Preparing For A Greater AI Presence In The Securities Industry
Some reports suggest that ChatGPT is better at selecting stocks than some of the most popular investment funds in the U.K. According to a study at the University of Florida — "Can ChatGPT Forecast Stock Price Movements? Return Predictability and Large Language Models" — ChatGPT is also better at predicting how stocks will react to news headlines than traditional models.
Several well-known investment firms have publicized their efforts to incorporate AI into their business models. For example, JPMorgan Chase & Co. is developing a software service called IndexGPT that uses artificial intelligence to analyze and select securities for customers. Morgan Stanley Wealth Management has also recently partnered with OpenAI to access, process and synthesize contents for financial advisers.
When it comes to financial firms incorporating AI into their securities-related businesses, these developments are just the tip of the iceberg. However, with great potential, AI also brings significant risks.
To continue reading Greg Baker and Kaiying Wang's article in Law360, please click here.