Hedge funds and other computer-driven trading firms are growing increasingly concerned about the threat that artificial intelligence presents to their profits, after a fake image of an explosion near the Pentagon triggered a brief sell-off in US stocks.
The S&P 500 index fell 0.3 per cent within 30 minutes late last month after a viral tweet from a blue tick verified Twitter account showed the image of an explosion that never happened. The image, which spread rapidly on social media and was very quickly shown to be fake, is likely to have been AI-generated, investigative website Bellingcat and others have speculated.
Nevertheless, the incident underscores how AI-generated news and images could pose a big problem for hedge funds and ultrafast proprietary trading firms that use complex algorithms to comb vast amounts of news and social media for market-moving signals that they can then rapidly trade.