ChatGPT's portfolio outperformed random ones, with managers saying the AI is a co-pilot' not a 'prophet'
Per Business Insider
OpenAI's ChatGPT has created a "sufficiently diversified" portfolio and outperformed other random portfolios. With that, portfolio managers say the AI tool can be a "co-pilot" for investors instead of a "prophet."
A South Korean academic paper attempted to see if ChatGPT could perform effectively in portfolio management assistance. Hyungjin Ko and Jaewook Lee from Seoul National University found that although it couldn't create optimized portfolios like humans, it was a convenient option for those not knowledgeable in asset management.
"ChatGPT is not a 'prophet' of the financial industry but rather an 'assistant' or 'co-pilot' to investors and portfolio managers... "When used appropriately within a set framework, ChatGPT has the potential to revolutionize asset allocation practices."
The test was run 10,000 times and was compared to other randomly selected portfolios. To carry out the test, ChatGPT was made to create a portfolio out of a 40-asset selection.
Here are some of the assets that were included in the portfolio
- large-cap US stocks
- cryptocurrency
- currencies
- commodities
- bonds
"ChatGPT can identify abstract relationships between assets, particularly in terms of their dissimilarity with respect to the asset class,"
Researchers pointed out that OpenAI's ChatGPT still gave off wrong answers sometimes and that it shouldn't be used as a "market predictor."
Elon Musk and others have recently called for a pause in AI research. They noted in a letter that they are seeking a pause in training for at least six months for AI systems that were "more powerful than GPT-4."
It was noted that should the pause not be enacted, governments should step in.
Recently, Google has partnered with Reptil to create an AI-powered GitHub competitor potentially. This comes as part of their goal to achieve 1 billion software creators through the use of this technology, with Google trying to compete with Microsoft and OpenAI on the coding front.
See flow at unusualwhales.com/flow.
Other News:
- Elon Musk and others call for a pause in AI research
- Google partners with Replit to potentially create an AI-powered GitHub competitor
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