Using AI for the stock market might actually make things worse because everyone will end up making the exact same mistakes at the same time.
March 20, 2026
Original Paper
AI Adoption in Financial Markets and Information Quality
SSRN · 6417018
The Takeaway
While AI makes individual analysts more efficient, it leads them to rely on the same data sources and vendor biases. This causes the market to 'spuriously converge,' where everyone agrees on a prediction more strongly even as that prediction becomes more likely to be wrong.
From the abstract
We model AI-assisted information processing in financial markets. Information intermediaries choose a technology (human or AI-assisted) and how many sources to process. When AI is cheaper and more precise per source, adoption unambiguously improves individual forecasts. When AI is cheaper but noisier per source, adoption raises source coverage but can increase forecast error. Aggregation does not resolve the tension: the consensus can worsen even when analysts’ errors are independent, and shared