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Artificial Intelligence’s Potential Impact on the Investment Management Industry

Robert Dalie explores the pros and cons of AI’s growing role in the finances that run our lives


The topic of artificial intelligence (AI) has been around for some time now. We’re beginning to hear a lot more about it as many industries have begun to spend resources on it in a serious way. Looking back the past few years, two experiments in particular stand out as being the catalysts for the renewed interest in AI or smart machines. First, IBM’s Watson supercomputer won against two of Jeopardy’s greatest champions. More recently, Google’s AlphaGo program handily beat the world Go (a complicated board game originated in China) champion. Of course, many big firms are jumping into developing self-driving cars (where AI is a must) – Tesla, Uber, Google, and even China’s Baidu among them.

What Watson and AlphaGo were able to achieve is nothing short of amazing. Without the machine’s ability to learn, what they did would have been impossible. The general consensus view has been that technology in the next-so-many years is going to automate a lot of mundane tasks that are currently being done by humans, even in the areas of medicine, law, and investment management.

Many professional knowledge workers aren’t too worried that machines will be replacing them anytime soon as many believe they will still be needed to do the complex thinking. Unfortunately, a number of recent studies have shown that most human beings tend to perform sub optimally even in those complex-thinking areas. According to Professor Ed Hess of the University of Virginia, to compete and add value in the age of smart machines, most of us will need to take our cognitive skills to a much higher level.




Oppenheimer & Co. Inc. does not provide legal or tax advice, but will work with your other advisors to assure your needs are addressed. The opinions of the author expressed herein are subject to change without notice and do not necessarily reflect those of the Firm. Additional information is available upon request. Investors should review potential investments with their financial advisor for the appropriateness of that investment with their investment objectives, risk tolerances and financial circumstances.

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