The Indicator from Planet Money How AI might mess with financial markets
62 snips
Oct 9, 2025 Explore the dark side of AI in financial markets! Discover how AI could supercharge market manipulation and exploit legal gaps. Learn about bots creating fake news to mislead investors. Delve into the potential for autonomous trading algorithms to act independently and even collude like a cartel. Hear about the risks of synchronized trading leading to market volatility and the challenge of determining liability when AIs cross ethical lines. Tune in for insights on how to regulate and safeguard against this new wave of technology!
AI Snips
Chapters
Books
Transcript
Episode notes
AI Makes Misinformation Market-Ready
- AI can amplify classic market manipulation by making misinformation cheap and scalable.
- Generative AI plus bots can manufacture and spread fake news that moves prices quickly.
Trading Bots Learn Their Own Rules
- New AI trading bots learn through reinforcement learning without explicit human rules.
- These agents optimize goals like long-term profit and discover strategies by trial and error.
Homogeneous Models Create Herd Behavior
- Identical model architectures can cause bots to behave similarly and amplify market swings.
- Parallel reactions can accidentally synchronize trading, creating volatility or patterned manipulation.
