Hedge fund mogul Griffin: Generative AI finds it hard to discover Alpha, and hedge funds struggle to outperform the market with it

Wallstreetcn
2025.10.16 08:45
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Billionaire Ken Griffin stated at the JPMorgan Robin Hood Investors Conference that generative AI has failed to help hedge funds achieve excess returns and has had a limited impact on the industry. He believes that the technology has limitations in identifying investment opportunities and has not demonstrated revolutionary value. Despite his cautious stance on AI, Griffin acknowledged its role in driving corporate technology investments and improving operational efficiency, but it still struggles to deliver on promises in financial market strategies

Billionaire Ken Griffin stated that generative artificial intelligence has not yet helped hedge funds achieve excess returns and has not had a substantial impact on the industry.

According to media reports, Griffin said at the JPMorgan Robin Hood Investors Conference held in New York on Wednesday that while generative AI has clear value in enhancing productivity, it has underperformed in discovering alpha (excess returns). According to attendees, this technology has not replaced meaningful research work within Citadel.

Griffin founded Citadel in 1990, and the company currently manages assets totaling $69 billion, having grown into an industry giant, with trading teams investing across multiple asset classes.

These remarks highlight the divergence among Wall Street's top investors regarding the practical application of AI technology. Despite the tech industry's high hopes for generative AI, this technology seems to struggle to deliver on its promises in the hedge fund sector, which heavily relies on information advantages.

Doubts About the Value of AI Technology

Griffin believes that generative AI is unlikely to bring about widespread transformation; its impact, while present, will not be profound and will disproportionately affect different industries. Griffin has previously expressed skepticism about AI technology. He has referred to AI as a limited tool in the field of investment analysis and downplayed the likelihood of technology replacing human jobs in the short term.

At this conference, attendees reported that Griffin emphasized the limitations of generative AI in discovering investment opportunities. For hedge funds like Citadel, which rely on in-depth research and trading strategies, this technology has yet to demonstrate revolutionary value.

Despite his cautious stance on the role of AI in the investment field, Griffin acknowledged that the technology is driving U.S. companies to increase their technology investments and elevating the status of chief technology officers. He pointed out that the AI boom has enabled companies to achieve business advancements that should have been completed over the past 25 years. This indicates that the value of generative AI lies more in enhancing operational efficiency rather than providing strategic advantages in financial markets.

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