Will AI Make Markets Less Efficient?

To another episode of Goldman Sachs Exchanges. I'm Allison Nathan, and I'm here with George Lee, co head of the Goldman Sachs Global Institute. Together, we're cohosting a series of episodes exploring the rise of AI and everything it could mean for companies, investors, and economies. George, good to see you again.

Great to be with you.

So, George, I always look forward to these conversations. Today, we are talking about how AI is changing the way that investments are made. So just really digging into how useful the technology is for investors and also how it could be changing the way that markets actually behave.

Yeah, it's fascinating. Like AI is having tremendous impact across the investing landscape. It's inflecting the way that fundamental generate alpha, gather information, draw insights, but it is having a particularly interesting impact in the quantitative investing space where quantitative investors are reveling in the affordances of new models and new capabilities. And we have the absolute perfect guest to help unfold that for us. It's Osman Ali. And Osman is the global co head of quantitative investment strategies, heretofore known as QIS, to shorten the podcast. And that sits within the Gold

Osman, welcome to Exchanges.

Thank you for having me.

You sit in a very interesting place in the firm, so it would be helpful to just first understand what your team does and how adopting these technologies.

Absolutely. We are the quantitative investment strategies team, and we're a team that's been investing now for about thirty seven years. So the track records go back to the late eighties. So we're a team of investors that analyze large amounts of data using quantitative techniques and with advanced technology to identify opportunities across public markets and across really all asset classes. And the way we do this is by creating a set of models that help us analyze all this data and make better and better investment decisions. Now, I mean models in a very general construct because under the s

It's fascinating. And the thirty seven years, that's an incredible statistic, and that spans multiple analytical regimes in terms of using models and analytical techniques. Let's talk about this most recent development that Alison and I spent so much time talking about, the generative AI wave and how those new models, large language models and derivatives, derivatives, are influencing the way that you process data and reach investing decisions.