Does AI Make Us Dependent on Big Tech?

In recent years, the rise of generative AI has ignited a wave of excitement and anxiety across various sectors, particularly in securities and finance. One significant concern is that the adoption of AI could force companies to rely heavily on major cloud service providers, primarily U.S.-based tech giants. This article delves into the fears, the realities, and the potential future of AI adoption in the financial sector, aiming to provide a balanced perspective grounded in facts and figures.

The Growing Dependency on Big Tech

European banking executives are increasingly worried about their dependency on U.S. tech firms for integrated AI services. AI requires substantial computing power, and many banks feel they might struggle to operate AI independently without resorting to cloud services offered by giants like Microsoft, Google, IBM, and Amazon. This concern was a major topic at a recent fintech conference in Amsterdam, where the consensus seemed to be that the banks’ reliance on these tech providers could pose significant risks.

To put things into perspective, consider that AI workloads often require thousands of GPUs to run efficiently. For instance, OpenAI’s GPT-3, a state-of-the-art language model, was trained on 45 terabytes of text data using 175 billion parameters, necessitating an immense computational infrastructure. Most banks lack the resources to build and maintain such infrastructure, hence the inclination towards cloud providers.

The Role of Government Regulation

Recognizing the potential risks, governments are stepping in to regulate the reliance on external tech companies. The U.K., for instance, has proposed new regulations to moderate financial firms’ dependence on major cloud service providers. These regulations are part of broader efforts to safeguard the financial sector from systemic risks. If a single cloud provider experiences an outage or security breach, it could disrupt services across numerous financial institutions, posing a significant threat to financial stability.

The European Union’s securities watchdog also emphasizes that banks and investment firms must not shirk their responsibility when deploying AI technologies. Firms have a legal duty to protect their customers, which extends to the ethical and secure use of AI. The watchdog warns that AI could significantly impact retail investor protections, underscoring the need for regulatory oversight.

Historical Parallels and Lessons

The fears surrounding AI dependency echo the early concerns about cloud computing around 2010. Back then, enterprises were hesitant to adopt cloud services due to worries about vendor lock-in and losing control over their data and systems. However, these fears proved largely unfounded. Public cloud providers have since demonstrated reliability far exceeding traditional enterprise systems, with practices like geographical redundancy becoming standard.

For example, Amazon Web Services (AWS) has an average annual downtime of just 0.08%, compared to 0.20% for traditional data centers. Despite occasional outages, the overall uptime and resilience of cloud services have reassured many enterprises. This historical context suggests that similar fears about AI dependency might be overblown.

The Reality of AI Infrastructure

The assumption that AI requires a dependency on Big Tech is not entirely accurate. While large-scale AI models like GPT-3 do need significant computational resources, many AI applications in banking are more tactical and do not require specialized processors like GPUs. Banks can deploy AI models using existing infrastructure or modest upgrades, rather than relying solely on external providers.

Furthermore, advancements in AI technology are making it more accessible. For instance, edge AI, which allows data processing closer to where it is generated rather than in a centralized cloud, is becoming more feasible. This approach can reduce latency, enhance privacy, and lessen dependency on cloud providers. As AI technology continues to evolve, the range of deployment options will expand, giving banks more flexibility and control.

Economic and Strategic Considerations

From an economic standpoint, the cost of building and maintaining AI infrastructure can be prohibitive for individual banks. A single Nvidia A100 GPU, commonly used for AI training, costs around $10,000. For large-scale AI projects, banks would need hundreds, if not thousands, of these GPUs, along with the necessary supporting infrastructure. Cloud providers offer a more cost-effective solution through economies of scale, allowing banks to access cutting-edge AI technology without the upfront capital investment.

Strategically, working with Big Tech firms can provide banks with additional benefits. These firms invest heavily in AI research and development, and partnering with them allows banks to leverage the latest innovations. Moreover, cloud providers offer robust security measures and compliance certifications, which can help banks meet regulatory requirements and protect customer data.

Navigating the Path Forward

While the concerns about AI dependency on Big Tech are not unfounded, they should be viewed in context. The financial sector has navigated similar challenges before, and there are viable strategies to mitigate the risks. Banks should focus on diversifying their technology vendors, investing in their own AI capabilities, and exploring alternative deployment models like edge AI.

In conclusion, the adoption of AI in the financial sector presents both opportunities and challenges. By taking a balanced approach and learning from past experiences, banks can harness the power of AI without falling into the trap of over-reliance on a few tech giants. The future of AI in finance is promising, but it requires careful planning and strategic decision-making to ensure that it benefits both the industry and its customers.


AI technology offers immense potential for the financial sector, from enhancing customer experiences to improving risk management. However, the path to AI adoption must be navigated carefully to avoid dependency on a few dominant tech providers. By leveraging a mix of internal capabilities and external partnerships, and by staying informed about technological and regulatory developments, banks can harness the benefits of AI while maintaining control over their technological destiny. The road ahead is complex, but with a clear-eyed approach, the financial sector can successfully integrate AI without compromising its independence or security.

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