AI adoption is no longer optional: FM Sitharaman

Finance Minister Nirmala Sitharaman emphasized on Friday that institutions cannot treat artificial intelligence adoption as an either-or choice, urging a focus instead on responsible use and risk management. She argued that failure to adopt AI carries its own dangers, as businesses risk becoming less competitive or obsolete in an era where AI reshapes industries.

Sitharaman stressed that as AI moves from providing suggestions to taking direct actions, the potential for error, fraud, and misuse escalates, necessitating human oversight and accountable decision-making. She urged regulators, boards, and senior management to take a more active role in overseeing AI deployment, ensuring clear visibility into its use cases, decision-making processes, data sources, and potential failure points.

Higher-risk AI applications should face stricter scrutiny both before deployment and throughout their lifecycle. Sitharaman also called for greater coordination among financial regulators, competition authorities, data protection bodies, and cybersecurity agencies, as AI increasingly blurs traditional sectoral boundaries.