US CFTC seeks comment on compute derivatives as AI demand grows

The U.S. Commodity Futures Trading Commission (CFTC) has announced it is seeking public comment on compute derivatives contracts, as the rapid growth of artificial intelligence (AI) drives demand for new market products related to computing power. This move by the derivatives regulator aims to establish rules for markets that could assist companies and investors in managing the costs and availability of compute, a vital input for AI technology.

Wall Street investors have been actively participating in the AI trade for years, speculating on companies and assets that are likely to benefit from the technology's rapid adoption. The CFTC emphasizes the importance of having a robust derivatives market for compute, as highlighted by its Chairman Michael Selig in a statement: "America cannot win the AI race without a robust derivatives market for compute."

The request for comment is the initial step towards setting clear regulations for American compute markets, according to Selig. The company's rapid expansion has heightened demand for computing power, which has raised questions about how companies can hedge against exposure to compute costs and availability.