AI should mimic FDR's Securities Exchange Act of 1934 model, argues Fortune commentary

The commentary draws a direct parallel between today's largely unregulated AI industry and the financial markets of the 1930s. It recounts how President Franklin D. Roosevelt faced calls from Senator Robert M. La Follette Jr. and Senator Edward Costigan to nationalize the banking system, but instead chose the Securities Exchange Act of 1934. That law created self-regulatory organizations, which the commentary credits with protecting investors while expanding access to investing; the Financial Industry Regulatory Authority, formed in 2007, is the most prominent example. The author contrasts this with Europe's centralized regulation and argues the U.S. approach proved superior.

Applying that history to AI, the commentary rejects both the status quo and a federal takeover, pointing to Sen. Bernie Sanders' June proposal for 50% public ownership as an example of the latter. It says leading AI companies back expanded bureaucracies to shield their dominance. The proposal is for Congress to create a self-regulatory body with legal guardrails against anticompetitive behavior or cartels.

The stakes seem to hinge on whether such an organization could actually enforce shared standards without being captured by its largest members, a risk the commentary acknowledges by calling for guardrails. If the model works, it may give consumers and businesses confidence that AI products meet strong standards. If it fails, the same fears that drove 1930s nationalization calls could return, possibly pushing the U.S. toward the heavy intervention the commentary warns would stifle the technology.