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Chinese quants redouble AI bets amid ChatGPT frenzy

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Chinese quants redouble AI bets amid ChatGPT frenzy

Chinese quant hedge fund managers are rushing to explore ChatGPT-style tools, embracing the emerging AI technology that has sparked a global frenzy since the release of the widely popular Microsoft-backed OpenAI chatbot.

Quants’ focus on advanced artificial intelligence to aid decision-making comes amid a tough investment environment, as China’s post-COVID recovery wanes and competition rises in the country’s 20 trillion yuan ($3 trillion) private fund industry.

“ChatGPT is an epoch-making application … It can draw conclusions from a complicated network of relationships with numerous dimensions in ways human brains cannot,” said Steve Chen, partner of Shanghai-based MX Capital.

“Exploring its ability is now our main focus.”

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His hedge fund already uses ChatGPT to better understand a company’s fundamentals and avoid value traps, project earnings power, and identify investment opportunities and risks.

ChatGPT, trained using a huge amount of data, can write poems, compose music, draw paintings, and generate other strikingly humanlike responses based on user prompts.

A ChatGPT-like tool boosts quants’ ability to process text-related data, said Feng Ji, chairman of Baiont Capital.

“We were also inspired by ChatGPT to build large models using trading data, instead of text,” Feng said.

Feng’s hedge fund, backed by former Google China chief and AI veteran Kai-Fu Lee, has invested heavily in hardware to enhance computing power required for model-training.

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High-Flyer, among China’s biggest quant funds, has hailed advanced AI as the “greatest innovation of our times”.

In April, High-Flyer announced the setup of a research unit to explore disruptive AI technologies.

MACHINE VS MAN
Last week, Beijing-based asset manager Zhishan Investment said it would deploy AI robot “Cybertron” across all products and use it to help reshape its investment methodology.

Baiont Capital’s Feng is more ambitious, seeking to let robots take full control of the investment process – from data analysis and prediction, to decision-making and execution.

Feng’s Nanjing-based company uses high-frequency trading strategies and recruits only computer scientists, not Wall Street traders.

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Robots do a much better job than humans in forecasting share moves over the next hour as “machine learning is designed to make such predictions”, Feng said.

While ChatGPT-like tools have stirred excitement, the race to develop and adopt powerful AI services has also fuelled anxiety about privacy, safety and job security.

Regulators are looking for ways to tackle the impact of generative AI technology. In China, where technology giants such as Alibaba (9988.HK), Sensetime (0020.HK), and Baidu (9888.HK) have ramped up AI bets, regulators unveiled draft measures in April giving them greater oversight of the technology.

Larry Cao, senior director of research at CFA Institute, cautioned the technology could put at stake jobs of bankers and fund managers working in areas where data is easily accessible.

“If you’re an analyst just telling people the story that everybody is telling other folks, what’s your value-add? I can just ask ChatGPT, right?” said Cao, editor of a newly published handbook on how to apply AI and Big Data in investments.

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“The threat is real, but it’s not tomorrow.”

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Huawei says Chery’s Luxeed S7 delays will be resolved in April

Huawei says Chery’s Luxeed S7 delays will be resolved in April

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Huawei says Chery's Luxeed S7 delays will be resolved in April

 Huawei said that a shortage of semiconductors and factory relocation issues that had delayed production and deliveries of its Luxeed S7 sedan should be resolved from next month, local media outlet Cailianshe reported on Saturday.

It quoted Huawei managing director and chairman of its smart car solutions, Richard Yu, who was speaking about the issues surrounding Chery’s (CHERY.UL) Luxeed S7 sedan at an annual forum organised by the EV100 think tank.

Reuters reported in January that Chinese automaker Chery and another Huawei partner, Changan Auto (000625.SZ) had lodged complaints with Huawei over how production issues with a computing unit the tech giant manufactured had caused delays to deliveries of their flagship model.

The Luxeed S7 sedan – the first model for Chery’s Luxeed EV brand – had orders of about 20,000 as of Nov. 28. Luxeed said in January that buyers could be reimbursed by up to 10,000 yuan if they were unable to pick up the car as promised. The S7 is priced from 249,800 yuan ($34,716.62).

