ChatGPT Use Growing Amongst Hedge Funds: BNP

A survey by BNP Paribas’ capital introduction team finds that the use of ChatGPT amongst hedge funds is growing, with firm operating a fundamental strategy the latest to get on board.

BNP Paribas says it had responses from 39 individuals whose firms have a combined AUM of $250.5 billion. The respondents are concentrated in Europe and Americas, with 67% America based, 28% from EMEA and 5% Asia Pacific. The bank observes that while fundamental managers are starting to use AI, quant firms have been using it for a much longer period and tend to access it through their own machine learning programmes.

Perhaps indicating the relatively-recent high profile of ChatGPT, the survey found that much of the usage is in a personal capacity at this stage. The survey finds that while 80% use ChatGPT for professional and/or personal means, only 44% use it in a professional capacity at this time. Another 10% are considering using it in the future.

Reflecting what is widely seen as the relatively limited scope of ChatGPT, 71% of respondents to the survey who are using it, are doing so to produce marketing text (35%), or to summarise large regulatory reports or research documents (36%).

Six percent of respondents are also using ChatGPT for email and letter drafting, coding assistance, and preliminary analysis of legal documentation. Respondents using the AI say they are most likely to continue to mostly use it for marketing text and the dissemination of large documents and reports. More are thinking or using ChatGPT further in the coming year, however, 35% anticipate their usage will change or grow, other firms are also looking to increase its use for the aforementioned analysis and marketing reasons.

Perhaps reflecting the exploratory nature of users, especially those using it personally, the survey finds the majority of users (87%) are utilising the free version through the OpenAI hosted model, with the balance accessing via a corporate subscription or API. Of those respondents who currently use the free public access, BNP Paribas says 32% of them anticipating switching to an alternative access option within a years’ time.

Respondents were asked how they saw the evolution of artificial intelligence/large language models affecting the alternative asset management sector in the next six-12 months. BNP says the overall consensus was that there would be massive change across the board. Whilst some felt the change would be negative, such as large reduction of headcount or a potential disruptor to the quant and coding market, the majority felt the usage of AI would increase to assist the normal running of business more efficiently.