Computer-driven trading firms fret over risks AI poses to their profits

Financial Times/George Steer and Laurence Fletcher/6-15-2023

“Hedge funds and other computer-driven trading firms are growing increasingly concerned about the threat that artificial intelligence presents to their profits, after a fake image of an explosion near the Pentagon triggered a brief sell-off in US stocks.”

USAGOLD note: An existential threat emerges for algo-based trading systems: Instantaneous reaction to fake news. Hedge funds say they’ve erected defenses but the fake Pentagon image and subsequent instantaneous plunge in stocks proves otherwise.