PROGRAMMING NOTE

I’m back in Italy after two nice weeks in the States. I’m bleary-eyed today after taking an overnight transatlantic flight, so please forgive any typos. : )

PODCAST

Bleeding edge minus one.

That’s how James Corcoran, head of AI and analytics at STAC, describes how some financial firms are approaching AI adoption right now. 

In the latest episode of the Alpha Intelligence Podcast, Francesco and I talk with James about how STAC benchmarks the tech stack behind Wall Street’s AI infrastructure.

We cover:

• How the same model can behave differently depending on the hardware

• What it takes to move from flashy demo to real-world implementation

• Why backend infrastructure—not slick frontends—piques his interest 

• How compliance use cases might be the most underhyped area of AI in finance

James has a unique view into how AI is actually being deployed across global trading desks, compliance teams, and research groups. He’s also frank about what’s real, what’s hype, and what’s working. 

Listen here: YouTube, Spotify

HEDGE FUNDS

Man Group Uses AI Agents for Trading Signals

AI is helping the world’s largest listed hedge fund find new investment strategies.

From Bloomberg:

Man Group’s quant equity unit says it has begun using a new artificial-intelligence system that can generate, code and backtest trading ideas — marking the arrival of agentic AI at the world’s largest listed hedge fund.

Boston-based Man Numeric says it built the tool — known internally as AlphaGPT — to mimic how its researchers develop new investment signals. It digs into data for ideas, writes the code for potential strategies and then tests them on historic data. Such a system that can autonomously perform multi-step tasks is known as agentic AI, one of the hottest trends right now in Silicon Valley.

While humans still vet the outputs — and errors like hallucination remain a big issue — the firm says the goal is to automate more of the research pipeline and accelerate the discovery of smart, rules-based trades. Several dozen signals generated by the AI system have passed Man Group’s investment committee and are slated to be deployed in live trading, according to Ziang Fang, a senior portfolio manager.

…

“Given the breadth of the knowledge of the large language model, it can come up with a lot of stuff that we as human beings just for different reasons didn’t come up with,” Ziang Fang, a senior portfolio manager said. “It can spit out ideas like every two, three seconds without stopping, which is just impossible for humans to do.”

This approach reflects a broader shift.

Much of the early focus on AI in finance centered on helping fundamental investors. But in recent months, we’ve seen growing interest from quantitative hedge funds exploring probabilistic large language models.

Man Group is applying AI to rules-based strategies, aiming to preserve economic logic even as they scale idea generation. I reached out to the firm to understand how they’re managing this tension between black-box models and transparent investment processes.

A spokesperson told me:

Takeaway: Man Group’s AI agents mark a shift toward using LLMs not just for research support, but to autonomously generate and test trading strategies at a scale and speed humans can’t match.

ANTHROPIC

OpenAI Rival Anthropic Courts Wall Street

Anthropic is making a push into finance with new tools built to help analysts handle market research, due diligence, and investment memos, with major firms signing on.

The AI startup launched Claude for Financial Services, a software suite that connects its models to structured financial data from providers like FactSet, PitchBook, and Morningstar. The tools can draft investment memos, assist with portfolio analysis, and generate code for financial models.

Bridgewater, AIG, and Norges Bank Investment Management are among early users.

The offering is built on Anthropic’s new Model Context Protocol (MCP), a standardized way to connect third-party data with AI. Companies across industries have been quick to adopt MCP, which Anthropic says makes AI tools easier to use in real workflows.

The push comes as Anthropic’s annualized revenue jumped from $3 billion to $4 billion in a month, per Bloomberg.

Takeaway: Anthropic is betting that intuitive, security-conscious tools will be key to winning institutional users.

Related:

• OpenAI Rival Anthropic Courts Finance Industry With New AI Tools (Bloomberg)

Related #2:

• Bloomberg Terminal Adds Agentic AI with Anthropic Protocol

  • We've talked a few times about how, right now, connecting different AI tools to one sort of standardized platform hasn't really been done, but Anthropic, the company behind Claude, released MCP last fall, and more and more companies are adopting it, including Bloomberg, so it makes it a lot easier to just pull data, and you don't have to worry about it hallucinating. (Bloomberg)

AI EXPERTISE

This is not Wall Street related story but it had a great quote that stood out to me:

You could swap “this industry” for nearly any field that relies on professional expertise, and the quote would still hold up.

JOBS

AI Labs Raid Wall Street for Quant Talent

A 2017 academic paper helped spark today's AI boom. The research, published for free online on arXiv--which is kind of wild when you think about it having a trillion-dollar impact-- focused on more efficient and accurate ways to translate text. Rather than running computations sequentially, transformer technology runs them simultaneously. What started as a translation tool now writes code, analyzes data, and generates everything from emails to marketing copy.

AI is abuzz these days, but before ChatGPT hit the mainstream in 2022, telling someone you worked in ‘natural language processing’ was not great for cocktail conversations, as some experts have told me.

Quants suddenly find themselves at the center of the biggest talent war in tech and don’t have to accept a cut in pay to switch out of finance.

From: OpenAI and other AI players are targeting Wall Street's quant stars with multimillion-dollar paydays (Business Insider)

In May, a group of more than 20 finance whizzes from across the country descended on OpenAI's San Francisco HQ for what CEO Sam Altman cheekily called a "party." They sat through a presentation, mingled with researchers, and some received formal interview invites. A month later in New York City, Altman's team held another recruiting overture for quant trading professionals — the highly coveted mathematicians, physicists, data scientists, and engineers who power the world's top hedge funds and high-frequency trading firms.

Altman's pitch: Forsake Wall Street stalwarts like Citadel, D.E. Shaw, and Jane Street and join his $300 billion powerhouse's quest to build artificial general intelligence.

Much attention this summer has surrounded Mark Zuckerberg's extravagant recruiting blitz for top AI researchers for Meta. Offers in the tens of millions — in rare cases, north of $100 million — have stirred up FOMO across Silicon Valley.

AI labs, including OpenAI, Anthropic, xAI, and others, are also looking beyond competitors to staff up, increasingly hunting in Wall Street's backyard.

Takeaway: There aren’t enough experts to build on the frontier of AI, so cash rich startups can entice Wall Streeters to jump ship.

Related

• Hedge funds offer bumper pay to lure AI talent: ‘Million-dollar packages are not far’ (Financial News)

CALENDAR

Upcoming AI + Finance Conferences

I’ve put together a calendar of upcoming AI and finance conferences. Click on the image below to access links and event descriptions. Let me know if I’ve missed any and I’ll add them. Thanks!

WHAT ELSE I’M READING

• Are investors underestimating AI? (Franklin Templeton Podcast)

• Former Citadel Quants Raise $36 Million for Fixed-Income Fintech (Bloomberg) ← I hope to dig into this one more next week.

• Insights from the Citi Institute Future of Finance Forum (Citi)

• Lloyds Banking Group deploys first large-scale GenAI product Athena (FintechFutures)

• Fundamental and Quant Roles Converge as AI Tools Hit Investment Desks (FundFire) $

• AI Is Already Showing Signs of Slashing UK Job Openings (Bloomberg)

• Microsoft Touts $500 Million AI Savings While Slashing Jobs (Bloomberg)

• Goldman Sachs is piloting its first autonomous coder in major AI milestone for Wall Street (CNBC)

• If you’ve read this far down, how bout them Red Sox with a 10-game win streak? (Matt)