Prompt Away AI Biases, Black Boxes

Relying on AI for inputs on your investing decisions may not be in your best interest, as chatbots typically tend to give response that are likely to be overly flattering and agreeable, and align with your existing biases

- Ayush Khar

Artificial intelligence (AI) available 24x7-is fast becoming a friend to those in doubt or, in some cases, even distress. There are stories of people approaching AI for a variety of things-from getting their office work done to satiating their curiosity to seeking personal advice and more.

But is AI a friend you can totally rely upon? Experts we spoke to pointed out that AI was prone to giving in to biases that can do more harm than good in many circumstances, investing being one. We explain three of these.

Confirmation Bias

A true friend is usually seen to be someone who can give you an unbiased, sometimes even unpopular, opinion; someone who cares for you but is not shy of saying something that might upset your set of beliefs, without really upsetting you.

But, most of the times, AI does the exact opposite. Chatbots tend to agree with your views more and more, confirming what you already believe. Earlier this year in April, Open AI rolled back an update to its model GPT-40, citing that the update made the chatbot "overly flattering or agreeable".

This trait, however, can spell disaster for an investor seeking advice from AI. For instance, an AI chatbot is likely to suggest investingrelated articles to a user who is in the habit of searching the Internet for related news. By doing this, the chatbot confirms and strengthens the individual's beliefs and choices. This tendency to confirm existing beliefs is called a 'confirmation bias'.