New Delhi, May 11 -- Artificial intelligence is increasingly becoming a double-edged sword for the financial sector. While companies are using AI tools to detect cyber threats and strengthen security systems, regulators are now warning that the same technology could also make it easier for attackers to identify and exploit weaknesses at a much larger scale.

This concern has prompted the Securities and Exchange Board of India (SEBI) to issue a fresh advisory to stock exchanges, brokers, mutual funds, depositories, investment advisers, and other regulated entities over emerging AI-driven vulnerability detection tools such as "Claude Mythos."

In its circular issued recently, SEBI said these advanced AI systems are capable of rapidly scanni...