Hedge funds and money managers are increasingly utilizing OpenAI's ChatGPT for marketing purposes and to summarize extensive documents such as regulatory filings or broker research reports, according to a survey conducted by BNP Paribas (OTC:BNPQY) SA. The report revealed that 44% of money managers professionally deploy the AI tool, with some expressing an interest in employing ChatGPT to analyze legal documents. This trend highlights the growing value of generative AI tools among financial professionals, allowing them to automate tasks and streamline operations.
Prominent firms are embracing this technology, with Citadel's Ken Griffin announcing negotiations for an enterprise-wide license to use ChatGPT, expecting it to automate a significant amount of work. Man Group, a leading hedge fund, is using the tool to detect patterns in academic papers and considering its application for investor relations tasks. However, some challenges remain, as OpenAI's Chief Technology Officer, Mira Murati, warned that ChatGPT may occasionally generate incorrect information.
The implications of this technology are vast, with money managers predicting massive changes in the industry within the next six to 12 months. This includes potential workforce reductions and disruptions in the quantitative analysis and coding market. On the positive side, managers see AI as a tool to enhance efficiency and competitiveness, especially for smaller funds, by enabling them to rival larger organizations.
The survey by BNP offers a compelling snapshot of the evolving relationship between AI and the asset management sector. With 39 respondents representing firms with a combined $250.5 billion in assets under management, and nearly 70% hailing from the U.S., the adoption of AI, particularly in quant firms, is becoming a defining feature of modern investment strategy. The integration of tools like ChatGPT is a testament to the transformative role AI is playing in financial management.
This article was originally published on Quiver Quantitative