Bill Cohan, a Wall Street expert and author of “Dry Powder”, recently discussed the implications of Artificial Intelligence (AI) on the financial industry in an exclusive conversation. The rise of AI has brought numerous opportunities for investment banking, but Cohan warns that it also poses significant challenges.
One major concern is the hype surrounding AI companies, which he believes will lead to a speculative bubble. As these companies go public, Wall Street will hype them up, attracting retail investors and institutional investors alike. However, this may result in retail investors being left holding the bag, while institutional investors reap the benefits.
Cohan also notes that the high-touch, white-glove service-oriented business of Wall Street relies heavily on human expertise and capital. He fears that AI may replace workers and expertise, but believes that human knowledge and art cannot be replicated by science. Instead, he expects a bespoke approach to remain in place.
While Cohan acknowledges that automation has improved efficiency on Wall Street, he also highlights the importance of innovation. However, he notes that Wall Street is not particularly innovative, often adopting successful practices and technologies after they have become mainstream.
Cohan’s concerns highlight the need for caution when investing in AI companies. As the hype surrounding these companies reaches its peak, investors should be aware of the potential risks and consequences. With Cohan’s insights, we can better understand the impact of AI on Wall Street and what to expect from this rapidly evolving industry.
Source: https://puck.news/how-ai-will-or-wont-change-wall-street