This Essay argues that the increasing prevalence and sophistication of artificial intelligence (AI) will push securities regulation toward a more systems-oriented approach. This approach will replace securities law’s emphasis, in areas like manipulation, on forms of enforcement targeted at specific individuals and accompanied by punitive sanctions with a greater focus on ex ante rules designed to shape an ecology of actors and information.
This Essay argues for the development of more robust—and balanced—law that focuses not only on the risks, but also the potential, that AI brings. In turn, it argues that there is a need to develop a framework for laws and policies that incentivize and, at times, mandate transitions to AI-based automation. Automation rights—the right to demand and the duty to deploy AI-based technology when it outperforms human-based action—should become part of the legal landscape. A rational analysis of the costs and benefits of AI deployment would suggest that certain high-stakes circumstances compel automation because of the high costs and risks of not adopting the best available technologies. Inevitably, the rapid advancements in machine learning will mean that law soon must embrace AI; accelerate deployment; and, under certain circumstances, prohibit human intervention as a matter of fairness, welfare, and justice.
