Generative AI: Overview, Economic Impact, and Applications in Asset Management

Abstract

This paper provides a comprehensive overview of the evolution and latest advancements in Generative AI models, alongside their economic impact and applications in asset management. The paper is divided into two sections. The first section outlines the key innovations and methodologies that underpin large language models like ChatGPT, while also covering image-based, multimodal, and tool-using Generative AI models. Transitioning from the technical to the practical, the second section reviews the impact of Generative AI on jobs, productivity, and various industries, ending with a focus on use-cases within investment management. This section also addresses the dangers and risks associated with the use of Generative AI, including the issue of hallucinations. Understanding how this technology works and how it can be effectively applied is crucial for assessing its future prospects.

Keywords: Artificial Intelligence (AI), Large Language Models, ChatGPT, Generative Pre-Trained Transformer (GPT), Natural Language Processing (NLP), Productivity, Occupation, Applications, Asset Management

JEL Classification: C45, C88, J24, O33