Fed's Bowman says regulators must weigh supervision of new AI tech

Investing.com -- Federal Reserve Vice Chair for Supervision Michelle Bowman said Friday that regulators must consider how to supervise new technology like Anthropic PBC's Mythos as officials address potential risks from artificial intelligence models.

Bowman noted the technology presents both opportunities and challenges for the banking sector. The capability allows firms to identify their own vulnerabilities and improve cyber security, she said. However, if used with malicious intent, it could be deployed to find and exploit weaknesses.

Anthropic has restricted the release of its latest AI model while the company evaluates guardrails for the technology. This has prompted Trump administration officials to consider the possibility of new cyber attacks that could threaten financial stability.

Treasury Secretary Scott Bessent and Fed Chair Jerome Powell met with Wall Street banks last month to discuss risks posed by Mythos and to ensure lenders are taking steps to protect their systems, Bloomberg reported. Bowman said Friday that such meetings are extremely beneficial for protecting the banking system.

Anthropic's Mythos, an AI model that identifies cyber vulnerabilities, shows the dynamic nature of this technology and how quickly its capabilities can develop, Bowman said.

The Fed official stressed that regulators must coordinate across government and engage with banks about emerging technology while supporting the advancement of AI tools. She added that regulators are preparing a report on sound practices for AI adoption and use.

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