According to reports from Mint, The Economic Times, and LinkedIn, Zerodha founder and CEO Nithin Kamath believes artificial intelligence offers an edge in trading, but cannot generate alpha in markets. In his latest social media post on X, Kamath explained that AI can make investors more disciplined, but not smarter. As reported by Mint and The Economic Times, Kamath stated that 'As long as there's a human in the loop, you're still dealing with the same creature driven by fear and greed, and that human will keep making the same mistakes.' His latest remarks come at a time when AI-driven trading tools, signals and automation platforms are gaining popularity among retail investors, often marketed as a way to improve returns or identify opportunities faster than traditional methods. However, Kamath drew a clear distinction between using AI as a profit-generating engine and using it as a behavioural tool.
As reported by Mint, The Economic Times, and LinkedIn, Kamath described AI as a tool to help investors behave better during market volatility rather than generating returns. According to his social media post, 'What it can do is help you build and test strategies, then execute them systematically, removing emotion from the equation. That means fewer panic sells, less revenge trading, and more consistency.' However, Kamath emphasized that 'What it can't do is turn a bad strategy into a good one or create a magic money tree.' He cautioned that technology cannot compensate for flawed thinking, explaining that 'A weak or poorly designed strategy will not become profitable simply through automation or AI support. In other words, AI cannot create an edge where none exists.' The LinkedIn post attracted 69 comments from traders, investors, AI engineers, and others who generally agreed that AI cannot beat market returns driven by human biases.
According to Mint, The Economic Times, and LinkedIn reports, Kamath highlighted that significant informational edges may no longer exist in markets due to widespread pricing. As reported, 'People making consistent money in markets are high-frequency trading firms, market makers, prop desks, etc. that have built infrastructural and data moats over the years, with significant investment of time and capital. Those are real edges.' The LinkedIn discussion noted that '652' comments from traders suggested that 9 out of 10 retail traders in India lose money, highlighting the competitive challenges in retail trading. The LinkedIn reports indicate that Kamath's social media post attracted 69 comments from traders, investors, AI engineers, and others who generally agreed that AI cannot beat market returns driven by human biases.
According to The Economic Times and LinkedIn, Kamath pointed to a more fundamental constraint, the absence of a sustainable informational edge in modern markets. He argued that most publicly available information is quickly priced in, making it difficult for individual traders to consistently outperform. Even in cases where inefficiencies exist, assuming that markets are efficient remains a safer operating principle. As reported by The Economic Times, Kamath emphasized that trading outcomes are still largely shaped by human behaviour, with fear and greed continuing to drive actions despite rapid advancements in AI tools. The LinkedIn discussion highlighted that 'most people want AI to predict the market, but the real problem is usually not the chart — it's the trader behind the screen. Fear, greed, impatience, and overconfidence destroy more portfolios than lack of information ever will.'
