You may not think of the U.S. when it comes to having a czar in a leadership role. However, Axios reported last week that President-elect Trump is considering naming an AI czar that would be responsible for coordinating policy and governmental use of AI. This is notable because, as of now, the U.S. does not have a central agency governing and regulating the use of AI.
If put into power, a U.S. AI czar would potentially be responsible for unifying the country’s AI strategy across government and private sectors. The AI czar would also be charged with creating regulatory clarity and streamlining regulations for AI development in key industries such as fintech, healthcare, and eCommerce. Given the U.S.’s current role in the global economy, an AI czar could play a role in setting global standards for fintech AI regulation.
Benefits
There are some surprising benefits to a potential AI czar taking leadership in the U.S. First, the leader would have the potential to coordinate AI innovation and guide global efforts. This centralized orchestration could accelerate the development of AI-powered fintech solutions like fraud detection, credit scoring, and personalization strategies. Additionally, for both banks and startups, having clear, government-issued guidelines for the use of AI offers many benefits, including increased investor confidence and faster adoption of AI across subsectors. Finally, having an U.S.-led AI strategy could foster cross-border partnerships and may also be able to influence international fintech standards.
Risks
As with many applications of AI, however, there are potential risks and challenges associated with the crowning of an individual as AI czar. First, there is significant potential for favoritism to shape the role. According to Axios, the AI leader will not require Senate consent. Rather, Elon Musk and Vivek Ramaswamy, who Trump has selected to lead the new Department of Government Efficiency (DOGE), will have input into who is selected for the AI czar role. This raises concerns over potential favoritism and bias. Regardless of who is placed in the potential role or how they are appointed, there are also risks that the use of AI will end up over-regulated and that centralizing control of AI usage could stifle fintech innovation across the globe.
Global impact
U.S. policies created under an AI czar might intensify competition with other countries in the AI-arms race. Specifically, the role may help the U.S. compete with China, which has heavily invested in AI. Creating an AI czar could help the U.S. catch up with China by fostering rapid advancements in AI applications in fintech and related fields. In addition to clarifying regulation around the use of AI, the appointed person could help by coordinating research, funding, and partnerships at a national level. This streamlined approach might also encourage collaboration among U.S. fintech companies, making them more competitive in global markets.
What’s next?
Regardless of what happens (or doesn’t happen) with the AI role, both banks and fintechs should pay close attention while monitoring any U.S. AI policy changes. This applies to both firms that are creating their own AI-driven solutions in-house, as well as to those that leverage AI-driven solutions from third party providers. Everyone is in the AI game– whether they think they are or not– and the decisions made by policymakers will shape the rules of that game.
Photo by Marek Pavlík on Unsplash
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