AI for Investment: A Platform Disruption. (arXiv:2311.06251v1 [q-fin.GN])

With the investment landscape becoming more competitive, efficiently scaling
deal sourcing and improving deal insights have become a dominant strategy for
funds. While funds are already spending significant efforts on these two tasks,
they cannot be scaled with traditional approaches; hence, there is a surge in
automating them. Many third party software providers have emerged recently to
address this need with productivity solutions, but they fail due to a lack of
personalization for the fund, privacy constraints, and natural limits of
software use cases. Therefore, most major funds and many smaller funds have
started developing their in-house AI platforms: a game changer for the
industry. These platforms grow smarter by direct interactions with the fund and
can be used to provide personalized use cases. Recent developments in large
language models, e.g. ChatGPT, have provided an opportunity for other funds to
also develop their own AI platforms. While not having an AI platform now is not
a competitive disadvantage, it will be in two years. Funds require a practical
plan and corresponding risk assessments for such AI platforms.



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