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The introduction of this AI assistant is part of the broader trend within the banking industry towards embracing generative AI. Other major banks like JPMorgan, Citigroup (NYSE:C), and Goldman Sachs are also working on similar projects. However, Morgan Stanley is the first to launch a customized internal AI program.
OpenAI’s enterprise tier, introduced in August, offers businesses access to GPT-4 with no usage caps, faster performance, and API credits. Companies such as Block, Canva, and Duolingo were part of the beta process. The key feature of this tier is that clients can use ChatGPT to train their custom models for various tasks without having OpenAI’s model train on their data.
Despite the enthusiasm for AI in the banking sector, concerns have emerged about potential risks related to copyrighted material in the training dataset used for ChatGPT-4. There are also worries about “hallucinations”, instances where the AI model might generate incorrect facts.
JPMorgan is planning to develop a ChatGPT-like AI model for investment selection and has committed to investing $1 billion in AI and data analytics in 2023. They anticipate a return on investment of $1.5 billion for 2023 alone. McKinsey estimates that AI could generate up to $1 trillion in additional value annually for the global banking industry.
Citigroup has been working on generative AI models for three years, as per CEO Jane Fraser, who believes that the risks of not embracing generative AI far outweigh those of engaging with it. The Evident AI Index, which ranks banks based on their preparedness for the AI revolution, placed JPMorgan at the top spot, with Morgan Stanley at number ten.
Despite facing a lawsuit from private equity firms Certares Management and Knighthead Capital Management, who seek at least $750 million in damages alleging investment fraud in a high-speed rail company, Morgan Stanley’s share price rose slightly on Monday. Since the start of the year, the bank’s share price has increased by 3.49%.
The launch of Morgan Stanley’s AI assistant marks a significant milestone in the banking sector. As the potential value addition from AI in banking is estimated to be enormous, other leading banks are expected to unveil their own AI models soon.
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