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Citadel’s Ken Griffin said he doesn’t think AI will shake up the investment business.
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Griffin said his hedge fund uses AI “a little bit.”
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AI works well in short-term trading but falls short when making long-term bets, Griffin said.
Ken Griffin, the founder and CEO of Citadel, said he doesn’t think AI will revolutionize the investment business.
“Do we use it in our investment business? A little bit, a little bit. I can’t say it’s been game-changing,” Griffin said in an interview that was published on the Stanford Graduate School of Business’ YouTube channel on Thursday.
Griffin was speaking to students as part of Stanford’s “View From The Top” interview series when he was asked how AI will affect Citadel.
“It saves some time. It’s a productivity enhancement tool. It’s nice, I don’t think it’s going to revolutionize most of what we do in finance,” Griffin added.
Griffin said generative AI models do not lend themselves well to investment analysis because they cannot make long-term forecasts.
“So machine learning models work really well with problems that are more static in nature. Reading a radiological report. But investing is about understanding how the future is going to unfold, and that’s where these models really struggle, right?” Griffin said.
“They work great in short-term trading, and short-term, I mean as in like the next five minutes. But when you think about the next year or two years, they really start to fall apart,” he continued.
To be sure, Griffin did not brush aside the impact AI could have on the world at large. In the interview, Griffin said AI is “going to change the world around you in a lot of profound ways.” He cited jobs such as working at a call center or translating documents disappearing as AI begins to take over these tasks.
“So machine learning is going to come with a cost to society, a cost that we need to understand. How do we help these people land on their feet so we don’t end up with a backlash against AI and machine learning,” Griffin said.
Griffin’s view of AI in his industry contrasts with that of many business leaders across industries, from e-commerce and retail to tech and banking. JPMorgan’s CEO Jamie Dimon has been more bullish on the impact of AI on his bank’s operations.
In April 2024, Dimon wrote in his annual letter to shareholders that JPMorgan envisions having generative AI “reimagine entire business workflows.”
“While we do not know the full effect or the precise rate at which AI will change our business — or how it will affect society at large — we are completely convinced the consequences will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years,” Dimon wrote.
