Robinhood CEO Says Civil Liability May Not Be Enough To Contain Biggest AI Risks

• ​​Tenev said legal and civil liability might not be enough if AI's risks reach the level of atomic energy.
• “AI has basically unlimited damage and unbounded risk,” Tenev said on the Moonshots podcast.
• “Within a few years,” he told Cramer, “sports will be the minority of prediction markets.”

Robinhood Markets (HOOD) CEO Vlad Tenev said that civil liability may not be enough to keep the biggest risks of artificial intelligence in check.

Tenev was on the Moonshots podcast. The hosts asked about testimony Treasury Secretary Scott Bessent is giving to the House Financial Services Committee. In a clip from the show, Bessent told lawmakers last week that AI labs should not be given 'a blank cheque on liability'.

Liability is “probably okay” for smaller issues, like one company having a cybersecurity breach, Tenev said. “More than the law can handle,” he said, “a bigger disaster.

Others may disagree, he said, noting people compare AI to atomic energy. If AI is at that level of risk, plain legal civil liability is not enough, he said. “"You need some safeguards beyond that," he said.

Tenev Compares AI To Financial Services

Tenev said AI has “basically unbounded risk and unlimited damage.” That is “much, much worse” than what could occur in broking, he said.

He said that financial rules usually follow a crisis, like the crash of 1929. “Nobody wants to regulate a hypothetical?” Tenev said. The idea is to keep any initial harm with AI small and contained, he said.

Tenev said Robinhood has been regulated from the start and is subject to “probably dozens of different regulators.” “The company probably could move faster with less regulation,” he said. But he said scrapping regulation is not “a reasonable solution.”

AI is unpopular in part because most labs are private, Tenev said. “That leaves the average investor with no ‘skin in the game,’” he said. Even before the IPO, Robinhood has been putting pressure on AI companies to open up access to individual investors through Robinhood Ventures, he said.

Prediction Markets Go Beyond Sports

Tenev said in a separate interview on CNBC’s “Mad Money” that prediction markets are spreading beyond sports. “In a few years, sports will actually be in the minority,” he told Cramer.

Crypto is already taking a “disproportionate share” of the newer categories, Tenev said. He noted Robinhood has a market on the CLARITY Act. The bill failed to get 60 votes needed to advance in the Senate on Sept. 15.

Prediction markets are already a growing part of the business. Event contracts contributed $156 million to Robinhood’s revenue in the second quarter, its earnings release showed.

Retail Users See Further Upside For HOOD

HOOD stock closed up over 9% on Friday. On Stocktwits, retail sentiment remained in the ‘bullish’ zone, while chatter stayed at ‘normal’ levels over the past day.

One Stocktwits user said that there was further upside for the HOOD stock. 

HOOD stock has been up over 5% so far this year, and down 0.9% in the last 12 months.

Read also: Jordi Visser’s 20-Year Bombshell Prediction Includes ‘Religion, Gold, And Now Bitcoin’

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