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The Rundown

• Big Banks Highlight AI Progress in Q2 Results

• BNP Paribas Teams Up with Mistral AI for AI Solutions

• Vectara Raises $25M for Enterprise AI Models

• Arcee AI Raises $24M Series A For Small Language Models

• Biggest Banks Accelerate AI Hiring Despite Overall Slowdown

• Mortgage Lenders Face Checks on Automated Valuation Models

• AI for Work: Visits to ChatGPT Surpass Reddit

• One-Third of Asset Managers Actively Use AI: Study

• Related Reads

• AI Oddities: Facial Recognition for Birds

BANK AI UPDATES
Big Banks Highlight AI Progress in Q2 Results

The biggest banks provided updates on their AI progress when reporting mostly positive second-quarter results. Here are the highlights:

$BAC

Bank of America CEO Brian Moynihan highlighted that the lender is increasing its technology initiatives, expecting to spend nearly $4 billion on technology this year, with a focus on artificial intelligence for both clients and employees.

The tech is boosting client engagement. “We've delivered more than 6 million insights year to date to our financial advisors, providing them proactive reasons to engage with clients." AI has evolved from primarily cost-saving applications to now enhancing the quality of customer interactions, per the CEO.

$WFC

Wells Fargo is now using AI in marketing, credit decisions and data provision so that bankers have access to information about "what customers could be willing or might be willing to entertain a discussion about,’’ CEO Charlie Scharf said.

The bank’s AI-powered virtual assistant has seen significant adoption in its first year with "nearly 15 million users and over 117 million interactions."

$GS

Goldman Sachs is leveraging both traditional AI and generative AI across various businesses to enhance productivity and client services. CEO David Solomon highlighted several use cases, including improving equity research, investment banking, data analysis, and software engineering.

"If you look and you think across the scale of our business I think you can think of lots of places where the capacity to use these tools to take work that's always been done on a more manual basis and allow the very smart people to do that work to focus their attention on clients are quite obvious,” CEO David Solomon said.

$MS

Morgan Stanley’s Ted Pick briefly mentioned AI applications in the context of enhancing productivity and client services. "AI tools are helping advisors grow, and wealth management's partnership with institutional securities is increasing connectivity around our workplace offering." READ MORE: Morgan Stanley's AI Boost

$BLK

BlackRock CEO Larry Fink highlighted using AI in equity strategies. "One of the big opportunities I see is going to be in systematic equities, where we've had now a 10-year track record of approximately 90% outperformance,” he said. “More and more investors are looking at how you can use AI for investments and we have one of the finest platforms utilizing AI, utilizing big data.”

$C

Citigroup CEO Jane Fraser briefly mentioned the tech on the bank’s earnings call. “We're using some great AI and other data tools that are helping to identify anomalies in data and data flows much quickly.”

ICYMI: Citi’s recent report on AI anticipates the tech could drive banking industry profits up by 9% to $2 trillion by 2028 through productivity gains, automating routine tasks, and freeing up employees for higher-value work.

PARTNERSHIPS
BNP Paribas Teams Up with Mistral AI for AI Solutions

The French bank has entered into a multi-year partnership with Mistral AI, encompassing all of the French AI giant's commercial models, according to a press release. The bank's global markets unit has been testing Mistral AI's models since last year, yielding "strong results."

This new agreement gives BNP Paribas access to both current and future commercial models across all its business lines. Using Mistral’s Large Language Models, the bank is already developing numerous use cases in customer support, sales, IT, and other areas.

Mistral AI, founded by former Google Deep Mind and Meta AI scientists, is positioned as a European rival to OpenAI and has raised over EUR1 billion, with BNP Paribas among its investors. The AI company claims its offerings and strategy are well-suited for highly regulated institutions.

Big Picture: Banks Favor Cheaper AI Models Amid Rising Costs

Meta’s Llama model, maxing out at 70 billion parameters, is significantly cheaper to run than OpenAI’s GPT-4, which has 1.8 trillion parameters. This cost efficiency has led banks like Wells Fargo, Citi, and Goldman Sachs to adopt Llama, according to Evident Insights.

As AI costs continue to rise faster than revenue, banks are increasingly opting for smaller, more affordable models.