Commodity Futures Trading Commission (CFTC) Chairman Michael Selig outlined a potential role for derivatives markets in financing the artificial intelligence (AI) economy, arguing that businesses will need tools to hedge computing costs. At the same time, he said, regulators confront unresolved questions about autonomous trading agents.

Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

Speaking Wednesday (Oct. 28) at the agency’s inaugural Frontier Forum in Washington, Selig linked two emerging challenges: developing markets for contracts tied to computational resources and adapting financial oversight to software that can identify opportunities, hold assets and execute transactions for users.

His remarks offered a direction for regulatory development rather than a specific rulemaking proposal. Selig also cautioned that his views did not necessarily reflect those of the commission.

Selig identified computational power, commonly called “compute,” as a resource that could generate demand for new derivatives markets. Advanced AI systems depend on specialized processors, electricity and data center infrastructure. Rising demand creates exposure to changes in both resource prices and availability.

He compared the potential market with established uses of derivatives, such as farmers hedging crop prices, airlines managing fuel costs and manufacturers protecting against fluctuations in raw materials.

AI developers, infrastructure providers, cybersecurity companies and investors could likewise need financial instruments to manage their exposure to the resources powering AI development and deployment.

“Earlier this year, the CFTC sought public comment on the development of compute derivatives markets,” Selig said.

Source link