AI Trading Systems Now Manage $2 Trillion in Hedge Fund Assets

Artificial intelligence has quietly taken over Wall Street. According to new data from Goldman Sachs, AI-driven trading systems now manage over $2 trillion in hedge fund assets globally—double the figure from just two years ago.

The Rise of Machine Trading

The shift reflects a fundamental change in how financial markets operate. Modern AI trading systems can:

• Process millions of data points in milliseconds
• Identify subtle patterns invisible to human analysts
• Execute trades across global markets 24/7
• Adapt strategies in real-time based on market conditions

Performance Gap Widens

The numbers speak for themselves. AI-managed funds outperformed human-managed counterparts by an average of 12.3% in 2025, according to hedge fund tracking firm Preqin.

Renaissance Technologies’ Medallion Fund, which has used quantitative strategies for decades, returned 76% in 2025. Meanwhile, traditional stock-picking funds struggled to beat index benchmarks.

Regulatory Concerns

The dominance of AI in trading has raised concerns among regulators. The SEC is considering new rules requiring disclosure of AI system architectures and mandatory “circuit breakers” to prevent AI-driven flash crashes.

“When machines are making millions of decisions per second, we need guardrails,” said SEC Chair Sarah Johnson. “The market’s stability depends on it.”

Human Traders Adapt

Rather than being displaced entirely, many traders are evolving into “AI supervisors”—professionals who monitor and adjust algorithmic systems rather than making direct trading decisions.

“The role has changed, not disappeared,” explains Marcus Thompson, head of trading at Citadel. “You need people who understand both markets and machine learning.”

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