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ChatGPT AI performs financial analysis better than you, study says

ChatGPT AI performs financial analysis better than you, study says

A study conducted by a US university has shown that the GPT-4 model is better than the human model at analyzing and predicting finances

In a study conducted by the Booth School of Business at the University of Chicago, USA, the large linguistic model [LLM] OpenAI’s GPT-4 has proven to be better than humans when it comes to financial forecasting and analysis. The tests compared the capabilities and speed of artificial intelligence when preparing financial statements and creating forecasts based on that content. The result was a “victory” for the model used in ChatGPT Furthermore, it offered more meaningful short-term strategies.

Studies have highlighted the benefits of artificial intelligence

The study presented has 54 pages and was published in May in the United States. According to the information, the experiments focused on future earnings based on predetermined forecasts.

“We provided standardized, anonymized financial statements to GPT-4 and instructed the model to analyze them to determine the direction of future profits,” the studio explains. “Even without any industry-specific narrative or information, the LLM [GPT-4] surpasses financial analysts in its ability to predict the evolution of earnings”, underlines the document.

In its pages, the experiment states that command prompts created market demonstrations and asked the little robot to indicate trends and then make calculations on different financial indexes. Therefore, scholars have noted that AI has the ability to recognize patterns, as well as business concepts involving revenue, profits, and other elements of a company.

“The LLM has a relative advantage over human analysts in situations where analysts tend to have difficulty,” the tests point out. “The LLM’s prediction does not come from its formative memory. Instead, we have found that the LLM generates useful narrative insights into a company’s future performance,” he concludes.

You can see the full study on the Chicago booth page at papers.ssrn.com/sol3/papers.cfm?abstract_id=4835311.

Is GPT-4 stupid or smart?

Despite the study claiming GPT-4’s “victory” in finance against humans, OpenAI CEO Sam Altman stressed that AI model is ‘stupid and embarrassing’. According to the executive in a chat at Stanford University in the United States, the adjectives presented are in comparison to the future LLMs that his company is preparing.

“GPT-4 is mildly embarrassing at best,” Altman said. “GPT-5 will be much smarter than GPT-4,” he concludes.

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Source: Terra

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