The US Commerce Department ordered Kalshi to remove its AI compute futures product last month, citing national security concerns. Sources familiar with the matter indicated that the product, which aggregated data from markets allowing users to bet on the cost of renting Nvidia chips, was taken down by Kalshi, although many underlying markets remain available for trading.
Additionally, the Commerce Department urged the Commodity Futures Trading Commission (CFTC) to freeze the approval of new compute contracts for 60 days. This intervention surprised many in the industry, which has generally seen support from the White House for AI and financial market innovation.
Kalshi did not provide a comment on the situation, while a spokesperson for the Commerce Department stated that the department has never requested Kalshi to remove this or any other market. The CFTC did not respond to a request for comment.
The reasons behind the Commerce Department's concerns regarding the emerging market remain unclear. Some market participants suggested that compute futures could be manipulated to indicate a significant drop in the cost of older chips, potentially destabilizing AI-related stocks and debt markets. The thin trading volume in some of these markets could lead to increased volatility.
The cost of compute has become a critical factor in the US economy, with concerns on one side about the obsolescence of older chips, which serve as collateral for substantial borrowing by companies like CoreWeave, and on the other side, worries from large corporations adopting AI about potential shortages driving prices up.
This uncertainty has contributed to the development of a futures market that was gaining traction over the summer. The CFTC's 60-day pause may delay plans by exchange operators such as CME and Intercontinental Exchange, as well as new entrants like Architect Financial Technologies, to establish two-sided betting markets.