The rise of AI and its impact within the investment industry
The world is waking up to AI – but investors are beginning to use it. Artificial intelligence and machine learning are already disrupting global economies and transforming the way investment managers do business. Those who merge new technology with their talent stand to make the biggest impact in tomorrow’s economy. AI‘s emergence has caused US-based large-cap tech stocks like Nvidia to reach unprecedented values on the market, as investors bet big on new technology.
However, the emergence of DeepSeek, a Chinese AI model which its creators claim does everything any other model can do at a fraction of the cost, has shaken the market. Investors have begun to divest value away from large-cap stocks, anticipating a sea-change in the affordability and accessibility of AI and a reduction in US investment in model development. The average AI stock was down by 15 basis points after the DeepSeek announcement (JPMorgan).
AI Remains Robust Despite Market Instability
But this doesn’t mean the market has lost confidence in this new technology. Rather, the promise of cheaper AI build costs could accelerate AI’s impact. With a lower cost hurdle to overcome, more models can enter the market and raise competition. That allows investment managers to diversify their portfolios to improve resilience and better manage the risk of increased AI volatility.
DeepSeek may be a paradigm shift for AI – but really, it’s just another chapter in the story. AI is transforming the investment process, with 29% of professionals already integrating these tools to develop their strategy (CFA Institute), from identifying behavioural patterns to optimising asset allocation decisions. 64% of investment professionals also say they are building their skillset in AI and machine learning (CFA Institute). And, when it comes to clients, the interest is even higher – 81% say that they are more interested in funds entirely managed by artificial intelligence and big data-based strategy (CFA Institute). This proves that if you understand AI, you’re better able to connect with your clients.
Investing in AI’s Impact
However, to fully realise AI’s potential, investment professionals must understand the risks. Compared to other sectors where AI is excelling like medical science, there is far less data available for AI models to base their calculations on. Additionally, the investment environment is fluid, with no clear answers – AI models function much less effectively in achieving goals when the goalposts are always moving. And, finally, AI is designed to be logical and rational, success in the market demands human insight. That’s why it’s so important to balance artificial intelligence with human intelligence, combining a data-led approach with your instinct.
The impact of AI on investments is already significant, and the sector is expected to grow by 36.6% year-on-year until 2030 (Grandview Research). Because of this, the investment professionals who have the skills to integrate AI within their strategies stand to benefit the most from a changing technological landscape. At CFA UK, we’re committed to helping investment experts like you grow their talent by connecting you with experts in the industry.
AI Skills to Speed Up your Career Journey
That’s why we’ve created our first ever Investment Talent Conference, held in London on 5 June 2025, to help you understand what AI skills the investment industry is looking for, and how you can meet the demand for AI expertise.
You’ll hear from experts like Giulio Renzi Ricci, Head of Asset Allocation, Europe, Vanguard on how to use AI to help with asset allocation, Dr. Nic Pillow, Senior Ventures Manager, Blackfinch Ventures on AI valuations, and Cornelia Andersson, Chief Product Officer, With Intelligence on the future skills investors will need in AI to excel in their careers. When you book your place, you’ll also have the chance to connect with leading recruiters from top firms, as well as network with industry peers at our drinks reception. So, if you want to realise the potential of AI in your career, sign up today!