UBS Analysts See Fake AI Content Feeding Market Disruptions

The spread of artificial intelligence has the potential to be “highly disruptive” to financial markets as the technology aids the publication of false information, and makes leaks of intellectual property more likely, according to analysts at UBS Group AG.

(Bloomberg) — The spread of artificial intelligence has the potential to be “highly disruptive” to financial markets as the technology aids the publication of false information, and makes leaks of intellectual property more likely, according to analysts at UBS Group AG.

In an ESG investing op-ed published Friday, UBS analysts Annabel Willder, Victoria Kalb and Julie Hudson listed all the ways in which the increasing adoption of generative AI might results in a number of ethical issues.

“Inaccurate information or ‘confabulations’ generated by AI models and that relate to regulators, companies or public figures could be widely shared, with potential market implications,” the analysts wrote.

Such examples are already starting to appear. Earlier this week, US stocks briefly declined after a falsified photograph of an explosion near the Pentagon went viral across social media platforms. The event stands out as what appears to be the first major instance of an AI-generated image moving markets and comes just months after OpenAI launched ChatGPT, setting off a global race to develop similar services.

In light of such risks, many banks have placed restrictions around the use of generative AI programs. Earlier this year, firms including Bank of America Corp., Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and Wells Fargo & Co. banned usage of the tool, with Bank of America telling employees that ChatGPT and openAI are prohibited from business use, Bloomberg reported in February. JPMorgan Chase & Co. has curbed its staff’s use of the ChatGPT chatbot.

The spread of such technology is likely to make it harder to distinguish between reality and so-called deepfakes, according to the UBS analysts. Risks include the publication of fake videos of chief executives issuing false corporate updates, or of well-known investors announcing adjustments to their holdings, all of which could impact markets, the analysts said. 

“ESG considerations in light of the increasing adoption of generative AI are significant,” they wrote. “Notably, we believe deepfake and inaccurate information could have significant market impacts if regulators, company representatives or other public figures are misrepresented.”

At the same time, interest in AI has changed the fortunes of companies behind the technology. Chipmaker Nvidia Corp. is on track to reach a $1 trillion market value following an AI-fueled sales forecast, as investors pile into companies that provide components essential to the development and hosting of artificial intelligence.

Artificial intelligence systems may become as commonplace as computers, printers and the internet, according to the UBS analysts, noting that the technology represents opportunities for industries such as education and medicine.

The analysts also cited risks that AI will make it easier for intellectual property and trade secrets to be leaked as sensitive information is fed into such systems by users seeking to benefit from the technology’s analysis. 

“Any sharing of IP, whether inadvertent or not, has the potential to cause harm to companies, or industries, if steps are not taken to avoid IP and copyright infringement,” the UBS analysts said. 

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