Chinese quants double down on AI bets amid ChatGPT frenzy

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SHANGHAI/SINGAPORE (Reuters) – Chinese quant hedge fund managers are tapping into the emerging AI technology that has sparked a global craze since the release of the widely-used Microsoft-backed OpenAI chatbot, and are launching ChatGPT-style tools. hurrying to explore.

Quantz’s focus on advanced artificial intelligence to aid decision-making comes as China’s economic recovery slows after the coronavirus pandemic and the country’s 20 trillion yuan ($3 trillion) private fund industry The investment was made in a tough investment environment where competition is intensifying.

“ChatGPT is a groundbreaking application…it allows us to draw conclusions from complex relational networks in multiple dimensions in a way that the human brain cannot,” said Shanghai-based partner, MX Capital. says Steve Chen.

“Exploring that capability is our main focus now.”

His hedge funds are already using ChatGPT to better understand company fundamentals, avoid value traps, predict earnings potential, and identify investment opportunities and risks.

ChatGPT has been trained with vast amounts of data to be able to write poetry, compose music, draw pictures, and generate other surprisingly human-like responses based on user prompts.

Baiont Capital chairman Feng Ji said tools like ChatGPT will help quants process more text-related data.

“We also took inspiration from ChatGPT to build a large-scale model using transactional data instead of text,” said Feng.

Feng’s hedge fund, backed by former Google China head and AI veteran Li Kai-fu, has invested heavily in hardware to beef up the computing power needed for model training.

One of China’s largest quant funds, HiFlyer, hails advanced AI as “the greatest innovation of our time.”

In April, HighFlyer announced the creation of a research unit to study disruptive AI technologies.

machine vs human

Beijing-based asset management firm Chishan Investment announced last week that it would introduce the AI ​​robot Cybertron into all its products and use it to restructure its investment method.

Baiont Capital’s Feng is even more ambitious, giving robots full control over the investment process, from data analysis and forecasting to decision-making and execution.

Mr. Feng’s firm, based in Nanjing, employs a high-frequency trading strategy and employs only computer scientists, not Wall Street traders.

Robots will do a much better job than humans at predicting the next hour’s stock price movements because “machine learning is designed to make such predictions,” Feng said. rice field.

While tools like ChatGPT are fueling excitement, the race to develop and deploy powerful AI services is also fueling concerns about privacy, safety, and job security.

Regulators are looking for ways to address the impact of generative AI technologies. In China, where tech giants such as Alibaba, SenseTime and Baidu are ramping up their investments in AI, regulators in April released draft measures to tighten scrutiny of the technology.

Larry Kao, senior director of research at the CFA Institute, warned that the technology could threaten the jobs of bankers and fund managers working in fields where data is easily accessible.

“If you’re an analyst and you’re just telling people what everyone else is telling them, what’s your added value? Just ask ChatGPT, right?” Investing in AI and Big Data Cao, editor of the newly published handbook on how to apply it to

“The threat is real, but it’s not tomorrow.”

(1 US Dollar = 7.0827 Chinese Yuan)

(Reporting by Samuel Shen and Tom Westbrook; Editing by Himani Sarkar)

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