There’s a bit of a buzz surrounding the use of artificial intelligence (AI) language software, mostly focused on ChatGPT.  

Are we seeing the rise of a benevolent “living” machine, which can interact with humans and serve their needs, or are these the first steps towards creating HAL 9000 from 2001: A Space Odyssey?  

For those not acquainted with this platform, ChatGPT is a “chatbot auto-generative system”, a program that uses “natural language processing” to communicate.  

The system is informed by various sources and it models its language to respond to questions with real humans, using predictive text.  

It interacts in a conversational way, with a dialogue format that allows it to answer follow up questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests.  

What this means is that it can do a pretty good job mimicking human interaction.  

ChatGPT’s meteoric rise commenced at its launch by OpenAI on 30 November 2022, drawing over 100 million registered users by the following January. 

It’s been asked to write essays, compose poetry, comment on politics and answer life questions, leading to concerns about plagiarism, cheating, bias, misinformation, and worse.  

Unlike Google, which provides search results based on existing web pages, ChatGPT reacts to information given to it and adapts its responses accordingly. 

Like Google, ChatGPT is affected by the algorithms set by its programmers and the available information. So, it can provide an answer, but can it provide an accurate evaluation of the issue to which it is responding?  

And – more importantly – what does this mean for the future of investment?  

Does ChatGPT need an Australian Financial Services Licence?  

In preparing to write this article, I thought I would ask ChatGPT to write an article for me about how it supports retail investors (this is NOT that article). Interestingly, it produced a 472-word piece, starting with:

It's an interesting marketing pitch, but do the claims stack up?  

Can you use ChatGPT for investment advice?  

Arguably, in the future, ChatGPT will be able provide information, insights, and analysis, that might help investors to make informed choices.  

The problem at the moment is that the information is date limited.  

For example, I asked about the names of the Chair and CEO of an organisation and not only was I advised that the platform only had information accurate as at September, 2021, but then gave me the wrong names for both positions as of that date.  

This raises questions about its current functionality for investment purposes – it may have useful historical information, but you’re not going to be able to receive accurate sharemarket results. Investment advisors need not be worried yet.  

What other limitations might there be?  

Many people say not to follow the herd when investing. Yet, there is a real likelihood that ChatGPT – informed by programmers and the internet – will be the source of information for the herd in the future.  

There is also the potential for gaming of the system. If we reach the point where people make decisions on whether to buy, hold, or sell shares, based on ChatGPT’s recommendations, the temptation may be for a company or individual to flood it with one type of information that skews its answers. 

Without human intuition, judgement, and creativity, it is arguable that the platform will not be able to differentiate between information and misinformation, even if it is happy to tell you otherwise.

By all means, use ChatGPT as an information source, but not as your ONLY information source.  Question what it tells you, do your own research, and don’t sack your financial advisor just yet.  

The future of investment?  

As the technology evolves and the database informing the answers grows larger and more contemporary, it is possible that AI will become more informed, accurate, and useful.  

Real-time analysis would certainly be useful, and AI’s ability to give an answer quickly may give some people an edge, but there will always be questions around the biases of the programmers who created it and the algorithms they develop.  

For example, Silicon Valley Bank in the US collapsed in March, with allegations that not enough attention was paid to social issues. How would a platform such as ChatGPT have seen that as an investment option? Would it have endorsed it because of perceived strong potential, or would it have raised a red flag about the bank going eight months without a chief risk officer?  

Will AI platforms be able to be personalised to a future user’s financial goals, risk tolerance, investment horizon, and other preferences, or will it always be more generic? It’s not clear where the technology is going.  

If we continue to head towards AI investment advisors, however, regulators will need to work hard to keep some control over the system to protect the consumer.   

If you’re thinking of using ChatGPT for share information, maybe take it with a grain of salt, and ask, what could go wrong?

If you are curious about this new technology, you may want to sign up for a free account and ask ChatGPT a few questions for yourself. Or ask it to write you a poem or limerick.