Generative AI and ChatGPT in Financial Markets and Corporate Policy: A Comprehensive Review

Abstract

This article conducts a comprehensive review of the rapidly increasing research on the implications of generative AI, particularly Large Language Models (LLMs) such as ChatGPT, for financial markets. We first review studies that utilize ChatGPT to interpret sentiment within financial reports, conference calls, and analyst reports, assessing how these insights can influence evaluations of corporate performance. Additionally, our review extends to exploring the broader impacts of generative AI on corporate policies, shedding light on the transformative potential and challenges posed by these technologies. Through this synthesis, we aim to provide a holistic overview of the current research in finance, highlighting significant findings, identifying existing knowledge gaps, and proposing future directions for scholarly investigation. This review is intended as a valuable resource for academics, industry practitioners, and policymakers, offering critical insights into the integration of generative AI technologies in financial analysis and corporate strategy formulation. It underscores the rapid evolution of this interdisciplinary field and advocates for continued exploration to understand the potential of generative AI in shaping the future of financial markets and corporate strategies.

Keywords: Generative AI, Large Language Models (LLMs), ChatGPT, Financial markets, Corporate performance, Sentiment analysis, Natural language processing (NLP), Artificial intelligence (AI) in finance