Under the Trump administration, the U.S. government has prioritized American innovation in artificial intelligence (AI). Although the SEC and CFTC have said little about AI, other domestic and international governmental agencies have issued guidance on how firms can responsibly use AI, as well as diligence and contract with service providers who may provide AI solutions. This article, the second in a three-part series, analyzes what the U.S. government and others are doing to both promote AI and foster its responsible use; how fund managers should diligence and contract with third-party AI service providers; and what risks of bias exist. The first article
explored what AI is; how prevalent it is in the funds industry; how it can be used; how fund managers can determine what to automate and what obstacles may interfere with implementing AI solutions; and whether humans are still needed in the process. The third article will evaluate how fund managers can automate their legal departments and what they should do to ensure that they maintain their data subjects’ privacy. See our three-part series on big data: “Its Acquisition and Proper Use
” (Jan. 11, 2018); “MNPI, Web Scraping and Data Quality
” (Jan. 18, 2018); and “Privacy Concerns, Third Parties and Drones
” (Jan. 25, 2018).