Source: Bertomeu, Lin, Liu & Ni (2025) — “The Impact of Generative AI on Information Processing: Evidence from the Ban of ChatGPT in Italy”
This is one of those risks that sounds abstract until you imagine explaining it after the fact. Then it suddenly becomes very concrete, very expensive, and very difficult to hide behind a slide deck.
When Italy’s data protection authority blocked access to ChatGPT in March 2023, it created something rare in social science: a clean natural experiment. A significant technology was abruptly removed from one group of users Italian financial analysts while remaining available to a comparison group foreign analysts covering the same firms. What happened next tells us something important about how embedded generative AI had already become in professional financial work. The researchers find that Italian analysts, following the ban, issued fewer earnings forecasts relative to foreign analysts covering the same firms. Their forecast accuracy also declined. The effect was stronger among analysts whose pre-ban reports showed evidence of AI-generated text, and among analysts with technical backgrounds — the ones who were presumably using the tools most heavily. First, the Italian analysts shifted toward relying more on industry-level information and less on firm-specific analysis. This is what you’d expect if the AI had been helping with the firm-specific legwork — pulling relevant data, synthesising disclosures — and removing it pushed analysts toward more aggregate, less labour-intensive approaches. Second, bid-ask spreads on affected stocks widened and investor reactions to earnings announcements became more pronounced.
In plain English, that is why the result matters beyond the chart. It changes where people should look, what they should question, and which comfortable assumption probably needs to be retired.
My takeaway: the danger is rarely the dramatic thing in the headline. It is the quiet gap between knowing a risk exists and assigning someone to do something about it. Very unglamorous. Very important.