If AI can trade stocks and derivatives better than any humans, maybe we'll see wealth accumulation in a few large AI firms. And the stock market becomes effectively useless to the rest of us.

What AI? ML with gradient descent? Neural nets with deep learning? LLMs? Or the abstract concept of AGI that may or may not possible, but definitely isn't here yet?

Hedge funds and investment banks are already using these tools to the max, and the markets are plenty profitable for everyone

RenTec did this successfully, but their strategies didn't scale up beyond ~$30B AUM before they started moving their markets too much (with the Medallion Fund).

It would be a reductio ad absurdum for the stock market which is long overdue.

I think what will happen is that ordinary people will invest in a mutual fund managed by AI and/or the funds people already invest in will start adopting AI-tooling.

I think this scenario is plausible because the path to this scenario is so smooth so it will be the default outcome unless something strange happens to prevent it.

They already use models for trading better than any human and have probably done so since the 1950s. And what do you know, wealth accumulation has been significant over the last 70 years.

trading =/= investing

You do realize that all the math used in AI/ML has been heavily used in Finance for decades right?

Everything is Applied Math if you squint hard enough.

All this AI/ML doomerism and boosterism is ridiculous. If you do not understand how gradient descent works or why as of today GPUs are better suited for model training compared to CPUs you should not have a say in this discussion.

Most conversations around AI/ML appear to basically be pop-philosophy discussions that aren't even that grounded in philosophy fundamentals.

If you have trash fundamentals, you will have a trash understanding of the world.

Yeah, but AI will be banned before that happens.