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This is all accurate. The comment in this article is specifically about the top 10 AI companies, so the usual big tech stocks. I'm no expert, but I can understa

by ewzimm 3y ago

This is all accurate. The comment in this article is specifically about the top 10 AI companies, so the usual big tech stocks. I'm no expert, but I can understand how a stock gaining $277 billion in a single day can be concerning from an investment perspective. But it's hard to argue with the results of the progress in AI over the last few years. I have no idea how that will translate for investors, but I wouldn't be surprised if AI fundamentally changes the stock market into something fully automatic within the next decade. If it's reliably better at trading than people, then whoever has the most hardware is going to be able to make the best predictions, allowing them to buy more hardware and make better predictions. In 10 years, what's the purpose of a human trader?

boshalfoshal 3y ago
Your first point about AI changing markets was interesting until you put it in the context of automated trading, thats too small scale and kind of missing a bigger and more existential point. The long tail of AGI is that markets themselves are meaningless, and I say this as someone who worked at an HFT firm in the past. Automated trading already exists, but automated trading firms value explainability and reproducibility. Most common models in the quant trading space are linear regressions - they are simple and explainable. If you made an AI trade, it better be explainable, but explainable AI seems pretty far away at this point and it doesn't seem like something many companies care about right now. And despite all the automation in the trading space, there are still traders. Humans are decent at analyzing idiocyncratic events (0-shot learning), but machines are not (yet).
- ewzimm 3y ago
  I agree with you about markets as such being meaningless in the end because they're fundamentally social processes. But as technology makes efficiency in trading less reliant on humans, I think the social layer will disappear. Again, I'm no expert in trading, and I'm sure you understand the processes better than I do. I know that automation has been a big part of trading for a long time. But is fully automated and fully explainable AI really that far off? As in unattainable within the next decade? We're all guessing here, but judging on recent progress, I would bet that AI will be able to do everything a human trader could do, including providing the rationalization in a comprehensible and convincing way to managers, within 10 years at the very least, probably sooner. I would bet that AI can even do a better job of hitting the specific points that will be convincing to target the decision makers before that. The focus on AI in the stock market is already evidence of that. Right now, it's the people boosting AI that are convincing investors to put their money into it. And once they're invested, they're going to be more likely to be convinced by confirmation bias, therefore more likely to listen to the advice generated by the product that they already invested in. That's a cycle that will be hard to break.
  - lm28469 3y ago
    It's already like 70-75% fully automated by "ai"

by ewzimm 3y ago

boshalfoshal 3y ago

Your first point about AI changing markets was interesting until you put it in the context of automated trading, thats too small scale and kind of missing a bigger and more existential point. The long tail of AGI is that markets themselves are meaningless, and I say this as someone who worked at an HFT firm in the past. Automated trading already exists, but automated trading firms value explainability and reproducibility. Most common models in the quant trading space are linear regressions - they are simple and explainable. If you made an AI trade, it better be explainable, but explainable AI seems pretty far away at this point and it doesn't seem like something many companies care about right now. And despite all the automation in the trading space, there are still traders. Humans are decent at analyzing idiocyncratic events (0-shot learning), but machines are not (yet).

ewzimm 3y ago
I agree with you about markets as such being meaningless in the end because they're fundamentally social processes. But as technology makes efficiency in trading less reliant on humans, I think the social layer will disappear. Again, I'm no expert in trading, and I'm sure you understand the processes better than I do. I know that automation has been a big part of trading for a long time. But is fully automated and fully explainable AI really that far off? As in unattainable within the next decade? We're all guessing here, but judging on recent progress, I would bet that AI will be able to do everything a human trader could do, including providing the rationalization in a comprehensible and convincing way to managers, within 10 years at the very least, probably sooner. I would bet that AI can even do a better job of hitting the specific points that will be convincing to target the decision makers before that. The focus on AI in the stock market is already evidence of that. Right now, it's the people boosting AI that are convincing investors to put their money into it. And once they're invested, they're going to be more likely to be convinced by confirmation bias, therefore more likely to listen to the advice generated by the product that they already invested in. That's a cycle that will be hard to break.
- lm28469 3y ago
  It's already like 70-75% fully automated by "ai"