Johannesburg, March 2023:

The recent, trending development of ChatGPT has social media predicting the end of work as we know it and the crumbling of traditional stock trading and financial investment infrastructure.  Fred Razak, Chief Trading Strategist at CMTrading takes a closer look at the issues and the potential impact and offers his thoughts.

How will AI impact investing?

According to Razak the presence of AI in investing and finance is not something to be feared, but does open some areas of concern, particularly when it comes to the regulation of these new tools.

“The full impact is still up in the air, but regulators always tend to be two steps behind on new technologies. In finance we saw, and are seeing, this with Bitcoin trading and other crypto currency investment where they are yet to regulate them and that’s been around for ten years already,” he says. “The truth is, the people who should be concerned, are not going to be worried until after the fact and that’s the reality of this emerging field of AI.”

Are there ethical challenges to using AI?

Razak believes that the use of AI does come with some pretty hefty ethical questions that society and financiers in general will have to answer.

“There are definitely some ethical challenges when it comes to using AI in finance. For one thing it opens up the possibility of real market manipulation,” says Razak. “There will definitely be some black holes that AI will be able to see and manipulate in the market place – either on the micro level or the macro level. There is definitely room for it to be unethical, simply by itself especially if it gets a mind of its own.”

“It will definitely be something we have to contend with in order to function as a laissez-faire community in the market place. But it’s yet to show us what the true extent of the impact will be.”

“At this stage we can’t possibly know what all the positives and negatives will potentially be,” he says. “We need to think ten steps ahead of what the potential capacity for AI could be, and then perhaps we can start predicting what the potential ramifications could be down the line.”

Do opportunities in AI exist for the average investor?

Razak firmly believes that the movement into AI is a watershed moment in human development linked in potential with the creation of the internet.

“Ultimately some of the companies that are producing AI technology stand to really gain the most. For instance Microsoft is heavily invested in it,” says Razak. “There is also space for an emerging market. There is some huge potentiality for it. I saw one study that suggested AI related business will be worth approximately US$30-trillion business by 203. Now I don’t know if those numbers are correct, but it definitely has upwards momentum.”

“We are at that cusp with AI. I remember twenty years ago people noting the Cyber Monday for the first time hit a billion dollars in sales. That’s a threshold and I think we are going to be hitting those thresholds with AI as well,” Razak explains.

“Ultimately, I think everyone stands to benefit from AI. Corporations, retail clients – it’s definitely going to add value to the market place, whether that’s in Wall street or Main street,” says Razak. “Investors are usually far behind the technology and I think AI, like crypto currencies, is going to be an area where we are even further back.”

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