Over the past few years, artificial intelligence has had a growing impact on the stock market. What was once a building full of shouting and waving hands has gradually evolved to a room full of silent, stationary computers.
It turns out that computers aren’t just better because they’re silent, but also because they provide better return rates. The AI software named Arizona Financial Text can analyze and use data from financial markets to make more accurate predictions. The result has been a computer which provides better return rates than the top human stock brokers and analysts at hedgefunds and investment banks.
The notion of people making more money and a world with fewer rooms that are full of angry men waving their hands sounds too good to be true, and unfortunately, it is.
Not only does computer software have glitches (Knight Capital lost £261 million due to one) but it could even lead to the death of the stock market.
It’s a gradual process but we’re nearing the end of it. First, computers were used for research and communication. They were then used to monitor data. Nowadays, computers are replacing humans by predicting future stock prices more accurately. It’s not hard to imagine that soon, rather than having a plethora of human stock brokers with different ideas and suggestions we risk having a single machine that can decide what to invest in, better than any human on the planet.
It’s an inevitable destiny that the stock market is heading towards. Once a company perfects its algorithms better than the other companies, it will rule the stock market, and the stock market as we know it will come to an end.