Review of Financial Studies 2026

Generative AI and Asset Management

Jinfei Sheng¹; Zheng Sun¹; Baozhong Yang²; Alan L. Zhang³

¹ Merage School of Business, University of California Irvine , · ² J. Mack Robinson College of Business, Georgia State University · ³ Ivy College of Business, Iowa State University ,

Abstract

Using a novel measure of investment companies’ reliance on generative artificial intelligence (GenAI), we document a sharp increase in GenAI usage by hedge funds after ChatGPT’s 2022 launch. A difference-in-differences test shows that hedge funds adopting GenAI earn 2-4% higher annualized abnormal returns than nonadopters, while non-hedge funds do not benefit. The outperformance originates from funds’ AI talent and ChatGPT’s strength in analyzing firm-specific information. We conduct a new survey of fund managers’ GenAI usage to provide direct validation of our measure and offer additional new insights on how managers adopt GenAI tools in their practice.

DOI

10.1093/rfs/hhag050

Language

en

Sources

openalex crossref

Cite

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