Fed's Schmid: Need to understand if AI "ecosystem" getting too big to fail
Federal Reserve's Kansas City President Jeff Schmid has expressed concern that the rapid growth of the artificial intelligence industry could lead to a situation where the network of firms and contracts becomes so large that it is "too big to fail." Schmid noted that the Fed must begin to assess whether the AI ecosystem is developing in a way that might require public bailouts, similar to what occurred during the 2007 to 2009 financial crisis when major financial institutions were rescued due to their size and influence on the broader economy.
He emphasized the importance of understanding the systemic risks within this rapidly expanding sector.
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