Treasury’s Bessent Backs Trump’s AI Order, Voluntary Cyber Callout
Why It Matters
The debate over voluntary versus mandatory AI safeguards will shape liability, cybersecurity standards, and regulatory exposure for banks and AI firms—affecting financial stability and national-security risk. Clear rules or fiduciary duties could impose compliance costs but reduce systemic and consumer risk.
Summary
Treasury official Bessent endorsed President Biden’s (referred to as “the president”) recent executive order on AI as striking a balance between innovation and safety, while urging a strong fiduciary regime for generative AI agents to address downstream liability and consumer harms. Bessent said Treasury has convened major banks and large language model developers to develop standards, leaning on banks’ robust cybersecurity capabilities as a model for industry. He acknowledged industry concern that a purely voluntary regime could leave the banking system and national security exposed, noting an earlier draft of the order contained stronger, less voluntary measures. Bessent emphasized ongoing engagement with labs and banks to operationalize protections and standards.
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