Hedge Fund Two Sigma Skeptical of ChatGPT Hype

Two Sigma, a New York-based hedge fund, is not convinced by the hype surrounding Large Language Models (LLMs) or AI-powered bots. The firm’s ex-Goldman partner, Marty Chavez, and David Siegel, Vice Chairman of Two Sigma, argue that despite the transformative nature of LLMs, their impact is not as new as people believe. In a recent panel discussion, Siegel noted that AI had been making an impact for decades. LLMs, while impressive, should not lead people to read too much into them, he said. It’s similar to the phenomenon of Eliza, a chat program that has been around since the 1970s, which was lauded at the time despite being made up of only a few hundred lines of code. Chavez added that despite how impressive LLMs may seem, they will not be able to predict the stock market. This is because their strengths lie in analyzing stable datasets, like the concept of a cat, as the stock market is anything but stable.