(Bloomberg) -- Whether firms are investing in AI infrastructure or using it to trim fat out of their businesses, the message from some of the world’s top financial executives: Jump in or lose out.
Every firm that Iconiq Capital invests in is embracing AI, according to partner Michael Anders. Goldman Sachs Group Inc. Chief Information Officer Marco Argenti said the bank’s private wealth division is using AI to evaluate portfolios and analyze dozens of underlying positions. Bridgewater Associates is already seeing comparable returns to the firm’s human—led strategies from a fund that uses machine learning and AI to make decisions.
Their comments this week at the Bloomberg Invest conference in New York underscore how financial firms are betting on the technology to improve productivity and generate returns. As they’ve scaled up their efforts amid OpenAI’s roll out of ChatGPT and the advent of cheaper model DeepSeek, that has also raised questions about potential job cuts and the technology’s broader ramifications for society.
Firms that are slower to adopt AI may find themselves at a “competitive disadvantage,” said International Business Machines Corp. Vice Chairman Gary Cohn, a former Goldman Sachs Group Inc. chief operating officer and president.
“The amount of CEOs that are using AI continues to grow, but more importantly they actually know what they are going to use it for,” Cohn said. “The definitional outcomes of where AI can enhance your business have become clearer.”
Others are seeing opportunity in the broader AI ecosystem. HPS Investment Partners governing partner Purnima Puri said her team was looking at a data-center investment in northern Virginia this week. Digital AI is among the five megatrends that Yup Kim, chief investment officer at the Texas Municipal Retirement System, is tracking.
‘Report Card’
Knighthead Capital Management co-founder Tom Wagner said his firm is developing a large project in Pennsylvania to decommission a coal-fired power plant and build “new generations to serve the data-center community,” with a substantial component devoted to AI computing. AI could lead to people having more free time, and perhaps even “a four-day work week,” he added.
Blackstone Inc. President Jon Gray is sticking by his firm’s giant bet on data centers to power AI and daily life. “We’re going to use these bots to help us do so many things,” he said.
Iconiq’s Anders said his firm keeps an AI report card on its companies to see how the migration of AI into its “DNA” is going. Still, of the thousands of companies his firm has looked at, Iconiq has written 12 checks to AI companies, he added.
“We have got to where these machines are able to think and reason, and pretty soon they will be able to act,” Anders said, also noting the secondary consequences of AI and how it will affect employment.
Global banks could cut as many as 200,000 jobs in the next three to five years as artificial intelligence encroaches on tasks currently carried out by human workers, according to a January report by Bloomberg Intelligence.
Bin Ren, founder and chief executive officer of SigTech, said even with AI, “the human will stay in the loop for the foreseeable future.” He added that financial firms are being “very cautious” with the technology. Revenue of AI is being discussed not in billions but in percentage points of global gross domestic product, he said. Goldman’s Argenti also said AI is an “accelerant” for people, who remain the “key and the center.”
Bridgewater CEO Nir Bar Dea said a fund it launched last year that uses machine learning and AI to make decisions has delivered performance that’s “comparable” to the firm’s human—led strategies. But outcomes from using the technology are hard to predict, he added.
“It’s a fool’s errand to predict exactly what is going to happen,” he said. “What we do at Bridgewater, we try to be practitioners. So get your hands dirty, understand the technology deeply and then prep yourself for a wide range of outcomes.”
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