Enron Short-Seper Jim Chanos: Financial fraud “ will get worse ” in the middle of Ai Boom

About five years later, while the Boom Ai Balons than the Dotcom bubble almost 30 years ago, “we could go to the diamond or platinum” of fraud, he said.

Chantos – which was part of his fortune as a short seller of Enron, an energy company studied by Fortune For its generalized fraud practices – judged that, while the AI ​​bubble continues to inflate, financial fraud is required to support the success of the sector.

“I did not spend much time on the technical side of the fraud led by AI – like deep buttocks and similar tools – but it is quite clear that it will get worse,” said Chantos in an interview this week with the Institute of Non -Lucrative Reflection for a new economic thought.

“Regarding financial fraud specifically, there is no doubt that we see more, in particular on the wave of the Boom of the current AI market focused on AI,” he added.

The S&P 500 is up 10% over a year, with most of its growth due to the magnificent 7. The spending of the technology giants on the AI ​​and its infrastructure was so massive that it added 0.5% to the growth of American GDP, according to Pantheon Economics.

But in a context of increased concern for an AI bubble, investors’ confidence in the sustainability of growth fueled by AI is wavering. A MIT report published last week revealed that because of the precipitation to integrate AI into the workplace, only about 5% of AI pilot programs have generated immediate income. For the remaining 95% of the projects, the implementation failed.

And earlier this week, Nvidia said $ 46.7 billion in revenue in the second quarter, with an increase in sales of 56% from one year to the next, exceeding expectations, but shares have dropped on a cancellation of income center income, marking a potential change in atmosphere in the optimism of investors.

First signs of fraud in the AIA

The framework of prediction of the rise of fraud is that it is precipitated by periods of mass financial growth. The AI ​​boom is no exception.

“It is one of my longtime opinions that the fraud cycle is still following the financial cycle with a gap. And we certainly see it now,” said Chantos. “I think we will see even more, because companies do everything they can to protect themselves from without distrust investors by saying that they are AI companies or by praising a breakthrough of great technology which seems exciting but which is not true.”

Industry cracks have already started to emerge. In April, the United States Ministry of Justice accused the technological startup of Shopping Nate of saying that investors helped AI Aid for buyers in the payment process, while in reality, they are human workers from the Philippines and Romania managing transactions. The former CEO of Nate, Albert Saniger, faces a transfer chief in securities and a chief of fraud by wire. Nate did not immediately respond to FortuneComment request.

A meticulous examination on the alleged false promises of AI also coincide with the technology used for scams and cybersecurity violations. Tianyi Zhang, Director General of Risk Management and Cybersecurity at Ant International, based in Singapore, said Fortune Earlier this month, “in some markets, we found that more than 70% of new registrations (customers and financial institutions) can be deep attempts. We have identified more than 150 types of Deepfake attacks. ”

Chanos previously said that fraud was exacerbated by Lax regulations, but asked whether financial institutions and AI should be regulated by third parties or the free market.

“There is no doubt that this financial cycle has probably exceeded the Dotcom era in terms of enthusiasm, assessments and activity of capital markets,” said Chanos this week. “So now we just have to see how it goes.”