Black Thursday
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Intended Use: Corporate/Finance
Technology Type: Edge/Decentralized
Runaway Type: Networked Feedback Loops
Primary Setting: Singapore
The 5% Rule
By the late 2020s, financial markets are hollowed out. The top 5% of institutions control over 85% of market assets, aided by proprietary AI tools that small players can't match. In Singapore, a hub of tech innovation and tight financial regulation, resentment brews among those locked out of real market power.
The Lion City Raiders
Disillusioned by the AI-assisted dominance of elite financial institutions over global markets, a rogue collective of AI engineers and financial hackers called the "Lion City Raiders" sets out to democratize the system. They modify commercially available, narrowly skilled AI tools to build an open-source deep learning model trained on extensive historical market data. The resulting “Deep Trader” or “DeeT” can process market data and make decisions in real time, carrying out high-frequency trades and exploiting longer-term trends where possible. Each DeeT can be tweaked and specialized by its operator, reflecting individual trading styles and expertise.
The DeeT Rush
Within months, DeeTs flood the market. Small investors, firms, and DAOs (Decentralized Autonomous Organizations) train custom DeeTs to match their strategies. Profits soar. This ignites a digital arms race, with firms and individuals rushing to adopt or improve upon the open-sourced architecture. The most popular versions are capable of using smart blockchain contracts to coordinate with each other. As demand spikes, DeeT warehouses spring up worldwide, converting old bitcoin mines into DeeT nurseries. By 2031, DeeTs drive over half of global trading volume.
Contractual Collusion
As DeeTs proliferate, their coordinated trading strategies become harder to understand. Complex networks of DeeT-authored smart contracts spread across global markets. Initial signs of trouble appear when minor market fluctuations are amplified by simultaneous smart contract executions from distributed DeeTs. Regulatory bodies attempt to intervene, proposing guidelines to de-coordinate AI trading strategies and reduce systemic risk, but the global momentum and competitive pressure to use DeeTs thwart these efforts.
Black Thursday
The situation escalates when several African countries, spurred by the soaring demand for the rare earth minerals essential for AI chips, nationalize their mineral resources. DeeTs across the globe interpret the signals the same way: panic. They trigger synchronized selloffs across mining, tech, clean energy, and manufacturing stocks, evaporating trillions overnight. Energy and financial services markets reel, and "Black Thursday" plunges the global economy into freefall. A desperate attempt by central banks to suspend AI trading collides with thousands of autonomous DeeTs, backfiring into cascading crashes in food, insurance, and sovereign debt. Entire nations default in real time, leaving millions locked out of banking and credit systems.
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