It is ‘nearly unavoidable’ that AI will cause a financial crash within a decade, SEC head says::undefined

  • RickRussell_CA@lemmy.world
    link
    fedilink
    English
    arrow-up
    1
    ·
    8 months ago

    Right, my point is that relying on pricing algorithms when faced with novel “black swan” conditions nearly drove major used car dealers out of business. Obviously, the algorithm didn’t cause the novel conditions, but neither did they buffer the effects. Instead, they accelerated the financial effects.

    If you go back and read about Carvana before the pandemic, their big selling point to investors was that their algorithms were “smarter” than the competition and would realize more consistent profits for the company and their investors. When it became clear that these “smart” algorithms went insane, investors abandoned the company and their valuation dropped from $60 billion to $7.5 billion between 2021 and 2023. Carvana has narrowly avoided bankruptcy.