Core Insights - The article discusses the impact of AI on the investment management industry, particularly focusing on the performance of an AI-driven analyst compared to human fund managers. The AI managed portfolios outperformed human managers in 93% of cases, generating an excess return of $17.1 million from 1990 to 2020 [1][2]. Group 1: AI Performance and Implications - The AI analyst was able to adjust portfolios of over 3,300 actively managed mutual funds, achieving superior performance compared to human managers [1]. - The study indicates that AI can complete tasks in hours that would typically require ten professional employees, thus uncovering information that may be overlooked by humans [2]. - The research serves as a thought experiment to evaluate the potential impact of AI on the investment landscape, suggesting that if AI had been available 35 years ago, it could have significantly altered the industry [4]. Group 2: Challenges and Limitations - The study has limitations, as the AI did not compete against other funds with similar technological capabilities, which may skew the results [3]. - The average management fee for human-managed funds is $3.6 million per quarter, and the study suggests that funds would need to increase fees by at least five times to match the returns generated by AI [5]. - There are operational and regulatory constraints that human fund managers face, which may limit their ability to leverage AI effectively [6]. Group 3: Future of Human Fund Managers - While AI is expected to enhance efficiency, it may lead to the gradual elimination of certain roles, particularly junior analysts [2][6]. - Despite the rise of AI, there will still be a place for skilled human fund managers who can effectively utilize AI models [7]. - The article suggests that those who can adapt their thinking to incorporate AI may outperform it, indicating that human intuition and creativity still hold value in investment management [8].