Tag Archives: AI

RBI Governor Warns of ‘Systemic Risks’ from AI in Banking Sector

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The increasing use of artificial intelligence (AI) and machine learning (ML) in the global financial sector could pose significant risks to financial stability if not properly managed, according to Shaktikanta Das, the Governor of the Reserve Bank of India (RBI). Speaking at an event in New Delhi on Monday, Das emphasized the need for banks to adopt strong risk mitigation practices as they integrate AI into their operations.

Das highlighted that the financial sector’s growing reliance on AI could lead to concentration risks, particularly if a few technology providers dominate the market. “The heavy dependence on AI by financial institutions can amplify systemic risks. Failures or disruptions in these AI systems could ripple through the entire financial sector,” he cautioned.

In India, banks and financial service providers are increasingly using AI to enhance customer experience, reduce operational costs, manage risks, and boost growth through applications like chatbots and personalized banking services. However, this growing reliance on AI also introduces new vulnerabilities, including a heightened risk of cyberattacks and data breaches.

Das pointed out another key concern—the “opacity” of AI algorithms. The complexity and lack of transparency in AI systems make it difficult to audit or interpret the decision-making processes behind lending and other financial services. This could lead to unpredictable market outcomes, with potentially severe consequences.

In addition to AI-related risks, Das also raised concerns about the rapid expansion of private credit markets globally. These markets, he noted, are lightly regulated and have not undergone stress testing during a significant economic downturn. The unchecked growth of private credit could pose further risks to financial stability.

As the adoption of AI continues to reshape the financial landscape, Das urged banks and regulators to stay vigilant and ensure that adequate safeguards are in place to prevent systemic disruptions.

AMD Poised to Launch New AI Chips, Intensifies Market Rivalry With Nvidia

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In a strategic move that underscores the intensifying competition in the artificial intelligence (AI) chip sector, Advanced Micro Devices (AMD) is set to unveil a new lineup of AI processors during an upcoming data center event in San Francisco. This announcement aims to strengthen AMD’s position as a formidable supplier of AI chips in a market that has been predominantly led by Nvidia. The event, scheduled for Thursday, is anticipated to feature details on AMD’s MI325X chip and the next-generation MI350 chip.

The MI350 series is designed to directly compete with Nvidia’s Blackwell architecture, promising enhanced computing power and memory capabilities. This development marks a significant effort by AMD to disrupt Nvidia’s market dominance in the AI chip landscape. AMD first introduced these chips at the Computex trade show in Taiwan in June, with plans for a release in the latter half of this year and into next year.

In addition to the AI chips, AMD is expected to unveil new server central processing units (CPUs) and PC chips that incorporate enhanced AI computing capabilities. This initiative illustrates AMD’s dedication to advancing AI technology and responding to the increasing demand for AI-driven solutions across various sectors.

AMD’s current MI300X AI chip, launched late last year, has experienced a swift uptick in production to meet growing market needs. In July, the company raised its AI chip revenue forecast for the year to $4.5 billion, up from a previous estimate of $4 billion, driven by substantial demand for the MI300X, especially in the realm of generative AI product development.

Market Competition

Despite AMD’s aggressive strategy, analysts suggest that its new product launches are unlikely to significantly impact Nvidia’s data center revenue, given that the demand for AI chips far outstrips supply. AMD is projected to report data center revenue of $12.83 billion this year, according to LSEG estimates, while Nvidia is expected to achieve a staggering $110.36 billion in the same segment. Data center revenue serves as a critical indicator of the demand for AI chips essential for developing and running AI applications.

The competitive landscape for AI chips has been evolving rapidly. Intel, another key player, recently announced its next-generation AI data center chips, the Gaudi 3 accelerator kit, which is priced around $125,000—substantially cheaper than Nvidia’s comparable HGX server system. Meanwhile, Nvidia continues to innovate with its next-generation AI platform, the Rubin platform, slated for release in 2026. This platform will succeed the Blackwell architecture, which has been highly sought after and is expected to remain sold out well into 2025 due to robust demand.

