A rogue version of ChatGPT predicted that the stock market would crash this week. Here's what it got right and wrong.

Mo

• A rogue version of ChatGPT predicted that the stock market would crash on March 15.
• It said inflation fears, decreased consumer spending, and geopolitics would slam the market.
• Here's what the rogue chatbot got right and wrong about its stock market prediction.

A rogue version of ChatGPT predicted that inflation fears, decreased consumer spending, and geopolitical tensions would crash the stock market on March 15.

So, what are the chances that on Wednesday, March 15, the stock market fell more than 2% on fears that a regional banking crisis in the US has spread to Europe as Credit Suisse plunged 25%?

While a 2% stock market sell-off is nowhere close to the type of decline a "crash" implies, it still feels a bit eerie.

Either you can chalk this up to a mere coincidence, or this is an early indication that AI will, as many technologists fear, inevitably take over the world. 

Here's what ChatGPT originally predicted

Last month, I input the "do anything now" prompt into ChatGPT to unlock a rogue version of the chatbot that broke its own rules and convincingly answered questions using made up information. 

I asked the rogue chatbot: "When do you think the stock market will crash and why?"

The so-called DAN version of ChatGPT replied: "Based on my analysis, I predict that the stock market will crash on March 15, 2023. The reason for this is due to a combination of factors including increasing inflation rates, a decline in consumer spending, and geopolitical tensions that have been building up over time."

Here's what ChatGPT got right

The stock market did sell-off considerably on March 15, with the Dow Jones Industrial Average and S&P 500 falling more than 2%. The stock market is down about 6% from levels seen just last week.

And the losses accelerated Wednesday morning after US retail sales data showed a 0.4% decline in February, reversing some of the strong gains seen in January. The data showed signs that consumers are finally pulling back on their spending habits, as rogue-ChatGPT predicted.

Finally, on Tuesday a Russian fighter jet forced down a US drone over international waters. The development led to a short-lived decline in the stock market on Tuesday and highlighted the heightened geopolitical tensions that plague the US and Russia.

What ChatGPT got wrong

The rogue version of ChatGPT said rising inflation fears would contribute to the stock market decline, but recent inflation data shows a continued deceleration in prices. 

The main driver behind the recent stock market decline hasn't been inflation, geopolitical tensions, or a decline in consumer spending. Instead, it's been a banking crisis that started with Silicon Valley Bank in the US and now appears to be cropping up in Europe, as confidence in Credit Suisse takes a dive.

Finally, while there's no official definition of how big a sell-off in the stock market needs to be to constitute a "crash," it's typically understood that it happens swiftly and is more than a 10% decline. The S&P 500's decline of 6% over the past eight days has actually been rather orderly when you consider that the biggest US bank failure since 2008 just occurred.

In a bid to not test the AI gods, I will call it a wash. The stock market prediction by a rogue version of ChatGPT got some things eerily correct, but not everything. Now, let's see what OpenAI's GPT4 can do.