JPMorgan taps ChatGPT for new thematic investment suite

investmentnews.com:

A year after a wave of speculation broke out over its application to trademark the word “IndexGPT” in connection to an unspecified artificial intelligence-powered tool, JPMorgan Chase & Co. is finally unveiling the product that will bear the name.

IndexGPT is a new range of thematic investment baskets created with the help of OpenAI’s GPT-4 model. The tool generates a list of keywords associated with a theme, which are then fed into a separate natural language processing model that scans news articles to identify companies involved in the space.

In essence, it’s a largely automated way to create so-called thematic indexes, which identify investments based on emerging trends — think cloud computing, e-sports or cybersecurity — rather than on traditional industry sectors or company fundamentals.

It’s the latest Wall Street attempt at riding the investor frenzy for all things AI, which fans say has the capacity to usher in a new era of accelerated economic growth. The excitement has helped big tech companies power US stocks to repeated record highs over the past year.

Compared to that hype, IndexGPT is far from a revolution in the world of finance, where an assortment of tech-led firms and quant traders are trying to master the markets with AI. Yet finding fully-validated use cases in a highly-regulated industry where missteps can cost millions is famously a challenge.

Rui Fernandes, JPMorgan’s head of markets trading structuring, says IndexGPT is a first step in a long-term process of integrating AI across its index offering.

“It’s about being able to select a broader range of stocks that are not necessarily the obvious companies that everyone already knows about,” he said in an interview. “We are constantly looking for