Social Finance in the Age of AI: A Tale of Two Platforms
Abstract
This paper studies how investors use generative AI in discussions across two major investing social media platforms with distinct governance and user bases: Seeking Alpha and Reddit's r/WallStreetBets. We document sharp cross-platform differences in adoption and market outcomes. On Seeking Alpha, AI adoption arises when information is scarce or contributors cover unfamiliar stocks; it is associated with more informative retail order flows, reduced user disagreement, and narrower bid-ask spreads. On WallStreetBets, AI adoption rises following surges in retail buying and is linked to sentiment contagion. Adoption is also followed by higher abnormal trading volume and volatility, wider spreads, and lottery-like return distributions. These results indicate that the adoption of AI and its relation to market outcomes are shaped by the institutional and behavioral context in which it is deployed.