By Chris Prentice
NEW YORK, Oct 30(Reuters) - The US Securities and Exchange Commission is examining artificial intelligence companies' corporate disclosures as investor worries mount over a potential AI bubble that may have been fueled by circular deals, the agency's enforcement director told Reuters on Friday.
Big Tech stocks sold off this week as companies disclosed they are burning through cash to fuel their AI expansion at a time when interest rates are rising, raising questions about the sustainability of AI spending.
David Woodcock, who became SEC enforcement director in May, said the agency does not want to stand in the way of tech innovation, but that it is the agency's job to ensure issuers are giving investors the full picture on potential risks.
"Our principal concern is that people are making accurate disclosures about material information so that investors know what they're getting into," Woodcock said in an interview. "Enforcement is a very necessary piece of making sure people are doing that."
Where such disclosure does not happen, "then enforcement will be present," he said.
Woodcock also said that AI and superintelligence have made scams much easier and cheaper to manufacture at scale, raising risks for more and more people. Brokers and other firms need to have processes in place to protect retail investors and "take thoughtful action," he said.
(Reporting by Chris Prentice in New York; editing by Michelle Price)