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Chicago Fed study points to AI tail risk for US banks

Authors warn that a risk event could spill across multiple industries

Artificial Intelligence Initiative: European Central Bank

US banks are exposed to notable tail risks from investments in artificial intelligence, according to research from the Federal Reserve Bank of Chicago.

The study, published this month, says that in a tail risk event, stress in one AI-adjacent industry could spill over into many others. 

The authors – Greg Cohen, Cooper Killen and Simon Lau – give the example of software companies coming under stress and being unable to maintain their current levels of spending on infrastructure. This, they say

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