59. AI Sycophancy - Trading's Emerging Risk

Traders are often seen as cynical and paranoid individuals. But what happens when their reliance on technology, like AI, leads them to reinforce their biases instead of questioning their strategies?As trading teams get smaller, and roles are replaced with automation, are the controls devised over many decades fit for purpose in the emerging world of Generative AI?In this episode Nic takes a look at Sycophancy, and asks whether peer review risks being replaced with supportive AI, leading to increased risk taking, based on flawed assumptions.The recent paper by MIT academics Kartik Chandra, Max Kleiman-Weiner, Jonathan Ragan-Kelley, and Joshua B Tenebaum provides a useful look at "Sycophantic Chatbots cause Delusional Spiralling, even in ideal Bayesians".More about SKADI:Website: www.skadilimited.comX: https://x.com/skadilimitedLinkedin: https://www.linkedin.com/company/skadi-limitedInstagram: https://www.instagram.com/skadilimited/