SHANGHAI: Chinese quant hedge fund managers are rushing to explore ChatGPT-style tools, embracing the emerging AI technology that has sparked a global frenzy since the release of the widely popular Microsoft-backed OpenAI chatbot.
Quants’ focus on advanced artificial intelligence to aid decision-making comes amid a tough investment environment, as China’s post COVID-19 recovery wanes and competition rises in the country’s 20 trillion yuan (US$3 trillion) private fund industry.
“ChatGPT is an epoch-making application … It can draw conclusions from a complicated network of relationships with numerous dimensions in ways human brains cannot,” said Steve Chen, partner of Shanghai-based MX Capital.
“Exploring its ability is now our main focus.”
His hedge fund already uses ChatGPT to better understand a company’s fundamentals and avoid value traps, project earnings power, and identify investment opportunities and risks.
ChatGPT, trained using a huge amount of data, can write poems, compose music, draw paintings, and generate other strikingly humanlike responses based on user prompts.
A ChatGPT-like tool boosts quants’ ability to process text-related data, said Feng Ji, chairman of Baiont Capital.
“We were also inspired by ChatGPT to build large models using trading data, instead of text,” Feng said.
Feng’s hedge fund, backed by former Google China chief and AI veteran Kai-Fu Lee, has invested heavily in hardware to enhance computing power required for model-training.
High-Flyer, among China’s biggest quant funds, has hailed advanced AI as the “greatest innovation of our times”.
In April, High-Flyer announced the setup of a research unit to explore disruptive AI technologies.
Source: CNA
