AI boom raises systemic risk concerns as ecosystem expands: Kansas Fed official

Kansas City Federal Reserve President Jeff Schmid has flagged concerns about the growing interconnectedness within the artificial intelligence industry and its potential systemic risks. Schmid emphasized the need for better understanding of the emerging AI ecosystem and its economic significance.

Drawing parallels to the financial system before the 2008 crisis, Schmid pointed to the rapid investment in AI infrastructure as raising questions about possible systemic risks. His comments underscore worries among policymakers about the pace and scale of AI expansion without adequate oversight.