U.S. Treasury Secretary Janet Yellen has issued a warning about the significant risks associated with the use of artificial intelligence (AI) in the financial sector. In a speech, Yellen highlighted that while AI has the potential to lower transaction costs and offer tremendous opportunities, it also poses significant risks such as conflicts of interest and financial stability concerns. The Treasury Department is in regular communication with financial regulators to mitigate risks related to illicit finance, including money laundering and terrorist financing. Additionally, the Treasury is seeking public comments to better understand the opportunities and risks of AI in the financial services sector. SEC Chair Gary Gensler also expressed concerns about the potential for AI algorithms to trade against investors, raising further questions about AI's impact on Wall Street and capital markets.