US CFTC seeks comment on compute derivatives as AI demand grows

The U.S. Commodity Futures Trading Commission (CFTC) is seeking public comment on compute derivatives contracts, as the growing demand for artificial intelligence (AI) drives the need for new market products tied to computing power. This move by the derivatives regulator aims to establish rules for markets that can assist companies and investors in managing the cost and availability of compute, a crucial input for AI.

Wall Street investors have been actively investing in the AI trade for years, betting on companies and assets that are expected to benefit from the rapid adoption of the technology. The CFTC has expressed its concern over the rapid expansion of AI, which has led to an increased demand for computing power, posing questions about how companies can hedge their exposure to compute costs and availability.

The CFTC Chairman, Michael Selig, emphasized the importance of a robust derivatives market for compute, stating that America cannot win the AI race without such a market. He added that this request for comment marks the first step toward setting clear rules for American compute markets.

The CFTC is currently seeking comments on various aspects of compute derivatives, including cash markets, market oversight and manipulation concerns, customer protection, and perpetual compute futures. The regulator aims to gather input from stakeholders to develop appropriate regulations that can help manage the cost and availability of compute in the AI-driven market.