The Growth and Performance of Artificial Intelligence in Asset Management

Shuang Chen, Clemens Sialm and David X. Xu

No 35273, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the growth and performance of AI-driven investing. Using investment advisers' regulatory disclosures, labor market data, and fund strategy descriptions, we document that AI-driven investing has grown steadily since the early 2010s and is concentrated among hedge funds. AI hedge funds outperformed non-AI hedge funds in the early years, but this outperformance declined over time, even among early adopters. Contrary to concerns about AI-driven strategy homogeneity, AI hedge funds exhibit lower return comovement than non-AI peers. Our findings highlight both the alpha-generating potential and the limitations of AI as a source of investment performance.

JEL-codes: G11 G23 G24 (search for similar items in EconPapers)
Date: 2026-05
Note: AP CF
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