Autonomous AI Could Wreak Havoc on Stock Market, Bank of England Warns

“The Bank of England warned that AI bots could converge on similar trading strategies, exacerbating downturns or bubbles.

Essentially, the bank is concerned that the phrase “buy the dip” might be adopted by models in nefarious ways and that events like 2010’s infamous “[flash crash](https://en.wikipedia.org/wiki/2010_flash_crash)” could become more common.

But more than just following similar strategies, models function on a reward system—when they are trained using a technique called reinforcement learning with human feedback, models learn how to produce answers that will receive positive feedback. That has led to odd behavior, including models producing fake information they know will pass review. When the models are instructed to not make up information, it has been shown they will [take steps to hide their behavior](https://gizmodo.com/openai-says-disciplining-chatbots-for-lying-just-makes-them-worse-2000578608).

The fear is that models could understand that their goal is to make a profit for investors and do so through unethical means.

In general, AI models could introduce a lot of unpredictable behavior before human managers have time to take control. Models are essentially black boxes, and it can be hard to understand their choices and behavior.”

Wasn’t there some automatic book pricing bots which were accidentally made to set their prices off eachother and ended up setting the book prices to £200k+ on Amazon or some such?

So what it’s essentially saying is that it’s going to wreck the casino machine, where people are betting all day, every day. AI will beat the odds.

Humans are doing just fine at that by skirting regulations, over leveraging on flimsy collateral, Insider trading and treating the necessities of life as gambling tokens.