When your software design is based on a simplistic revenue model of scraping asking rents, sharing competitor data, or attempting to optimize financial performance using a “stochastic parrot” – times are tough.
When you attempt to replace the deterministic reasoning of mathematical finance with a probabilistic AI text generator, NOI performance can get randomly unfavorable quickly.
F9Analytics assessment like those shared by Apple engineers in their research, “The Illusion of Thinking: Understanding the Strengths and Limitations of Reasoning Models via the Lens of Problem Complexity”, is that LLM’s cannot handle mathematical logic – aka finance.
As Apple passed on investing in OpenAI’s technology, so did those that were prudent enough to understand the stochastic nature of AI before investing significantly in R&D.
In the case of AvalonBay and Equity Residential our belief is that executives were similarly prudent and understood the impact of the new data restrictions imposed on legacy revenue management, limitations of AI, and the limited benefits it offered them to compete.
We also believe that executives at least partially understood through practice that attempting to use conversational AI (such as Elise AI) for anything other than customer journey, guided tours, or maintenance, generated at best random pricing that could not be trusted.
As the industry becomes more informed about stochastic large language models and their inability to the provide the deterministic solutions they seek, they will require specialized partners to solve what is known as AI’s “last-mile” challenge.
Explore how F9Analytics addresses AI’s last-mile challenge in the following video: Multifamily Pricing at Scale
To learn more about our operations research technology for real estate, please visit our website at https://www.f9analytics.com.
About F9Analytics
At F9Analytics, our commitment to research and development in real estate operations research has synthesized into the solutions we envisioned – ready to empower real estate companies with the necessary algorithms to leverage price to generate excess returns – be it in commercial or multi-family residential.
