World’s Largest Hedge Fund to Replace Managers with Machines

Now, the world’s biggest hedge fund is said to be developing software that will automate the day-to-day management of the entire firm.

Bridgewater Associates has a team of engineers working on the software on behalf of billionaire founder Ray Dalio, who wants to ensure the company can thrive when he’s gone, the Wall Street Journal reports.

Citing sources at the company, the report said the software could scan open positions and recommend people to fill jobs. It also would mediate disputes by ranking staff opinions and recommending the best way forward.

“Free from human-like desires and emotions, the mission of these machines will be to take business management to a whole new level.

Ultimately, the technology would tell staff what to do each day, with Dalio apparently aiming for three-quarters of management decisions to be determined by artificial intelligence within five years.

“The role of many remaining humans at the firm wouldn’t be to make individual choice[s] but to design the criteria by which the system makes decisions, intervening when something isn’t working,” the Journal said.

Although AI hasn’t replaced any CEOs just yet, it’s already taking on some management functions previously left to humans.

CEOs now have access to scenario-building software that allows them to compare various strategies and outcomes with different market conditions and return-rate scenarios.

Robots are already helping to administer millions of dollars of investments on behalf of wealth managers, including Bridgewater and large investment banks, such as UBS.

And there are some tech-industry personalities who are confident these capabilities could be extended to making big management calls.

“Free from human-like desires and emotions, the mission of these machines will be to take business management to a whole new level,” Pavel Cherkashin, a former senior manager at IBM and Adobe, said in October.

Indeed, Cherkashin said financial services corporations and investment funds are the most likely to hire a robot CEO first, given that the difference between making a right and wrong decision could be hundreds of millions of dollars.

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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