Earlier quoted context omitted.
Arguably, this has already happened at least twice in the past. One with the discovery of the Black-Scholes model, and arguably again with the advent of HFT (and the ability to basically front-run trades). The interesting thing about markets is you generally can only make money when things are mispriced. This limits the total potential gain even for actors with perfect information. Suppose we did have an AI model tha…
> The interesting thing about markets is you generally can only make money when things are mispriced. Why would you think things are not terribly mispriced right now? If only we were a lot smarter we'd know how.
That's not true. Pricing and predicting in the real economy depends on information; for a given amount of information, there are vastly diminishing returns for further intelligence. Because intelligence only allows predicting a bit further in future, as the complexity of predicting the future increases exponentially with lookahead distance; it's O(e^n). This is why hedge funds pay for things like satellite footage of oil tankers to predict changes in supply.