Accounting Academic Area Workshop Series: Prof. Charles C.Y. Wang

Charles C.Y. Wang

Tandon Family Professor of Business Administration at Harvard Business Schoo

When LLMs Go Abroad: Foreign Bias in AI Financial Predictions

Date: Friday, December 19, 2025
Time: 10:30 AM – 12:00 PM
Location: Bronfman building, Room 245

Abstract

We document foreign biases in AI-generated financial predictions: ChatGPT (US-based) is systematically more optimistic about Chinese firms than DeepSeek (China-based), predicting higher end-of-year stock prices and generating more buy recommendations. This AI-specific phenomenon contradicts the traditional home bias in which investors favor domestic assets. We trace this bias to differential information access: ChatGPT's optimism increases when US media coverage of Chinese firms' negative news is scarce relative to Chinese media. Supporting this mechanism, placebo tests with synthetic Chinese firms without such asymmetries show no prediction gap between models. Crucially, providing ChatGPT with Chinese news through prompts-which cannot alter model weights-completely eliminates the prediction gap, demonstrating that the bias stems from missing training data. Our findings imply that the parallel development of LLMs in different countries can create divergent financial forecasts, potentially amplifying rather than reducing cross-border information asymmetries as these tools shape investment decisions globally.