AI - Gameplan

I feel like at a certain point we should just make a permanent mega thread on AI to stop every other day having a conversation about the future of AI. It is, however, Friday, and I feel like waxing poetic about AI while tipsy. Obligatory disclaimer: I’m kind of tipsy and I have a generally optimistic predisposition.

At this stage it’s hard to imagine AI not being a substantial force on the demand side of the labor force equation. At some point, labor force will get reduced in analyst classes. Will it be by 5%? 25%? 80%?? Nobody on here knows; anyone who claims to is blowing smoke out of his ass. I find it unlikely that junior classes will evaporate entirely. For as long as this industry has existed, it’s had someone to push certain work down the totem pole. Finance
relies on things being done fast and accurately. It’s a stretch for me to imagine my vp doing a check for accuracy that would be necessary for most AI created cims at this stage or at any foreseeable point in the future. Not to say that mid levels and seniors tend to think that some work is beneath them, but my VP certainly does. This is just an example, but I think you get my point. The level above will always have demand for someone just below. The intense hierarchy culture that comes with banking makes me believe that everyone wants someone under them. Will AI fill that psychological urge? Maybe. It’s a lot harder to send passive (or just flat out) aggressive teams notes at 3 am to AI. Will this mean larger or similar analyst class sizes? Probably not, but maybe MDs will secretly want an army of analysts to yell at for AIs hallucinations.

That said, the economics will almost certainly not be the same. (This is the part of this post where I’m going to start Nostradamus-ing, so feel free to ignore from here). Wages will likely be suppressed initially but could gradually rise overtime because of a sort of predator-prey system going on—where years down the line, the supply of labor for IB has thinned down. This is a *could happen* not saying it will.

I also think it’s hard to imagine AI regulation not coming into effect down the line. AI is an incipient tool that has benefitted greatly from a fledgling industry status in the eyes of congress. I’m not saying that US regulators would—or should—ban the use of AI in certain industries, but a large regulatory scheme isn’t that far fetched given the dems concerns over consumer protections and the GOPs concerns on national security.

WM, certain elements of sales, IB class of ‘23 and older, and some others that I’m probably forgetting I’d imagine are pretty insulated for the time being (2-6 years). Recently, I’ve been wondering if Corp banking is similarly insulated because of the relationship management aspect. If anyone in here has more insight on that component, I’d certainly be curious.