AI as financial infrastructure?

From an ‘infrastructural gaze,’ this chapter examines the penetration of artificial intelligence in capital markets as a blend of continuity and change in finance. The growing infrastructural dimension of AI stems firstly from the evolution of algorithmic trading and governance, and secondly from its rise as a ‘general-purpose technology’ within the financial domain. The text discusses the consequences of this ‘infrastructuralisation’ of financial AI, considering the micro-macro tension typical of capital accumulation and crisis dynamics. Challenging the commonly held notion of AI as a stabilising force, the analysis underscores its connections with volatile, crisis-prone financialised dynamics. It concludes by outlining potential consequences (unpredictability, operational inefficiency, complexity, further concentration) and (systemic) risks arising from the emergence of AI as a ‘new’ financial infrastructure, particularly those related to biases in data and data commodification, lack of transparency in underlying models, algorithmic collusion, and network effects. The text asserts that a thorough understanding of these hazards can be achieved by adopting a perspective that considers the macro-meso-micro connections inherent in infrastructures.