Some fear automated stock trading done by computers will fall victim to fake images generated with artificial intelligence (AI). But experts say algorithmic trading could actually be the key to market stability.
On one Monday morning in May, US financial markets took a sudden dip. A photo of an explosion at the Pentagon near Washington D.C. was spreading on social media and spilling over onto popular investing websites.
Was it an attack? Investors seemed to think so. Stocks tend to perform poorly in the early stages of international conflict. The S&P 500 declined by 0.3% — equal to around $500 billion ( €463 billion) — and safe havens like gold and treasury bonds started to climb.
But within a couple of hours, everything had returned to normal. The image was fake, it turned out, likely generated by artificial intelligence (AI), experts said.
But that flash of investor panic raises questions about what AI means for market stability, with fake images becoming ever more realistic — and ever easier to make.
