This paper, created in partnership with the Global Risk Institute, offers one of the first integrated assessments of how artificial intelligence and the physical infrastructure behind it are reshaping risk for Canadian financial institutions.
Author Christopher Collins of the Cascade Institute maps three interconnected layers:
- Operational risks from deepening dependency on AI systems and a handful of American-owned cloud providers;
- Investment risks from concentrated exposure to AI-driven markets and the energy and water constraints that could cap AI’s growth;
- Downstream risks from AI’s second- and third-order effects on the economy, society, and geopolitics.
The central message: managing AI risk is now a strategic imperative, and institutions that rapidly build the governance and monitoring capabilities it requires will be far better positioned than those that wait.
