Robinhood AI Trading: Can Chatbots Boost Your Returns?

Robinhood is launching a new feature that allows stock trading using AI chatbots. Investors with new "agent-based trading accounts" can use AI programs like Anthropic's Claude and OpenAI's ChatGPT. This lets them build portfolios, automate strategies, and place orders through AI. This move follows similar offerings from rival platforms eToro and Public. Steven Mackintosh, CIO at Sui Group Holdings, believes securities firms will compete intensely in this area. However, research is still lacking on whether AI investment recommendations actually improve returns. One experiment gave $10,000 to six large language models for cryptocurrency trading. They made profits in only 6 out of 32 instances. The models also showed sensitivity to small prompt changes. CIO Mackintosh warns that current base LLMs are not suitable for generating profits and are merely general probability models. For these models to function properly, they need access to traditional datasets used by trading firms. This highlights the ongoing debate about the true effectiveness of AI in financial markets.