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The brand was only launched in November and had been much hyped by Huawei with Yu previously claiming the S7 would beat Tesla’s luxury Model S in performance and at a price lower than the Model 3.

Yu also told the EV100 forum that its autos business unit would likely turn a profit from April after losing billions of yuan in the past year, due to strong sales of mid to high-end models built by its partners.

Huawei launched its smart car unit in 2019 with the aim that it could become the equivalent of German automotive supplier Bosch of the intelligent electric vehicle (EV) era and supply software and components to partners.

But it is the only money-losing unit among Huawei’s main six and brought in only one billion yuan revenue in the first half of 2023, a fraction of the company’s 310.9 billion yuan total.

Last year, Huawei announced that it would spin the unit off into a new company which will receive the unit’s core technologies and resources and take investment from partners such as automaker Changan. 

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US investigating Meta for role in illicit drug sales

US investigating Meta for role in illicit drug sales

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US investigating Meta for role in illicit drug sales

US prosecutors in Virginia are probing whether Facebook-parent Meta’s (META.O) social media platforms facilitated and profited from the illegal sale of drugs, the Wall Street Journal reported on Saturday, citing documents and people familiar with the matter.

The prosecutors sent subpoenas last year and have been asking questions as part of a criminal grand jury probe, the report said, adding that they have also been requesting records related to drug content or illicit sale of drugs via Meta’s platforms.

The Food and Drug Administration has also been helping with the investigation, the newspaper added. It noted that investigations do not always lead to charges of wrongdoing.

The paper quoted a spokesman for Meta as saying in a statement: “The sale of illicit drugs is against our policies and we work to find and remove this content from our services”.

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“Meta proactively cooperates with law enforcement authorities to help combat the sale and distribution of illicit drugs,” he added.

The prosecutors’ office and a spokeswoman for the FDA declined to comment to WSJ.

Meta, the FDA and the Virginia Attorney General’s office did not immediately respond to a Reuters’ request for comment.

Meta’s president of global affairs, Nick Clegg, said on social media platform X on Friday that Meta had joined up with the US State Department, the United Nations Office on Drugs and Crime and Snapchat to help disrupt the sale of synthetic drugs online and educate users about the associated risks.

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Malaysia central bank says Google misquoted exchange rate a second time

Malaysia central bank says Google misquoted exchange rate a second time

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Malaysia central bank says Google misquoted exchange rate a second time

Malaysia’s central bank said on Saturday that Google had misquoted the ringgit’s exchange rate, undervaluing the currency against the dollar, and that it would seek an explanation from the tech giant.

The ringgit, which declined to a 26-year low last month, has weakened about 2.44% this year. Bank Negara Malaysia (BNM) has said the currency is undervalued and does not reflect Malaysia’s positive economic fundamentals.

The bank said in a statement that Alphabet Inc’s Google (GOOGL.O) published “inaccurate” information on Friday and had also done so on Feb. 6.

“As this is the second instance of misreporting, BNM will be engaging Google for an explanation of how the inaccurate reporting occurred and the corrective measures taken given that this is a recurring issue that has afflicted Malaysia and other countries in the past few months,” BNM said in a statement.

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It did not elaborate. Google was not immediately available for comment outside of U.S. business hours.

The search giant does not verify data provided by financial exchanges and other content providers, and disclaims any obligation to do so, according to disclaimers on its website.

Google quoted the ringgit at 4.98 to the dollar on Friday, BNM said, while the Malaysian currency’s weakest level on official data was 4.7075.

BNM quoted the ringgit at 4.7015 at 9 a.m. and 4.7045 at 5 p.m. on the onshore interbank market. For comparison, LSEG data used by many international market participants quotes a Friday close of 4.7020.

BNM Governor Abdul Rasheed Ghaffour said last week Malaysia’s government and central bank were taking coordinated action to further increase flows into the foreign exchange market to ensure the ringgit remains stable.

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