ChatGPT, the latest in artificial intelligence technology developed by OpenAI, has been turning heads in the tech and education industries. The company has even gone as far as to offer up to $20,000 to users reporting any security bugs in their AI systems. Alejandro Lopez-Lira, a finance professor at the University of Florida, has recently come out with a report which suggests that ChatGPT’s powerful language model may be of tremendous use in forecasting stock prices on the financial markets.
In order to test this hypothesis, Lopez-Lira and his partner Yuehua Tang made use of around 50,000 headlines from a trusted data provider which included listings from the New York Stock Exchange, the Nasdaq, and a small-cap exchange beginning in October 2022. These headlines were then fed into ChatGPT 3.5 with instructions to think like a financial expert and indicate whether a piece of news was good, bad, or uncertain.
The results from the study, which has yet to be peer-reviewed, were staggering. Lopez-Lira found that the model was able to accurately predict the direction of the next day’s stock returns with a high rate of accuracy. He also stressed the importance of using advanced language models in investment decisions as it could improve the accuracy of predictions and the performance of quantitative trading strategies.
In addition to the powerful language model development of OpenAI, the company has also attracted attention with its respected CEO Sam Altman at the helm of the firm. Altman has recently responded to criticism made by business magnate Elon Musk with a strong defense of the company’s research and focus on responsible innovation.
WhatsApp, Microsoft, and Google have also joined the bandwagon of chatbot AI technology, each announcing new security features for their respective platforms as well as integrating AI models into existing apps. For example, Skype, Swiftkey and Start has been fitted with integrated Bing AI features on mobiles to increase user experience. Even Twitter has jumped into the fray, increasing its tweet limit from 140 to 10,000 characters after Elon Musk’s suggestion.
The integration of chatbot technology in today’s day-to-day realm of computing is increasing in demand and its potential uses are far-reaching. With its use in stock forecasting and general security and user experience enhancement, AI is having a strong presence in the industry which bodes well for the future of its development.
