Key takeaways:
- UP Fintech has unveiled its TigerGPT investment assistant, which will help clients assess the vast amounts of publicly available data when selecting stocks
- The company is teaming up with other Chinese tech names like Alibaba, Baidu and Tencent to release their own custom chatbots, following the massive attention OpenAI’s ChatGPT
By Shirley Lau
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ChatGPT may have the advantage in terms of general knowledge. But China’s UP Fintech (NASDAQ:TIGR) thinks it has a leg up on the global chatbot sensation when it comes to investments. And that could mean big bucks for stock buyers who will be the main users of TigerGPT, as UP Fintech officially announced last week.
But UP Fintech’s new chatbot will only be able to do so much, and will stop offering actual stock picks. That’s probably just as well, since only a tiny fraction of the thousands of analysts, fund managers and other advisers can consistently pick stocks that outperform the broader market.
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ChatGPT has become a global sensation in recent months, although the AI-powered chatbot developed by US-based OpenAI is out of reach in China. Its massive popularity has spurred a number of Chinese firms to rush the launch of their own alternative products that can answer almost anything in seconds, even writing poems and news reports.
Baidu (NASDAQ: BIDU), Alibaba (NYSE: BABA), Tencent (0700.HK) and JD.com (NASDAQ:JD) have all joined the chatbot race with new announcements in the past two months, as have smaller players that iFlytek (002230.SZ) and NetEase (NASDAQ:NTES).
But UP Fintech, best known for its stock trading app Tiger Brokers, hopes to outdo the competition with its TigerGPT AI-powered investment assistant, which is still undergoing testing and training. UP Fintech says the chatbot will be able to absorb the latest market information, pointing to the virtual tool as the industry’s first AI investment assistant.
UP Fintech’s shares traded up 6.2% on the day of the announcement last week, as investors looked forward to the chance to make some extra cash from the chatbot. But the stock gave back all those gains and more over the next few days as tensions quickly eased.
Unlike ChatGPT, which is a general-purpose chatbot, TigerGPT specializes in the investment space, aiming to “provide intelligent global investment decision support for users,” UP Fintech said. It will make use of UP Fintech’s vast content library and other online resources such as research to answer questions from investors. With just simple questions, users will gain access to over 10,000 listed business profiles, earnings and business actions.
UP Fintech claimed that TigerGPT was the first AI investment assistant, although we discovered what appear to be rivals in products such as Wealthfront and SigFig, both from the US. And just a day after UP Fintech’s announcement, Singapore’s online brokerage house Long Bridge Securities launched its own PortAI, an integrated financial intelligence assistant based on OpenAI’s GPT technology.
Compared to TigerGPT, PortAI appears to offer more sophisticated features, at least based on the more detailed description provided by Long Bridge. One example is PortAI’s “One Click Summary”, which can extract important information from long financial articles and deliver a concise summary in seconds. Another feature called “Intelligent Daily Report Recap” is a personalized tool that helps investors understand key indicators specific to their investment portfolio and identify important events related to individual stocks in their portfolio.
All this shows that AI can be a particularly valuable tool for investors, and can quickly become an important differentiator for online brokers who can offer the smartest products.
First in China
While it’s far from clear how “smart” the TigerGPT will be, the product appears to be the first of its kind in China, at least based on major announcements so far. Alibaba’s Tongyi Qianwen, for example, will be integrated into the DingTalk workplace communication platform to help users with administrative tasks such as summarizing meeting notes. NetEase plans to use its own generative AI to generate dialogue in a mobile martial arts game, reflecting its own background as one of China’s top game operators.
Nevertheless, TigerGPT comes as a welcome positive news for UP Fintech, which was in more problematic headlines at the end of last year after it and rival Futu (NASDAQ:FUTU) was ordered by China’s securities regulator to stop taking new clients in mainland China for operating without required licenses. That news sent Tiger’s share price down nearly 30% in a single day late last year, and the stock is still trading well below pre-sale levels.
Financially, UP Fintech appears to be in good shape. Despite global macroeconomic uncertainty, it recorded total revenue of $225.4 million last year, including a 15.2% year-on-year increase in fourth-quarter revenue to $63.85 million.
While the announcement of TigerGPT had a limited impact on UP Fintech’s stock, it is still possible that the stock could get a boost if the product impresses investors at the actual launch. A comparable – and perhaps cautionary – parallel example of the dangers of overhyping such new technology can be found in Baidu’s recent launch of its own Ernie Bot.
The search giant’s revelation in early February that it would soon finish testing Ernie sparked a 15% rise in its shares in a single day on February 7. But the chatbot’s actual unveiling at a press conference in mid-March left many unimpressed. Baidu CEO Robin Li’s presentation at a media event featured only pre-recorded and no live demonstrations. The stock had already begun to decline even before the stunning event, giving back all of its short gains and more.
For investors, a key question will be the extent to which TigerGPT can help them pick winning stocks. The answer may take some time to determine, based on the performance of stocks that investors decide to buy using information they get from the chatbot. And at the end of the day, investors will still have to make the final decision on whether to buy, since the chatbot will not make actual stock picks.
That said, using any AI chatbot as an investment aid should bring many benefits. One of the biggest is a chatbot’s ability to quickly sift through vast amounts of data, such as financial reports, news articles, historical trends and patterns. In the company’s announcement, UP Fintech founder Wu Tianhua noted that such technology could eliminate the “overwhelming feeling” investors can get from trying to make sense of “mountains of scattered data and information.”
AI can also consider other less obvious factors that can affect a stock, such as geopolitical events and new industry developments, without being influenced by emotions or personal biases. All of this can help investors reduce their risk exposure, optimize their investment strategy and make more informed decisions, which should ultimately improve their chances of higher returns.
But as with all forms of technology, AI chatbots are likely to have their limitations, at least in the short term, such as the inability to provide highly personalized investment advice. Consequently, potential users of TigerGPT should manage their expectations. And stockbrokers probably don’t have to worry about losing their jobs—at least not yet.
