Do you buy the idea of an AI financial advisor?

This week, The Prompt looks at the role of genAI in giving financial advice and the rise of AI companions in China. [Read from your browser]( The Prompt 🤖 Welcome to the second edition of The Prompt! Delivered every fortnight, this free newsletter breaks down the biggest stories and trends in AI. Get all our content, including The Prompt, by [registering for a Tech in Asia account](. Alternatively, [sign up here]( if you just want to receive this newsletter. IN FOCUS In today's newsletter, we look at: - [A bot for your money? Wealthtech firms divided on tapping genAI for investment advice]( - [The hidden workforce that is making AI seem more advanced]( - The drawbacks of having an AI friend --------------------------------------------------------------- Hello {NAME} We are in the midst of an AI revolution that will gradually impact every aspect of our lives, much like how the internet boom transformed our way of living starting in the 1990s and 2000s. But how far will we allow AI to influence our lives? Can we trust it to manage our hard-earned money? Personally, I prefer to do my own research before making any investment decision. However, the rise in the number of AI-powered investment apps indicates a growing base of new investors who use these services when making investment decisions. Our Big Story in the second edition of this new AI newsletter - written by my colleagues Melissa and Simon - precisely explores how generative AI could influence the investment advice we receive and the follow-on investments we make. It also shows how wealthtech will be another area where AI will have an impact. Both startups and major banks are deeply invested in this concept and have been developing models to provide wealth management advice. One startup, Pi, gives advice based on an analysis of news, financial data, stock performance, and a person’s existing investments. JPMorgan, too, plans to broaden the use of its generative AI tool, Moneyball, to flag questionable decisions made by investment managers, such as selling top-performing stocks too early. Conversely, some believe that generative AI cannot yet be applied to financial advice and that the models need to be developed further. In other news, AI is also gaining popularity in China as a means of companionship. In the Hot Take this week, I examine the potential concerns associated with such friendships. -- Samreen  --------------------------------------------------------------- THE BIG STORY [A bot for your money? Wealthtech firms divided on tapping genAI for investment advice]( A genAI-powered investment platform can tell you why you should buy a particular stock. But some think taking its advice is a bad idea.  --------------------------------------------------------------- THE HOT TAKE GenAI companion apps bring us closer to the realities of the movie Her Here’s what happened: - Chinese technology giants including Baidu, Tencent Holdings, and ByteDance are adopting generative AI to create [virtual companions]( for those feeling lonely in the country. - Baidu has launched AI chatbot Xiaokan Planet, while Tencent owns Zhumengdao. ByteDance also released its Maoxiang chatbot in March. - These allow users to engage with digital companions ready to respond to them at any moment. Here’s our take: Since the launch of ChatGPT in 2022, the concept of [virtual friends]( has become alluring for some. This trend is perhaps unsurprising, given that Open AI CEO Sam Altman is famously [obsessed]( with the film Her. In China, one virtual companion firm that is currently on top is Xiaoice, which was spun off from the Microsoft R&D team for AI products. Xiaoice’s X Eva app has reached 12.4 million downloads. Among local competitors, ByteDance’s Maoxiang app ranks fifth in downloads, while Tencent’s Zhumengdao holds the seventh spot. Baidu, however, does not appear in the top 15 rankings by market research firm QbitAI. These apps offer basic features for free but require paid subscriptions for benefits like faster response times. Liu Mengyuan, an analyst at QbitAI, noted that AI companions appear to be the hottest trend, saying they have "the clearest revenue source" at present. Revenue is the key here, as many generative AI applications and integrations are currently available for free. However, it is unclear how much these AI bots charge for subscriptions. In India, this trend goes beyond the youth. India-based [GenWise has built a bot]( called AI Companion, which provides emotional support and uplifts older adults experiencing loneliness or isolation. In the US, such apps are rising in popularity too. A [report by VC firm]( Andreessen Horowitz showed that eight out of the top 50 new generative AI apps were companionship apps. The keyword “AI girlfriend” is [searched 135,000 times per month]( in the US. Apps such as Replika, which lets users create a digital avatar with the name or gender of their choice, have gained over [2.5 million users]( globally, including in the US. While these apps promote themselves as solutions for loneliness, increasing reliance on AI companions could disconnect people from reality and exacerbate the problem. Their bots also lack emotional intelligence, as these platforms rely on stored data for responses. This could pose risks, particularly for individuals with serious mental health concerns. While AI companions can enhance companionship and even extend into dating apps in the future, much thought needs to be put into how they can be used carefully.  --------------------------------------------------------------- DEEP READS Check out these interesting reads about AI: 1️⃣ [AI’s return on investment]( While there is a mad rush to adopt generative AI, most companies lack a clear vision for how to use it and how it would enhance their offerings. Unless businesses figure out this part, the boom might fizzle out. 2️⃣ [The hidden AI workforce]( Several employees on the brink of losing their jobs to AI are being asked to work alongside the very robots replacing them in a bid to add a touch of humanity to the algorithms. This hidden workforce is making AI seem more advanced than it truly is. 3️⃣ [Plowing an AI field for farmers]( India's public service broadcaster Doordarshan, is now using two realistic AI avatars to deliver news to farmers. These virtual anchors, Krish and Bhoomi, will soon be multilingual and provide weather forecasts, commodity prices, and farming trends to farmers through Doordarshan's Kisan channel.  --------------------------------------------------------------- EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Tech in Asia Conference Kuala Lumpur 2024 : Malaysia on The Rise on 24 - 25 July]( Join us for Investor Hour, a bespoke 1-1 networking mixers for founders to explore opportunities, get advice, and connect in-person with the right audience. This program offers a unique platform for founders to: - Open doors to the right investors - Receive personalized feedback and advice - Increase your visibility and credibility Hurry, applications close on June 28. [Apply for Investor Hour today]( [Product Development Conference (Jakarta, 25-26 June 2024)]( The countdown is on! PDC kicks off in just a few days and tickets are flying off the shelves. Don’t just talk about innovation, experience it firsthand on June 25-26. P.S. We’ve got less than 50 tickets left on Pro Pass; General Pass are selling out real soon. Hurry and get yours before they’re gone! [Tech in Asia’s Founders Meetup in Malaysia on July 25]( Double the excitement awaits as Founders Meetup returns to Malaysia, this time in conjunction with the closing party of TIA Conference KL! It's the perfect opportunity to unwind, network, and connect with fellow founders, startup leaders, and investors. Hurry, [get your early bird ticket]( before the promo ends on June 28! [Tech in Asia Conference Jakarta on Oct 23-24]( Where is the next Silicon Valley? It might just be Jakarta! Indonesia's young tech talent is booming, and Tech in Asia Conference Jakarta puts you right in the center of the action. Join us at #TIAConferenceJKT to connect with 4000+ region's brightest minds, 150+ hottest startups, and hear straight from 80+ experts. Early-bird tickets are now available! [Snatch the 75% discount while it lasts!]( --------------------------------------------------------------- That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter [here](. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you soon! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center](. 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