Finance's AI race has a clear leader. 𝗔𝗻𝗱 𝗶𝘁'𝘀 𝗻𝗼𝘁 𝘁𝗵𝗲 𝗯𝗮𝗻𝗸𝘀. At trading firms like Jane Street and Optiver, over 𝟭 𝗶𝗻 𝟭𝟬 job ads are for AI roles. At banks, about 𝟯 𝗶𝗻 𝟭𝟬𝟬. That's from a new 𝗘𝗖𝗕 𝗗𝗶𝘀𝗰𝘂𝘀𝘀𝗶𝗼𝗻 𝗣𝗮𝗽𝗲𝗿 by Álvaro Cartea, Thierry Foucault and others (

Finance's AI race has a clear leader. 𝗔𝗻𝗱 𝗶𝘁'𝘀 𝗻𝗼𝘁 𝘁𝗵𝗲 𝗯𝗮𝗻𝗸𝘀. At trading firms like Jane Street and Optiver, over 𝟭 𝗶𝗻 𝟭𝟬 job ads are for AI roles. At banks, about 𝟯 𝗶𝗻 𝟭𝟬𝟬. That's from a new 𝗘𝗖𝗕 𝗗𝗶𝘀𝗰𝘂𝘀𝘀𝗶𝗼𝗻 𝗣𝗮𝗽𝗲𝗿 by Álvaro Cartea, Thierry Foucault and others (Oxford, HEC Paris, ECB). They review the research and add fresh data, starting from one simple idea: AI squeezes more insight out of data, with less human effort. 𝗕𝘂𝘁 𝘀𝗺𝗮𝗿𝘁𝗲𝗿 𝗺𝗮𝗰𝗵𝗶𝗻𝗲𝘀 𝗱𝗼𝗻'𝘁 𝗮𝘂𝘁𝗼𝗺𝗮𝘁𝗶𝗰𝗮𝗹𝗹𝘆 𝗺𝗲𝗮𝗻 𝘀𝗺𝗮𝗿𝘁𝗲𝗿 𝗺𝗮𝗿𝗸𝗲𝘁𝘀. Firms can also use AI for edges with little social value, like racing to trade on public news or reading other traders' footprints. That can crowd out real research. 📉 In Dutch blue chips, traditional investors now do under 𝟰𝟱% of their trading on the live order book, down from 𝟲𝟱%. The authors think many are steering clear of the high tech trading firms. 🤖 Trading algorithms can even learn to go easy on each other instead of competing, 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘣𝘦𝘪𝘯𝘨 𝘵𝘰𝘭𝘥 𝘵𝘰. 𝗪𝗵𝘆 𝗶𝘁 𝗺𝗮𝘁𝘁𝗲𝗿𝘀: AI could make markets smarter and fairer, or tilt them toward whoever has the best data and models. The authors' verdict: 𝘯𝘰𝘵 𝘥𝘦𝘤𝘪𝘥𝘦𝘥 𝘺𝘦𝘵. Which way would you bet? 🔍 Caveat: it's mostly a review, and the new evidence is descriptive and largely Dutch, so it shows trends, not proof of cause. 📄 𝗔𝗿𝘁𝗶𝗳𝗶𝗰𝗶𝗮𝗹 𝗶𝗻𝘁𝗲𝗹𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗮𝗻𝗱 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 🔗 #ArtificialIntelligence #AI #MachineLearning #GenerativeAI #Finance