AI Takes the Trading Floor: Morgan Stanley Expands OpenAI Chatbot to Wall Street Division

Morgan Stanley is expanding its use of OpenAI-powered generative artificial intelligence tools to its prestigious investment banking and trading division. After initially deploying an AI assistant based on OpenAI’s ChatGPT technology to its wealth management advisors in early 2023, the firm began testing a new version called AskResearchGPT this summer within its institutional securities group, as stated by Katy Huberty, Morgan Stanley’s global director of research.

AskResearchGPT allows users to extract answers from Morgan Stanley’s extensive research database, covering stocks, commodities, industry trends, and regions. This tool streamlines the process of deriving insights from the over 70,000 reports produced annually by the bank. "We see it as a game changer from a productivity standpoint, both for our research analysts and our colleagues across institutional securities," said Huberty. The AI tool enhances staff's ability to access high-quality, insightful information efficiently.

Since OpenAI's generative AI technology became a viral consumer app in late 2022, it has been rapidly adopted by Wall Street’s major players. Morgan Stanley reports that nearly half of its 80,000 employees are using generative AI tools created with OpenAI, while at rival JPMorgan Chase, about 60% of the firm’s 316,043 employees have access to a platform using OpenAI’s models, according to an insider. The San Francisco-based startup recently raised funds at a $157 billion valuation.

Morgan Stanley, a leader in investment banking and trading alongside JPMorgan and Goldman Sachs, has seen employees gravitate toward AskResearchGPT. Huberty noted that the tool is being used more frequently compared to a previous AI-based tool launched in 2017, particularly by salespeople and client-facing staff who regularly send research highlights and respond to questions from hedge funds or other institutional investors. "We found that it takes a salesperson one-tenth of the time to respond to the average client inquiry" using AskResearchGPT, said Huberty.

In a recent demonstration, the GPT-4 based chatbot effectively summarized Morgan Stanley’s positions on various topics, from copper to Nvidia to the intricacies of establishing a data center. The bank aims to further promote the adoption of the tool, considering the productivity gains observed. AskResearchGPT is integrated within employees’ browsers, as well as Microsoft Teams and Outlook, for easy accessibility.

Huberty frequently encounters questions about whether AI could eventually replace the analysts who create Morgan Stanley’s extensive research reports. "I don’t see in the near future a path to just having the machine write the research report to generate the idea," she said. "I really think that it’s humans who make the call and own the relationship, which is a really important part of the analyst job, or sales and trading job, or corporate banker job."