Finance Seminar Lin Peng

The paper looks at how generative AI is used in financial discourse on social media and how it relates to economic outcomes, comparing across two social platforms: Seeking Alpha, which operates under editorial oversight, and Reddit's WallStreetBets, which has little moderation. On Seeking Alpha, AI use is concentrated among non-native English speakers and authors covering unfamiliar firms, and AI-assisted articles' sentiment predicts future returns while bid-ask spreads narrow afterward. On WallStreetBets, AI use instead rises after surges in retail buying, the content is more emotionally charged, and it tends to precede higher volatility and more lottery-like price swings.

AI's effect on markets is influenced by the platform's governance and user base.

Takeaway: AI tools can further enhance knowledge and information efficiency or create additional noise, depending on where and how they're being used.