Man is far from alone.
Many of the biggest hedge funds have been early adopters of AI and machine learning, even before LLMs gained widespread adoption.
Bridgewater Associates, the US hedge fund founded by Ray Dalio, launched a fund that used machine learning as the primary basis of its decision-making two years ago.
In 2018, Two Sigma hired Mike Schuster, an AI expert, from Google’s Brain team to lead the firm’s AI efforts.
Balyasny Asset Management, one of the largest hedge funds in the US, said recently that 95pc of its investment teams were using OpenAI. Agents are put to work analysing and synthesising tens of thousands of documents such as company filings, research and earnings.
The hedge fund has also used AI to automatically monitor and update the probability of merger and acquisition deals occurring and to analyse speeches made by central banks.
Balyasny said that AI had cut the amount of time it takes to work out the economic implications of the speeches from two days to 30 minutes.
Unsurprisingly, it’s not enough to have access to the latest and greatest models. It’s the proprietary data that give hedge funds the edge.
Anthropic announced a partnership with Man in February to deploy Claude across its investment process to extract new investment insights from data and speed up coding tasks.
However, this also poses a challenge for companies such as Man, which must try and integrate LLMs into their own highly advanced tech systems.
“LLMs are fantastic at using public knowledge. They may know the last 12 songs on the Taylor Swift album and how to solve a Rubik’s cube but they don’t know Man Group: our strategies, how much we trade or our databases or execution platform,” says Gary Collier, the chief technology officer of Man Group.
For the largest and most established hedge funds, people are still firmly in control.
However, Ahmad – who plans to launch a hedge fund with Rallies eventually – is a firm believer that AI-managed hedge funds are just around the corner.
“We are very bullish that eventually three or two years down the line, there are going to be hedge funds that are entirely run by AI that are provided with data and anything the models need which then go ahead and trade,” he says.
Forget the taxi driver. Perhaps the AI chatbot is the next font of all stock-picking knowledge.