Case Studies: Applied AI in Investment Management

In a wide-ranging December 2024 interview with Bloomberg, the CEO of systematic investor AQR spoke of integrating Artifical Intelligence into his firm's investment process. For Asness, AI is 'annoyingly better' than humans at many tasks, and he sees it as a way to improve the firm's investment process. He envisions AI as being a far more dynamic approach than quant factor investing, and views the integration of AI and massive alternative data sets as an arms race that will intensify over time.

Goldman Sachs CEO David Solomon made remarks at the Cisco AI Summit in January 2025 about the immense capabilities and potential threats posed by AI. Solomon mentioned that AI can write '95% of an IPO prospectus accurately and people are required for the last 5% of the report — the only part that “matters”. Normally, the task of drafting an initial registration prospectus for an initial public offering known as an S1, took a six-person team two weeks to prepare. AI can complete this task “in minutes”.

The University of Chicago's Booth School of Business published a working paper in January 2025 that explores the use of AI in investment management. The paper, titled 'AI and Information Advantage in Investment Management', discusses the potential of AI to provide an information advantage to investors. When GPT-4o summarizes earnings calls to match investor expertise level, aligned AI increases one-year portfolio returns by 9.6% for more sophisticated investors and by 1.7% for less sophisticated ones, thereby widening the gap by 7.9%