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Investing in the Age of Generative AI: A GPT-based Sentiment Analysis Approach
1  Information Technology & Decision Sciences Department, Old Dominion University, Norfolk, VA 23529, USA
Academic Editor: Thanasis Stengos

Abstract:

Generative AI, which ushers a new age of AI, comes with huge economic potential. AI startups, like OpenAI, Anthropic, and DeepSeek, and technology giants, like Google, Amazon, Microsoft, and Meta, compete in the Generative AI market. To not fall behind in the AI race, they have ramped up AI investment with massive capital spending. For example, on January 3, 2025, Microsoft announced that the company is on track to invest approximately USD 80 billion to build AI-enabled data centers to train AI models and deploy AI- and cloud-based applications around the world in fiscal 2025. Also, on January 21, 2025, an AI joint venture called the Stargate Project was created by OpenAI, SoftBank, Oracle, and MGX. The venture plans to invest USD 500 billion in AI infrastructure by 2029. On January 24, 2025, Meta announced that the company plans to build a massive data center in Louisiana to power its newest AI model. It would invest USD 60-65 billion into AI including the data center, which would be “so large it would cover a significant part of Manhattan”. To capitalize on the AI boom, investors are interested in trading AI stocks. AI chatbots, which can identify and classify sentiments from financial news, can be leveraged for investment. So, this paper proposes a GPT-based sentiment analysis approach for trading AI stocks. Also, natural experiments are conducted to evaluate its effectiveness. The initial results show that the approach achieves a good rate of return.

Keywords: AI Chatbot; Generative AI; Large Language Model; Financial Sentiment Analysis
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