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Every several weeks, we hear reports of mind-expanding new capabilities from the AI community. With excitement and dread, we try to extrapolate what this will mean for mankind and society: speculating which jobs will disappear, which jobs will appear, and when computers will outreason humans. These topics have become part of our everyday conversation.
Less noticed, but fundamentally important, is a simultaneous number of government announcements of new regulatory actions. The states have over 1,500 bills under consideration. Congress has hundreds, the executive branch has dozens of executive actions, and market participants have a diverse set of views on how the AI industry should be regulated.
I once thought that this AI revolution could be governed by the invisible hand of the market. These nearly 2,000 proposals tell us that is not possible.
While many of these proposed policy changes are thoughtful, needed, and a good step forward, they in totality are not sufficient. The common denominator is that they are all focused on a piece of today’s problem. Not a single proposal is attempting to establish a durable, comprehensive future-focused regulatory framework.
National regulatory bodies have traditionally been established after a crisis. The SEC was established after the crash of 1929 and the Nuclear Regulatory Commission (NRC) was established after the partial meltdown at Three Mile Island.
Let us not wait for a crisis to happen during this AI revolution.
We need policymakers to proactively step forward and establish a national regulatory body with the broad mandate to properly oversee the AI revolution for today’s and tomorrow’s opportunities and problems.
The establishment of a national regulatory body is not a panacea. You could argue that a so-called A.I.R. commission, as AI impacts all areas of society, will have the most dynamic mandate. Regulators tend to over-regulate and continued congressional, executive, judicial and public oversight is critical. The AI revolution is a global race and the balance of an innovation led market with proper regulation is a Herculean task that we must master.
However, I would offer up one aspect of the SEC’s operating model as a partial way forward.
Before joining Nasdaq, I ran an entrepreneurial software company. Speed to market was paramount and we would update our product as rapidly as possible. At Nasdaq, I was shocked to learn that to implement improvements to the core exchange technology, SEC rules mandated that we submit the details of these changes to the SEC, which would in turn publish them for comment and subsequent review. The fact that all your competitors would know exactly what was included in your next release was entirely uncomfortable.
In the fullness of time, the result of this operating method is the fact that U.S. capital markets are the best in the world. The SpaceX IPO was only possible on the U.S. market.
I am positive the public comments received on major changes to an LLM model will dwarf by orders of magnitude the comments received on changes to an exchange order type.
In advocating for a national regulator for AI, I am not sure if I am stating that this is the greater good or the lesser evil, but I do know it is only the beginning. As the AI revolution advances, the regulatory apparatus must also change. The SEC of 2026 is a faint echo of what was created in 1934.
I am certain that any regulatory effort, in the short term, will hinder progress, but in the long term, the proper rules of the road will create conditions for the greater good.
—By Bob Greifeld, managing director and co-founder at Cornerstone Financial Technology, and a CNBC contributor
