Paper Type
Complete
Paper Number
1357
Description
The emergence of advanced language models presents a transformative opportunity within the financial industry, especially in financial reporting. This paper investigates the impact of AI-generated news on retail investors and firms, utilizing the staggered implementation of AI-generated news by the Associated Press (AP) since 2014. Our findings reveal that AI-generated news significantly increases retail investor participation and responsiveness. We also find evidence that AI-generated news improves firms’ stock liquidity. However, we also identify potential caveats associated with AI-generated news, such as data source reliability, information inclusion, and potential desensitization of retail investors to AI news. Our research contributes to the ongoing discussion on democratizing investment through technology, highlighting the potential of AI to empower retail investors and enhance the visibility of small and medium-sized firms. By examining both the benefits and challenges, this paper provides valuable insights into the evolving role of AI in shaping the future of finance.
Recommended Citation
Chen, Yanzhen; Liu, Chewei; and Zhuang, Qianqian, "News by AI, Gains for All: Retail Investors’ Ride with Caution’s Call" (2024). PACIS 2024 Proceedings. 22.
https://aisel.aisnet.org/pacis2024/track01_aibussoc/track01_aibussoc/22
News by AI, Gains for All: Retail Investors’ Ride with Caution’s Call
The emergence of advanced language models presents a transformative opportunity within the financial industry, especially in financial reporting. This paper investigates the impact of AI-generated news on retail investors and firms, utilizing the staggered implementation of AI-generated news by the Associated Press (AP) since 2014. Our findings reveal that AI-generated news significantly increases retail investor participation and responsiveness. We also find evidence that AI-generated news improves firms’ stock liquidity. However, we also identify potential caveats associated with AI-generated news, such as data source reliability, information inclusion, and potential desensitization of retail investors to AI news. Our research contributes to the ongoing discussion on democratizing investment through technology, highlighting the potential of AI to empower retail investors and enhance the visibility of small and medium-sized firms. By examining both the benefits and challenges, this paper provides valuable insights into the evolving role of AI in shaping the future of finance.
When commenting on articles, please be friendly, welcoming, respectful and abide by the AIS eLibrary Discussion Thread Code of Conduct posted here.
Comments
AI