Investors Use AI to Analyze CEOs’ Language Patterns

CEOs and other managers are under the microscope as some investors use AI to learn and analyse their language patterns and tone.

In late 2020, according to language pattern software specialist Evan Schnidman, some executives in the IT industry were playing down the possibility of semiconductor chip shortages while discussing supply-chain disruptions.

All was fine, they said.

Yet the tone of their speech showed high levels of uncertainty, according to an algorithmic analysis designed to spot hidden clues in – ideally unscripted – spoken words.

“We found that IT sector executives’ tone was inconsistent with the positive textual sentiment of their remarks,” said Schnidman, who advises two fintech companies behind the analysis.

Within months of the comments, companies including Volkswagen and Ford were warning about a severe shortage of chips hitting output. Share prices in auto and industrial firms fell. IT executives now said there was a supply squeeze.

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