Financial system exposure to artificial intelligence sector

Subtitle B of the Financial Stability Act of 2010 (12 U.S.C. 5341 et seq.) is amended by adding at the end the following:

157.

Data collection on financial system exposure to artificial intelligence sector

(a)

Artificial intelligence defined

In this section, the term artificial intelligence has the meaning given that term in section 5002 of the National Artificial Intelligence Initiative Act of 2020 (15 U.S.C. 9401).(b)

Data collection

(1)

Reporting on exposure

(A)

In general

Not later than 180 days after the date of enactment, the Director shall order all financial companies to submit data, subject to the limitation under paragraph (2), relating to their exposure to debt and equity instruments connected to companies that support artificial intelligence hardware and physical infrastructure, including chip makers and data centers, hyperscalers and neocloud providers, model originators and developers, and data infrastructure.(B)

Data contents

The data required to be submitted under subparagraph (A) shall include the following:(i)

Reporting of credit exposure

Data relating to credit exposure, including—(I)type of debt instrument;(II)size of the exposure;(III)issuing company or counterparty;(IV)interest rate;(V)term;(VI)collateral pledged; and(VII)additional borrower characteristics, such as—(aa)subsector classification;(bb)annual revenue and net income;(cc)total market capitalization, if applicable; and(dd)total debt and other outstanding liabilities, including those held off-balance sheet.(ii)

Reporting of equity exposure

Data relating to equity exposure, including—(I)type of equity instrument;(II)size of the exposure; and(III)additional company characteristics, such as—(aa)subsector classification;(bb)annual revenue and net income;(cc)total market capitalization, if applicable; and(dd)total debt and other outstanding liabilities, including those held off-balance sheet.(iii)

Other

Any other information the Director determines necessary for evaluating the exposure of the financial companies to debt and equity instruments connected to the artificial intelligence sector.(2)

Limitation

The Director may exempt small financial companies, including banks with less than $10,000,000,000 in assets, and financial companies with less than $500,000,000 of financial exposure to the instruments described in paragraph (1) from the reporting requirements under this section.(c)

Enforcement authority

The Director shall use the authority under section 153(f) to compel data from any financial company that fails to comply with the data collection required under this section.(d)

Report and recommendations

(1)

Report required

Not later than 1 year after the date of enactment of this Act, the Chair of the Financial Stability Oversight Council shall issue and make publicly available a report on the findings of the data collection under this section that evaluates—(A)the size, scope, complexity, and interconnectedness of the financial system's exposure to debt and equity instruments connected to artificial intelligence development;(B)the transmission channels through which a severe decline in value of debt and equity instruments connected to artificial intelligence could threaten the stability of the financial system of the United States; and(C)the extent to which financial companies are indirectly exposed to debt and equity instruments connected to artificial intelligence development through financing arrangements with other financial companies.(2)

Recommendations

The Council shall use the authority under section 120 to issue policy recommendations to member agencies and to Congress to mitigate financial stability risks relating to the financing of artificial intelligence development.(e)

Submission to Congress

Not later than 1 year after the date of enactment of this Act, the Director shall submit to the Chairs and Ranking Members of the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, in unredacted form, the data collected under this section.