Kansas City Fed President Says Fed Should Grasp 'Too Big to Fail' Risks in AI Ecosystem
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Kansas City Federal Reserve President Schmid said on the 25th that it is important for the Federal Reserve to determine whether the network of companies and contracts forming in the industry amid the artificial intelligence boom is developing into a "too big to fail" problem. Schmid said, "To truly comprehensively understand what is happening around the construction of AI and data centers, the first thing we must consider is whether we are shifting toward a 'too big to fail' AI ecosystem." This remark referred to the situation during the 2007-09 financial crisis, when major financial institutions required public bailouts because of their size and influence on the real economy. He then raised the question of whether systemic risk exists.