PokerStars Downgraded by Morgan Stanley as AI Causes Concern

1 month ago
PokerStars Downgraded by Morgan Stanley as AI Causes Concern
14:53
15 Sep

The computers aren’t just coming, they are already here – at least according to investment giants Morgan Stanley, who downgraded online poker companies including PokerStars this week due to worries about an Artificial Intelligence (AI) system that is stronger than human professionals…

The financial powerhouse reduced price targets on The Stars Group, GVC Holdings and Playtech due to ‘a reduced overall confidence in online poker [that] could pose a risk to earnings streams in the future’.

Morgan Stanley’s assessment of the online industry, as reported by Seekingalpha.com,  is based on the Carnegie Mellon University AI system, one that is "stronger than human professionals."

Poker players will already be aware that the Carnegie Mellon AI developers have proven their system better than top pros in very specific heads-up formats.


Now, however, the university AI team have produced an:

AI blueprint strategy … for a cloud-computing cost of just $144 in 8 days, runs on normal computers, plays twice as fast as professional players and could be adapted for any poker variant."

Claiming that the new code has not been released partly owing to the "serious impact" it would have on the integrity of online poker, Morgan Stanley’s team, headed by analyst Ed Young, has reduced the price targets on GVC Holdings and PlayTech, both London-traded, by 2% and 4%, respectively.

For The Stars Group, which owns PokerStars, the price target has gone from $17 from $18. The share price saw a small but sharp drop this morning before recovering.

Poker, especially No-Limit variants, was always considered to be a step too far for computers to ever solve, but recent years have seen Artificial Intelligence make great strides in changing that assessment.

Last year, HighStakesDB took a look at why AI is beating the human brain at poker, and you can read why that is here.


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Andrew from Edinburgh, Scotland, is a professional journalist, international-titled chess master, and avid poker player.Read more

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