JAKARTA - China's quantitative hedge fund manager is rushing to explore ChatGPT-style tools, adopting rising AI technology since the release of OpenAI chatbots supported by Microsoft.
The focus of quantitative experts on advanced artificial intelligence to help decision-making comes amid a difficult investment environment, with China's weakening post-COVID recovery and growing competition in the country's 20 trillion private fund industry (IDR 44,725 trillion).
"ChatGPT is an application that opens a new chapter... It can be deduced from complex, many-dimensional networks of relations in ways that the human brain is impossible to do," said Steve Chen, a partner of Shanghai-based MX Capital.
"Exploring his capabilities is now our main focus," Chen said.
His hedge fund already uses ChatGPT to understand the company's fundamentals and avoid value traps, project income power, and identify investment opportunities and risks.
ChatGPT, trained using large amounts of data, can write poetry, compose music, draw paintings, and produce responses that are very similar to humans based on user requests.
The ChatGPT-like tool also enhances the ability of quantitative experts to process text-related data, said Feng Ji, chairman of Baiont Capital.
"We are also inspired by ChatGPT to build large models using trading data, not text," Feng said.
Feng's hedge fund, backed by former head of Google China and AI veteran Kai-Fu Lee, has invested heavily in hardware to increase the computing power needed for model training.
High-Flyer, one of China's largest quantitative hedge funds, has called advanced AI the "largest innovation of our time".
In April, High-Flyer announced the formation of a research unit to explore AI technology that is disruptive.
MACHINE VS MAN
Last week, Beijing-based asset manager Zhishan Investment said it would implement "Cybertron" AI robots in all products and use them to help change its investment methodology.
Feng of Baiont Capital has bigger ambitions, he wants to let robots control the entire investment process - from analysis and data predictions to decision making and execution.
Feng's Nanjing-based company uses a high-frequency trading strategy and only recruits computer scientists, not Wall Street traders.
VOIR éGALEMENT:
According to Feng, robots are much better than humans in predicting stock movements in the next hour as "machine learning is designed to make such predictions".
Although tools like ChatGPT have created excitement, its race to develop and adopt strong AI services has also raised concerns about privacy, security, and work sustainability.
Regulators are looking for ways to address the impact of generative AI technology. In China, where tech giants such as Alibaba, Sensetime, and Baidu are raising their AI bets, regulators announced draft measures in April that provide greater scrutiny of the technology.
Larry Cao, senior director of research at the CFA Institute, warned that this technology could threaten the work of bankers and fund managers working in a field where data is easily accessible.
"If you are an analyst who only tells stories that everyone already knows, what is your added value? I could have asked ChatGPT, right?" said Cao, editor of a newly published guidebook on how to apply AI and Big Data in investment. "This threat is real, but not today."
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