Understanding the Implications of AI on Financial Markets

The rapid advancement of surprisingly capable AI is raising questions about AI's impact on virtually all aspects of our economy and society. The nexus of AI and finance is especially salient, building on the impact AI has already had on trading and other finance-related domains. Finance may also provide some early tests in AI regulation, as existing regulatory functions may need to stretch to cover new issues posed by the latest AI advances. I discuss in particular how AI could exacerbate problems of market manipulation, and otherwise create loopholes in regulatory regimes. Finally, I suggest ways to anticipate AI impacts and evaluate capabilities of advanced interactive AI.