Wed Sep 25 03:32:06 UTC 2024: ## Israeli Startup Gets Green Light for AI Chatbot That Gives Stock Advice, But Regulators Are Wary

**Tel Aviv, Israel** – An Israeli startup, Bridgewise, has secured regulatory approval from the Israeli Securities Authority (ISA) to launch a chatbot that provides stock picking advice. This comes amidst growing concern about the potential for AI to disrupt the financial markets.

The chatbot, called Stocktalk, will be offered through Israel Discount Bank and is designed to address the increasing demand for personalized financial analysis. According to the bank’s EVP Asaf Pasternak, “two thirds of people trust an algorithm more than a human to manage their money.”

Stocktalk is built on three AI models: two language models for data analysis and user interaction, and a stock rating model for decision making. It can provide background information on companies, summarize financial disclosures, and recommend stocks to buy or sell.

While Bridgewise plans to expand the chatbot’s capabilities to include annual forecasts and portfolio creation, it currently operates under strict regulations. The ISA has barred the chatbot from offering personalized financial advice.

However, this move has raised concerns among global regulators. US Securities and Exchange Commission (SEC) Chair Gary Gensler has expressed concerns about the potential for AI to destabilize the stock market. Gensler warns that the reliance on similar AI models and datasets could lead to a “herd mentality” in financial decisions.

The SEC is currently working on establishing limitations for AI applications in financial markets to prevent such a scenario. The future of AI in finance remains uncertain, but the development of Stocktalk signals a growing trend towards AI-powered investment tools.

Read More