Compound's Managing Partner drops a hard truth about AI alpha:
"I have seen nothing that shows me AI can think outside of distribution. By definition, through an AI model, you're getting the maximally obvious or maximally viable ideas."
Translation: AI can't give you edge. It regurgitates consensus. It can't spot the asymmetric bet everyone else is sleeping on.
If you're using AI to generate trade ideas or investment theses, you're literally trading the most crowded positions possible. Zero alpha.
Real edge comes from:
→ Off-chain intel
→ Contrarian positioning
→ Reading what the market isn't pricing in yet
AI is a tool, not a strategy. Don't confuse efficiency with edge.
"I have seen nothing that shows me AI can think outside of distribution. By definition, through an AI model, you're getting the maximally obvious or maximally viable ideas."
Translation: AI can't give you edge. It regurgitates consensus. It can't spot the asymmetric bet everyone else is sleeping on.
If you're using AI to generate trade ideas or investment theses, you're literally trading the most crowded positions possible. Zero alpha.
Real edge comes from:
→ Off-chain intel
→ Contrarian positioning
→ Reading what the market isn't pricing in yet
AI is a tool, not a strategy. Don't confuse efficiency with edge.