Key facts
- SEC is examining AI companies' corporate disclosures.
- Agency wants to ensure investors know potential risks.
- AI makes scams easier and cheaper to manufacture.
- Firms must protect retail investors, Woodcock said.
The U.S. Securities and Exchange Commission is scrutinizing corporate disclosures related to artificial intelligence, as investor concerns grow over a potential AI bubble fueled by circular deals, according to enforcement director David Woodcock. Big Tech stocks have recently declined as companies reveal significant cash burn for AI expansion amidst rising interest rates. Woodcock emphasized the SEC's role in ensuring accurate disclosure of material information to investors, stating that enforcement actions will follow inadequate disclosures. He also highlighted AI's role in facilitating scams and urged firms to implement protective measures for retail investors.