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2025 U. Chi. L. Rev. Online 1 (2025)

handle is hein.journals/uchidial2025 and id is 1 raw text is: 01/14/25 U. Chi. L. Rev. Online *1 How Artificial Intelligence Will Shape Securities Regulation Gabriel V. Rauterberg* Introduction How will the increasing prevalence and sophistication of artificial intelligence (AI) change the doctrine and practice of securities law? My main thesis is that it will push securities regulation toward a more systems-oriented approach. This approach will replace securities law's emphasis, in areas like manipulation, on forms of enforcement targeted at specific individuals and accompanied by punitive sanctions with a greater focus on ex ante rules designed to shape an ecology of actors and information. I will motivate and illustrate this argument through two main areas of securities law: trading and content moderation. The former is clearly a core area of Securities and Exchange Commission (SEC) activity. The SEC closely supervises the national stock exchanges that compose the basic trading architecture for equity securities and is the principal regulator of the participants in those markets. The latter may seem like a rather odd characterization of the SEC's role. But the SEC is and always has been in the content moderation business. Indeed, from its early years onward, one of the SEC's core ambitions has been to tightly regulate the dissemination of information by public companies by mandating what they must say, proscribing much that they may not say, and closely regulating any other information disclosed by public issuers or their representatives. I close by noting two more speculative possibilities for how AI could shape securities regulation. One is that AI will make securities law less important. Securities regulators have built a bright lamppost * Professor of Law, University of Michigan. My views on these subjects owe much to my collaborators, especially Michael Barr, Megan Shearer, and Michael Wellman, with whom I have been studying the behavior of algorithmic traders in financial markets, and Howell Jackson, with whom I have been presenting on social media and capital markets at PIFS-IOSCO's trainings for securities regulators. All errors are my own. Thanks to the participants at the University of Chicago's Symposium on How Al Will Change the Law for helpful comments, and to the editors of the University of Chicago Law Review for their helpful insights.

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