The debate over a moratorium on AI regulation underscores the need for balanced policy that encourages innovation while ensuring accountability.
