Introduction

Widespread AI adoption may eliminate market inefficiencies enabling alpha generation. Markets becoming increasingly efficient through sophisticated AI could make outperformance mathematically impossible.

Efficiency Arguments and Concerns

More sophisticated participants exploiting inefficiencies more efficiently reduces traditional alpha opportunities.

Counterarguments and Perspectives

New inefficiencies emerge from behavioral patterns; human behavior ensures persistent mispricings.

Long-term Implications and Outcomes

Outcome determines whether active management remains viable or index investing dominates.

Conclusion

Market efficiency evolution will fundamentally reshape financial competition.