SEC Enforcement Chief Says Agency Monitoring AI Disclosures Amid Bubble Concerns

The U.S. Securities and Exchange Commission is examining artificial intelligence companies' corporate disclosures as investor worries mount over a potential AI bubble that may have been fueled by circular deals, the agency's enforcement director told Reuters on Friday. David Woodcock, who became SEC enforcement director in May, said the agency does not want to stand in the way of tech innovation but must ensure issuers give investors the full picture on potential risks. "Our principal concern is that people are making accurate disclosures about material information so that investors know what they're getting into," he said, adding that "enforcement will be present" where such disclosure does not happen. Big Tech stocks sold off this week as companies disclosed they are burning through cash to fuel AI expansion while interest rates rise. Woodcock also said AI and superintelligence have made scams cheaper to manufacture at scale, and that brokers and other firms need processes in place to protect retail investors.