AMD’s Move Toward AI

AMD’s CEO, Lisa Su, has expressed a clear vision for the company’s future, emphasizing that AMD is not seeking to be a niche player in the AI chip market. This statement reflects the company’s ambition to solidify its presence as a major contender alongside established leaders like Nvidia and Intel.

As the AI chip market becomes increasingly competitive, AMD’s upcoming announcement is likely to further fuel this rivalry. With AI technology continuing to evolve and the demand for AI-powered solutions expanding, the market is poised for more innovations and strategic initiatives from industry giants. This dynamic landscape highlights the relentless pursuit of technological advancement in the AI chip arena.

Emotional AI and gen Z: The attitude towards new technology and its concerns

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Artificial intelligence (AI) governs all that come under “smart technology” today. From self-driving cars to voice assistants on our smartphones, AI has ubiquitous presence in our daily lives. Yet, it had been lacking a crucial feature: the ability to engage human emotions.

The scenario is quickly changing, however. Algorithms that can sense human emotions and interact with them are quickly becoming mainstream as they come embedded in existing systems. Known as “emotional AI,” the new technology achieves this feat through a process called “non-conscious data collection”(NCDC), in which the algorithm collects data on the user’s heart and respiration rate, voice tones, micro-facial expressions, gestures, etc. to analyze their moods and personalize its response accordingly.

However, the unregulated nature of this technology has raised many ethical and privacy concerns. In particular, it is important to know the attitude of the current largest demographic towards NCDC, namely Generation Z (Gen Z). Making up 36% of the global workforce, Gen Z is likely to be the most vulnerable to emotional AI. Moreover, AI algorithms are rarely calibrated for socio-cultural differences, making their implementation all the more concerning.

“We found that being male and having high income were both correlated with having positive attitudes towards accepting NCDC. In addition, business majors were more likely to be more tolerant towards NCDC,” highlights Prof. Ghotbi. Cultural factors, such as region and religion, were also found to have an impact, with people from Southeast Asia, Muslims, and Christians reporting concern over NCDC.

Research by Team:

“Our study clearly demonstrates that sociocultural factors deeply impact the acceptance of new technology. This means that theories based on the traditional technology acceptance model by Davis, which does not account for these factors, need to be modified,” explains Prof. Mantello.

The study addressed this issue by proposing a “mind-sponge” model-based approach that accounts for socio-cultural factors in assessing the acceptance of AI technology. Additionally, it also suggested a thorough understanding of the potential risks of the technology to enable effective governance and ethical design. “Public outreach initiatives are needed to sensitize the population about the ethical implications of NCDC. These initiatives need to consider the demographic and cultural differences to be successful,” says Dr. Nguyen.

Overall, the study highlights the extent to which emotional AI and NCDC technologies are already present in our lives and the privacy trade-offs they imply for the younger generation. Thus, there is an urgent need to make sure that these technologies serve both individuals and societies well.

AI to help India recruiters to eliminate bias, pace up process

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As artificial intelligence (AI) is entering all office systems, nearly 50 per cent of recruiters believe that it will become a regular part of their hiring process in the coming years, said a report by chat-based direct hiring platform Hirect.

A whopping 96.5 per cent of recruiters at Indian startups and small and medium enterprises (SMEs) in India believe that the use of AI will improve the recruitment process and eliminate bias from the hiring process, said the report released on Tuesday.

And 52 per cent of the recruiters said building a diverse workforce is necessary to address the huge disparity in the representation of women in leadership roles, 97.4 per cent of them believe that skill-based hiring is the future and necessary and 87 per cent of recruiters are “in favour of retaining old employees instead of hiring new ones.”

“In the employee-driven market, the employers must quickly adapt to the current reality of talent acquisition to remain competitive in today’s labour market,” said Raj Das, Global Co-founder and CEO of Hirect India.

The startups often rely on referrals and that is why startups formulate referral policies and around 88.2 per cent of recruiters believe that referral is the best way to hire people with the right talents, added the report.