Morgan Stanley enhances its Wall Street division with OpenAI-powered chatbot tools.

• CNBC has learned that Morgan Stanley is expanding the use of OpenAI-powered generative AI tools in its investment banking and trading division.
• This summer, Morgan Stanley's institutional securities group launched a version of an AI assistant based on OpenAI's ChatGPT, called AskResearchGPT, according to Katy Huberty, the global director of research.
• Instead of calling or emailing the research department, employees have been utilizing it, according to Huberty.

CNBC has learned that OpenAI-powered, generative artificial intelligence tools are being expanded in the investment banking and trading division.

Morgan Stanley's global director of research, Katy Huberty, announced that the firm launched another version of its AI assistant, AskResearchGPT, in its institutional securities group this summer, following the successful launch of an AI assistant based on OpenAI's ChatGPT technology to its wealth management advisors in early 2023.

Morgan Stanley's tool simplifies the process of extracting insights from its vast research reports, which cover topics such as stocks, commodities, industry trends, and regions, by collapsing the information into a single source.

"Huberty stated in an interview that the tool is a game changer for productivity, particularly for research analysts and colleagues in institutional securities. The tool enables staff to quickly access the most insightful and high-quality information."

Wall Street's largest players have quickly adopted OpenAI's generative AI technology since its launch as a viral consumer app in late 2022.

Morgan Stanley has approximately 40,000 employees using OpenAI-generated AI tools, while Goldman Sachs has about 189,620 employees with access to a platform using OpenAI's models. The San Francisco-based startup recently raised money at a $157 billion valuation.

Pierre Buhler, a banking consultant with SSA & Co, stated that OpenAI already has network advantages in financial services due to its ample funding and early focus on use cases for banks.

Buhler stated that they are leading in market penetration, but it is an emerging market, and they are only at the beginning. He predicted that competitors like Anthropic may gain traction over time.

Viral hit

Instead of contacting the research department through phone calls or emails, employees at Morgan Stanley have started using AskResearchGPT.

Since 2017, the bank has observed that employees are asking the new tool three times as many questions as they did with the previous traditional AI tool, based on traditional AI that's been in use since 2017.

Huberty stated that the most in-demand skill among salespeople and other client-facing staff is the ability to answer questions from hedge funds and other institutional investors.

"According to research, a salesperson takes one-tenth of the time to respond to the average client inquiry," she said.

Productivity boost

The GPT-4 based chatbot successfully summarized Morgan Stanley's stance on various topics, including copper, Nvidia, and data center setup, while comprehending specialized terminology and providing relevant charts and links to supporting materials.

Microsoft Teams and Outlook programs have embedded the tool within workers' browsers to facilitate its adoption, as the bank aims to maximize productivity gains, according to Huberty.

Morgan Stanley analysts are frequently asked if AI could eventually replace them and the research they produce.

""I believe that humans should make the call and own the relationship, which is crucial in the analyst, sales and trading, or corporate banker job," she stated."