Former operators from Bridgewater, Schonfeld, Jain Global, and other major hedge funds are launching startups that use AI agents to automate investment research and portfolio management, according to Business Insider. The startups are building replacement systems for analysts, not tools to assist them.
Ian McInnis, a former Bridgewater analyst and founder of Y-Combinator-backed WithAI, told Business Insider that LLMs are “a democratizing force, empowering [smaller funds] to process all of that information.” WithAI already counts four hedge funds as clients. Jaime Villa, a former Schonfeld and Citadel Securities macro researcher, co-founded Macro Technologies to “automate” repeatable tasks that macro analysts perform. Cameron McKendrick, formerly of Jain Global, launched Serona Data to find investing signals in healthcare data.
The Citadel Conversion
The timing coincides with a shift among the industry’s biggest incumbents. Citadel founder Ken Griffin, previously one of AI’s most vocal skeptics, told a Stanford Business School audience in May that he was “fairly depressed” by what Citadel’s new AI agents could accomplish. A project that once took an employee with a master’s or Ph.D. weeks could now be done in hours, he said. His conclusion: “For the first time, AI is real.”
As recently as January 2026, Griffin said at the World Economic Forum that AI was impressive on the surface, but “as soon as you dug deeper, it’s all garbage.” The reversal took less than five months.
Scale as the Goal
Stephen Wu, founder of $50 million hedge fund Carthage Capital, told Business Insider he wants AI agents to replicate his thought process so his fund can trade hundreds of stocks instead of the 10-20 he manages today. Carthage was the first investment manager to join Carnegie Mellon’s VentureBridge program to accelerate that capability.
Claire Brown, founder of stock-picking fund Aristides Capital, posted on X that “90% of the answers that Claude generates in 5 minutes are better than the vast majority of people could generate in an hour.” She estimated the latest version of Claude matches a junior analyst who would earn more than $100,000 annually. “I’m pretty sure there’s a massive ROIC there,” she wrote.
Bridgewater Goes External
Bridgewater, the world’s largest hedge fund, has partnered with Mira Murati’s Thinking Machines Labs to build an LLM that can “interpret text with expert-level taste and judgment” so humans no longer need to manually sift through financial documents. The partnership signals that even the most well-resourced funds are looking outside their walls for agent capabilities rather than building everything internally.
The Cost Equation
The competitive dynamics are straightforward. Talent is a hedge fund’s largest expense, and the most expensive talent does investment research, portfolio construction, and executive interviews. If AI agents can automate portions of that workflow, fund operating costs drop. Jan Szilagyi, CEO of AI platform Reflexivity and former co-CIO at Lombard Odier, told Business Insider he expects AI to pick stocks autonomously soon as it learns from investors’ practices.
For the last 15 years, scale advantages made the hedge fund industry increasingly hostile to smaller players. The proliferation of alternative data and sophisticated risk models rewarded firms with hundreds of analysts and billions in AUM. If AI agents compress the research function, smaller funds with better agent infrastructure could compete with multi-strategy giants on coverage breadth for the first time.