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Top hedge fund traders to start using AI, survey reveals

Written by Tue 17 Jan 2023

Nine out of ten hedge fund traders will start using artificial intelligence (AI) in 2023, according to a survey by Market Makers.

Analysis of the top 50 hedge funds showed that traders believe AI will help them achieve portfolio returns amid soaring interest rates.

“AI has the potential to fundamentally change the way investing works, and could solve a lot of the problems that have caused investors to lose money in the past,” said AI engineer, Matt Forbes.

Despite ethical concerns, hedge fund managers can benefit from using AI, as patterns and trends in their markets can be quickly identified and risk of human error can be reduced.

Market Makers’ survey found that AI is becoming increasingly commonplace at Jane Street, Barclays, HSBC, Apollo, and Bridgewater Associates.

“AI excels at one thing humans do poorly, that is pattern recognition. There would be no need to spend hours researching which currencies or stocks to trade. AI would decide everything for you, freeing up valuable time. It could also reduce any human biases in investing,” added Forbes.

In 2019, Microsoft invested $1 billion in OpenAI, which according to a press release by Market Makers could be ‘one of the shrewdest bets in tech history’.

Microsoft recently announced that access to OpenAI’s chatbot, ChatGPT, will be widened by adding the service to Azure cloud computing service.

“Even Google sees AI powered chatbots as a ‘code red’ for its search business,” said Mike Andrews, VP of Analytics at Market Makers.

As portfolios are set to surpass benchmark returns, hedge fund traders are off to a great start in 2023, with AI driving potential forward for even more success in the future.

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Written by Tue 17 Jan 2023

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