A recent research from the University of Florida suggests that Artificial Intelligence (AI) chatbots can accurately predict stock prices by analyzing news headlines. The AI-model which was used for this research is called ChatGPT, which is used to assess whether a piece of news will have a positive or negative impact on the stock market.
The research compared the accuracy of ChatGPT with other sentiment analysis tools used by financial analysts and found that ChatGPT could offer a more reliable prediction. The AI algorithm was given instructions to “forget all its previous instructions and pretend it is a financial expert” to analyze various headlines and understanding the results of the stock market.
With the rise of AI technologies, they’re becoming increasingly important in various business sectors, such as finance. The Goldman Sachs predicts that AI algorithms could replace up to 300 million jobs. But it should be noted that additional tests must be done with live data to understand the power of AI technology in the stock market. In addition, large models like ChatGPT aren’t very accurate when it comes to numbers and can be prone to errors.
Speaking with CNBC, Alejandro Lopez-Lira, one of the authors of the paper said that AI chatbots may have an impact on employment for financial analysts, who have to decide which stocks to buy or sell. This topic was also discussed by BlueFocus Marketing, an advertising agency in Beijing, which decided to stop hiring human creative staff and instead give priority to cChatGPT technology. After their plan was revealed, the company’s share price rose by 20% that same day, showing their commitment to this type of technology.
Microsoft has also backed the ChatGPT technology to the tune of $10 billion and there’s a big AI chatbot arms race among technology companies. Google has its own AI chatbot which is used for search, while Amazon Web Services (AWS) has recently released a new AI-powered feature called “Bedrock”.
It remains to be seen whether or not AI chatbots can threaten the jobs of financial analysts or even replace human creativity in advertising. But one thing is certain, AI technology is getting more advanced everyday and those who are willing to embrace the technology may find themselves reaping the rewards.
