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Artificial intelligence (AI) is everywhere. And then there is ‘artificial’ intelligence. One promises to push the world into a new, and potentially more prosperous, future. The other has the potential to permanently damage the future of many.
Artificial intelligence (AI) is everywhere. And then there is ‘artificial’ intelligence. One promises to push the world into a new, and potentially more prosperous, future. The other has the potential to permanently damage the future of many.
Let’s talk about AI first. I confess the technology behind the end products like ChatGPT and Google Bard is hard to decipher. Though I don’t get most of it, I get the general idea. Feed millions of computers, billions of words, and then using “tech" to train the AI tool to learn, on its own, various skills.
Let’s talk about AI first. I confess the technology behind the end products like ChatGPT and Google Bard is hard to decipher. Though I don’t get most of it, I get the general idea. Feed millions of computers, billions of words, and then using “tech" to train the AI tool to learn, on its own, various skills.
So, for instance, ChatGPT 4.0 has gulped down 400 billion words. All this information comes from the internet and other proprietary sources. The AI tool, once trained, is ready for everything you have to throw at it – it will even throw up stock recommendations if you ask of it! It will practically answer everything you need to know. And now, even create amazing and eclectic pictures for you, among other things.
Sometimes, the AI tool is so excited to serve you that it even “hallucinates" i.e. it makes up stuff just so that it can answer your question. But all said and done, this whole process is revolutionary. The AI tools sit on the accumulated knowledge that exists in the world today. This is key.
Of course, there are specialised AI tools too. For instance, you could train an AI tool on everything Warren Buffett has said…and it will answer you as if it were him! Someone actually built this already. Here check it out - https://poe.com/.
You could train an AI on text from say the New York Times, and it could serve as an amazing repository of liberal views. And so on and so forth.
AI gets me excited. To study more of it. To find out ways to use it to make life better. To make me more productive. And to figure out ways to leverage it as an investor (unfortunately not many real options in India, if at all).
So, while one needs to be excited about AI for various reasons, there is much need to be very cautious about the other kind – ‘artificial’ intelligence.
Seasoned readers would understand what is being referred to – the mahaguru finfluencers. Few of them are probably “artificially" intelligent.
Don’t get me wrong. Some of them are wonderful people and I have spoken to them. The reference here is to those who are riding this rising tide in the stock market, and peddling views that are aimed more at grabbing eyeballs than genuinely trying to empower their readers or viewers with solid opinions.
And where do “solid opinions" come from? From real-life experience in the field. You can read as many books as you want…regurgitate all of Buffett and Munger’s teachings (with or without credit to them)…but in the end, what is real is whether you have demonstrated successfully that you have the experience to back it all.
You see, a lot of the intelligence that we truly revere comes from ancient texts written by people after deep thought, unique experiences and/or their being present in person as history unfolded. It comes from real gurus like Buffett and Munger whose teachings are based on decades of experience. Where it does not come from is someone incentivised to post videos, so that users will open demat accounts, and then earn them an income for life (because they could be getting a share of the broking commission). Or generate some advertising revenue.
The reason we are discussing this topic today is that market regulator Sebi, in 2023, came out with a brilliant set of guidelines to curb this “artificial" intelligence-based finfluencer menace. Unfortunately, the same has yet to be implemented.
The regulator has its reasons, but the fact remains that unless you cut off the monetary link between say a broker and a finfluencer, the latter will always be incentivised to whip up passions to get people to open demat accounts, and trade.
As 2024 gets underway, we hope the regulator will take note and get down to notifying these guidelines.
Meanwhile, as a common investor, one need not wait for that to happen. Reevaluate your sources of learning and opinions today. Default to the AI if you have to. But “artificial" intelligence? That’s a big AVOID.
Disclaimer: You should always consult your personal investment advisor/wealth manager before making any decisions.
Rahul Goel is the former CEO of Equitymaster. You can tweet him @rahulgoel477.
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