Bridgewater Associates, the world’s largest hedge fund, has expressed its admiration for OpenAI’s ChatGPT artificial intelligence tool and its investment capabilities. Greg Jensen, the co-CIO of Bridgewater Associates, recently revealed that ChatGPT successfully passed the firm’s investment associate test. Jensen compared the power of the AI chatbot to having millions of junior staff members working simultaneously.
Jensen, who has long been interested in AI, mentioned in an interview with Bloomberg that Bridgewater is now exploring the integration of machine learning AI into its trading strategies. The hedge fund has already experimented with bots like ChatGPT, and the results have been promising. ChatGPT 3.5, the most renowned version of the AI language model, scored at the level of a first-year investment associate, ranking in the 80th percentile among all test takers.
Despite a few imperfections, Jensen believes that ChatGPT’s performance reflects a significant amount of brainpower. He equated the AI tool’s capabilities to an army of investment associates. Jensen highlighted the potential of having numerous 80th percentile investment associates working together, aided by rigorous statistical backdrops to control errors and improve efficiency.
While ChatGPT may not replace human employees entirely in the foreseeable future, Bridgewater is actively working on a fund that primarily utilizes machine learning techniques. Jensen disclosed that the firm aims to enhance the bot’s predictive abilities by combining ChatGPT with other statistical and AI models. He emphasized the need for flexible generalists who can use various tools to achieve their goals.
Wall Street has been closely observing ChatGPT as a potential investment advisor; however, experts agree that more work is required to ensure the language model can provide reliable investment advice. Currently, the bot is only capable of generating first-level responses and lacks the ability to apply knowledge to specific situations, according to the CIO of Morningstar Investment Management.
In conclusion, Bridgewater Associates is impressed with ChatGPT’s investment acumen and is actively leveraging machine learning AI within its trading strategies. While there are still issues to address, the potential of having millions of AI-powered investment associates working together is a significant development in the financial industry. As Bridgewater continues to refine its approach, the combination of statistical analysis and AI models may reshape the way investment decisions are made.
