As artificial intelligence (AI) gains increasing attention in the wealth and banking sector, regulation framework talks continued on Thursday at the UK government’s AI Safety Summit at Bletchley Park, with the signing of an international declaration, as well as a multilateral agreement.
UK Prime Minister Rishi Sunak on Thursday said that the
UK-led AI Safety Summit had reached a “landmark agreement”
with like-minded companies and governments on safety
testing of new models. The agreement is meant to see
independent testers checking the safety of new AI models
instead of the companies themselves.
The event, which brought together nations from around the world
to discuss the opportunities and risks posed by AI and how those
risks could be mitigated, also resulted in the “Bletchley
Declaration” between 28 participating countries.
The declaration recognised the need to address risks represented
by AI development. So-called frontier AI development has raised
concerns over its potential impact on large scale
governance, from employment and elections to national
security and international relations. OpenAI,
Anthropic, Microsoft, Meta and Google were among companies
participating, as well as Elon Musk, the ChatGPT boss, US vice
president Kamala Harris, EU Commission president Ursula von der
Leyen, and Wu Zhaohui, Chinese vice minister of science and
tech. Representatives from Australia, Brazil, Korea, India,
Singapore, Switzerland, theUAE, Japan, Canada, also attended,
amongst others.
China signed the declaration, saying: “We welcome the
international community’s efforts so far to cooperate on AI to
promote inclusive economic growth, sustainable development and
innovation, to protect human rights and fundamental freedoms, and
to foster public trust in AI systems, to fully realise their
potential.”
On the second day of the event, the United Nations supported an
expert AI panel along the lines of the Intergovernmental Panel on
Climate Change. France will host another AI safety summit in
2024.
Meanwhile, the EU is moving closer to passing an AI act. US
President Joe Biden also recently signed a new AI executive order
that directs new government-wide federal standards and policies
for the responsible development and use of this emerging
technology. The order will require AI system makers to share
model training and safety testing results before public releases,
strengthen user and data privacy practices, prevent
discrimination, and identify a common framework for how US
Federal agencies adopt and procure commercial AI systems. See
more here.
UBS
Global Wealth Management believes that regulations remain
limited in enforcement, with major governments in their view
primarily relying on incentives instead of enforcement. “By
contrast, the more stringent AI chip export controls
and sanctions the US announced last month were more material
and enforceable, and so the market impact was more
significant,” UBS said in a note.
“We think establishing consensus rules of the road now,
while adoption and capabilities are still at an early stage,
would be a better outcome than a late-stage
intervention that might risk undercutting investments and
harming the sector,” UBS continued. “Recent tech results
confirmed robust AI infrastructure spending ahead, and
support our expectation for a sharp recovery in revenue next
year,” UBS added.
With AI demand broadening, UBS believes that mid-cycle
segments such as software and the internet offer the best
risk-reward within global tech. Given recent
selling pressure on the sector, UBS thinks that investors
considering adding exposure can look to beaten-down AI
beneficiaries, such as global semiconductor stocks.
Benefits of AI range from automating repetitive tasks, providing
data-driven advice in specific areas such as portfolio
optimisation, risk management and tax analysis.
Annabelle Bryde, managing director and head of UK Private Bank
and Crown Dependencies at Barclays Private Banks, believes that
AI will play an important role in wealth management,
complementing the banker’s role, rather than replacing it. She
thinks human-driven advice from wealth managers is here to
stay. She also believes that AI must be regulated, and
this should start sooner rather than later. See more here.
