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This may be a naive question about #AI and #finance. Maybe an expert knows the answer?
How can we avert total instability of the financial system once more people adopt AI for the optimization of their investments?
I've seen anecdotal reports lately about people making lots of money with AI-assisted investments, since seeing high-order correlations in complex dynamics is something current AI algorithms really do well, so they came up with counterintuitive strategies that made a lot of profit.
Once a larger number of people use these AI-assisted strategies, the dynamics of the market will, of course, change, & AI-based predictions based on earlier training data will become useless. So investors will have to constantly retrain their models.
It's not hard to imagine a dynamic where this gets out of hand: the market changes faster than the training can keep up. At the same time, pure human intuition will have become completely useless.
Thus: neither AI-based nor human-intuition based strategies will work.
Seems like the perfect recipe for chaos. Am I getting something wrong here? Or is it true that one of the most likely immediate outcomes of current AI will be a rather drastic and global breakdown of the current financial market without much of a plan of how to fix the problem?