While Artificial Intelligence (AI) has become a powerful tool in the investment management industry, providing capabilities such as data analysis, portfolio management, and even autonomous decision-making, there are notable downsides and risks associated with relying too heavily on AI for managing investments. Here are some key concerns: 1. Lack of Human Judgment AI systems are designed to analyze vast amounts of data and identify patterns, but they lack the qualitative judgment and intuition that experienced human investors can provide. Human judgment often takes into account factors like geopolitical events, regulatory changes, and market sentiment, which may not be fully captured by AI algorithms. This can lead to decision-making that is too rigid or that misses important contextual nuances. Example: During the 2008 financial crisis, many quantitative models failed to predict the extent of the market downturn because they didn’t fully account for the human factors, such as fear and panic, that exacerbated the crisis. A purely AI-driven investment strategy could struggle in similar situations where human emotions play a significant role in market dynamics. 2. Overfitting and Model Risk AI systems, particularly those using machine