Citadel and Ken Griffin Are Betting Big on ChatGPT

Ken Griffin isn’t a name thrown around weightlessly on Wall Street. He’s the name behind one of the most successful investment firms in operation right now, and he founded one of the most noteworthy market makers. He’s a polarizing figure who wears many hats, and right now, his companies are undergoing big changes. While he brings the Citadel LLC empire to Miami, he’s also bringing artificial intelligence (AI) into the fold.

Indeed, Griffin’s two companies Citadel LLC and its subsidiary Citadel Securities, are both riding high notes in 2023. Citadel Securities continues to be one of the most popular market makers available to brokers today. As a result of this continued popularity, the company saw a profit of over $7.5 billion last year. But more impressive is the performance of Griffin’s hedge fund. Citadel LLC closed out 2022 with a massive $16 billion gain on the year. This gain is handily the largest ever for a hedge fund.

While the year could be spent just taking a victory lap, Griffin is not resting on the companies’ respective successes. Indeed, he is leading several major initiatives for the companies. The most notable of these has been the migration of Citadel from its long-time headquarters in Chicago, Illinois, to Miami, Florida. Griffin is doing so with the plans of making the city a hub for trading like it has never before been before. However, there’s a new pivot on the horizon for Griffin’s Citadel empire. It all has to do with the newest feverish craze taking over the investing world and beyond.

Citadel Looks to Implement AI Tools

Citadel is one of the best hedge funds on the market right now. There’s no doubt. With $16 billion in revenue, nobody can challenge the company’s ability to pick stocks and generate equitable portfolios. So, when the company decides to take on a new tool for doing business, you had better believe it’s something worth entertaining.

On Wednesday, news broke that Ken Griffin’s companies are negotiating with OpenAI to secure a ChatGPT license for their businesses.

The news doesn’t provide much detail by way of what Citadel plans to do with this technology. But, there’s plenty of indication that it will take a significant role in the companies’ day-to-day activities. Citadel is a very technology-based hedge fund. The company’s success is due in no small part to its corps of scientists working to develop quantitative analysis models and using these models to know when to get in or out of a given holding.

ChatGPT has shown a knack for evaluating assets, too. InvestorPlace has tasked ChatGPT time and again with selecting high-growth assets across the stock market and crypto world. The chatbot, while not necessarily up-to-date on stock market news, possesses a keen quantitative analysis skill that closely mimics what Citadel is trying to do already. And it can do this with an added layer of qualitative analysis, too — taking fundamentals into account just as much as price momentum. So, the adoption of ChatGPT tech by Citadel is ultimately a fairly natural fit.

On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Brenden Rearick is a Financial News Writer for InvestorPlace’s Today’s Market team. He mainly covers digital assets and tech stocks, with a focus on crypto regulation and DeFi.

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