AI, Investment Decisions, and Inequality

Using two large-scale experiments, we explore how generative AI shapes both overall performance and disparities in investment tasks. When investors are given AI summaries aligned with their sophistication, they become better at processing financial information and making investment decisions. Conversely, misaligned summaries generally have an adverse effect, suggesting AI’s ability to benefit investors hinges on personalization of information. We also show AI’s benefits accrue disproportionately to individuals with higher financial expertise, which stems from an inherent tradeoff between accessibility for less sophisticated investors and technical precision used by more sophisticated investors. Together, our findings suggest AI improves performance on investment tasks, on average, but also underscore the potential for these tools to widen rather than limit existing performance gaps.