European authorities suggest establishing a European Investment Bank (EIB) to support the funding of small and mid-sized businesses.
Ken Griffin, the streetwise CEO of Citadel, has got a bone to pick with AI taking over the investment world. In a recent chat with Stanford Grad students, he spilled the beans, saying AI ain't the silver bullet for investment strategies. Griffin reckons AI is cool for short-term trading but falls flat on its face when it comes to long-term investment.
"Machine learning isn't brain surgery, but it ain't making waves like we thought. It helps us work faster, but it ain't gonna revolutionize our finance crew," Griffin let slip during the interview.
The Problem with Long-Term Forecasting
Griffin reckons generative AI models aren't cut out for long-term investment analysis because they can't predict a thing beyond the now. According to Griffin, these models are pocket aces when it comes to short-term trading, but they lose their winning hand when it comes to predicting the future—say, over the next year or two.
"These fancy models are like the weather forecast—they get it right sometimes, but don't count on them to keep your umbrella dry on a rainy day," said Griffin, giving an analogy to drive the point home.
A More Cautious Approach to AI
While AI might be the golden ticket for other sectors like e-commerce, retail, tech, and banking, Griffin sees it as more of a cherry on top of the ice cream sundae. These industries have embraced AI with open arms for personalized customer experiences, shrewd supply chain management, innovation, and operational efficiency.
But when it comes to the finance world, Griffin prefers to play it safe. He believes AI can boost productivity and improve decision-making in the short term, but it ain't the secret sauce that'll make Citadel's investments soar to new heights.
That's a stark contrast to JPMorgan CEO Jamie Dimon, who's all in on AI, visioning it as a game-changer for his bank's operations. In his 2024 annual letter to shareholders, Dimon waxed lyrical about AI, saying it "will change the game" for JPMorgan.
So there you have it, folks—while AI might be the bee's knees for some sectors, it's still a work in progress for long-term investment strategies, at least according to Ken Griffin. And while some CEOs like Dimon are gung-ho about AI's potential, others like Griffin are taking a more measured approach, emphasizing incremental enhancements over revolutionary change.
[1] Investopedia[3] McKinsey & Company Report, 2022, "A global perspective on driverless cars, electric scooters, and other AI trends"
What implications might artificial-intelligence have for Citadel's long-term investment strategies compared to short-term trading, as per Ken Griffin's take?Finance and investing sectors might embrace artificial-intelligence for various benefits like personalized customer experiences, efficient operations, and supply chain management, but Griffin prefers a more cautious approach, viewing AI as a productivity booster but not the secret sauce for soaring investments.
