AI could find hidden flaws in digital markets adversaries could exploit to wreak economic havoc, DARPA wants

A new kind of market defense

DARPA, the Pentagon’s research arm, is looking for AI tools that can uncover flaws in rules governing digital markets and help correct them. The agency says these systems have grown faster and more efficient, while their connections to one another have created additional avenues for disruption.

The concern is not primarily hacking or data theft, which are longstanding threats. Instead, DARPA is focused on adversaries exploiting weaknesses in how markets are designed.

Lessons from past disruptions

The agency said the episode showed that manipulation of market mechanisms could affect military readiness. It also cited the 2010 flash crash, when US stocks plunged within minutes amid market instability.

Finding failures before they happen

Investigators later linked the flash crash in part to one individual’s manipulative trading practices, among other problems. DARPA said some market gaps have since been corrected, and described sell orders designed to exploit a market quirk without being executed.

The agency’s IMR program aims to use AI to model markets, examine protections and identify possible weak points. It wants large language models to turn regulatory filings and technical specifications into computer models of market operations and interactions.

If a model cannot prove that a market meets a resilience standard, DARPA wants it to produce a specific example of how the market could fail. That could help users locate weaknesses and develop fixes.

Broader security concerns

Matthew Wilding, the IMR program manager at DARPA, said AI and automated reasoning offer new ways to defend systems, while also being usable for attacks. He said the program’s focus is finding counterexamples and improvements to market designs. The solicitation reflects concerns that future attacks on the United States could target digital infrastructure, supply chains or markets rather than take the form of conventional military action.