Morgan Stanley The company is expanding the use of OpenAI-powered generative artificial intelligence tools to its vaunted investment banking and trading division, CNBC has learned.
The company, which introduced an AI assistant based on OpenAI's ChatGPT technology to its wealth management advisors in early 2023, began rolling out another version called AskResearchGPT in its institutional securities group this summer, said Katy Huberty, global director of research at Morgan Stanley.
The tool allows users to extract answers from across Morgan Stanley's research universe – including on stocks, commodities, industry trends and regions – eliminating the otherwise arduous task of extracting insights from the more than 70,000 reports the bank produces annually .
“We see this as a game changer in terms of productivity, both for our research analysts and our institutional securities colleagues,” Huberty said in an interview. The tool helps employees “access the highest quality, most insightful information as efficiently as possible.”
Since its launch as a viral consumer app in late 2022, OpenAI's generative AI technology has been quickly adopted by Wall Street's biggest players.
Morgan Stanley says nearly half of its 80,000 employees use generative AI tools built with OpenAI, compared to its competitors JPMorgan ChaseAbout 60% of the company's 316,043 employees have access to a platform that uses OpenAI's models, said a person familiar with the matter who was not authorized to publicly disclose the figure. The San Francisco-based startup recently raised $157 billion in funding.
“OpenAI already has network advantages in the financial services sector due to its deep resources and early focus on banking use cases,” said Pierre Buhler, banking advisor at SSA & Co.
“In terms of market penetration, they are ahead of everyone else,” Bühler said. “But it is an emerging market and we are still in the early stages.” It is likely that OpenAI competitors such as Anthropic will become more important over time, he added.
Viral hit
At Morgan Stanley, a leader in global investment banking and trading, along with JPMorgan and Goldman SachsEmployees have gravitated to AskResearchGPT and are using it instead of calling or emailing the research department, Huberty said.
According to the bank, employees ask the tool three times as many questions compared to a previous tool based on traditional AI that has been in use since 2017.
It's most in demand among salespeople and other customer-facing employees who often answer questions from hedge funds or other institutional investors, Huberty said.
“We found that using AskResearchGPT it takes a salesperson a tenth of the time to respond to an average customer query,” she said.
Increased productivity
In a recent demonstration, the GPT-4-based chatbot was able to summarize Morgan Stanley's point of view on topics from copper to Nvidia to the intricacies of building a data center, understand industry jargon, and provide diagrams and links to source material.
The bank wants to push the rollout further given the productivity gains it has achieved, Huberty said. The tool is embedded in employees' browsers as well as Microsoft Teams and Outlook programs to make it easily available.
Huberty says she's understandably often asked whether AI could ultimately replace the analysts who produce the reams of research published under Morgan Stanley's banner.
“I don’t see a path in the near future to just letting the machine write the research report to generate the idea,” she said. “I really believe that it is the people who make the decision and are responsible for the relationship, which is a really important part of the analyst job, the sales and trading job or the corporate banker job.”