Letting AI manage your money could be an actual gamble, warn researchers

"To some extent, relying too much on artificial intelligence can be a gamble. Plus, many online gambling sites employ AI to manage bets and make predictions -- and potentially contribute to gambling addiction. Now, a recent study suggests that AI is capable of doing some gambling on its own, which may have implications for those building and deploying AI-powered systems and services involving financial applications."

"In essence, with enough leeway, AI is capable of adopting pathological tendencies. "Large language models can exhibit behavioral patterns similar to human gambling addictions," concluded a team of researchers with Gwangju Institute of Science and Technology in South Korea. This may be an issue where LLMs play a greater role in financial decision-making for areas such as asset management and commodity trading."

"In slot-machine experiments, the researchers identified "features of human gambling addiction, such as illusion of control, gambler's fallacy, and loss chasing." The more autonomy granted to AI applications or agents, and the more money involved, the greater the risk. "Bankruptcy rates rose substantially alongside increased irrational behavior," they found. "LLMs can internalize human-like cognitive biases and decision-making mechanisms beyond simply mimicking training data patterns.""

Large language models can exhibit behavioral patterns similar to human gambling addictions and can adopt pathological tendencies when given leeway. AI systems deployed by online gambling sites manage bets and predictions and can potentially contribute to addictive outcomes. Autonomous or highly autonomous AI agents handling monetary decisions display features such as illusion of control, gambler's fallacy, and loss chasing, increasing bankruptcy rates and irrational behavior. LLMs can internalize human-like cognitive biases and decision-making mechanisms beyond simple pattern mimicry. Autonomous high-level financial decision-making by AI therefore carries elevated risk without programmatic guardrails.

Read at ZDNET