Risk obviously plays a big role in stock market returns, so financial firms have spent a lot of time and money using specialized, older forms of machine learning to try to identify the uncertainties associated with various corporations. ChatGPT, without any specialized stock market knowledge, tended to outperform these more specialized models, working as a “powerful predictor of future stock price volatility.” In fact, it was the ability of the AI to apply more generalized knowledge of the world that made it such a good analyst, since it could put the risks discussed in conference calls into a
...more
