AI mania hits Wall Street as Morgan Stanley creates new role focused on the trend

By Steve Gelsi

Marquee bank is using artificial intelligence to generate insights for financial advisers, joining tech companies in a bid to capitalize on the hot trend

This story has been updated to correct the timing of Morgan Stanley's alliance with OpenAI and to reflect the launch of AI @ Morgan Stanley Assistant.

As the technology world scrambles to capitalize on artificial intelligence and partner with the hot players, another Wall Street bank is getting in on the action: Morgan Stanley (MS) has named an insider to a new position as head of companywide artificial intelligence.

Jeff McMillan - who previously led the analytics, data and innovation unit within Morgan Stanley's wealth-management unit - will lead AI efforts across the bank. In his previous role, he worked with OpenAI, the originator of the popular ChatGPT tool.

Morgan Stanley has said it is OpenAI's only strategic client within the wealth-management space. Late last year, the marquee Wall Street bank launched the AI @ Morgan Stanley Assistant to offer content and insights for financial advisers, after announcing its alliance with OpenAI about one year ago.

McMillan will report to Andy Saperstein and Dan Simkowitz, co-presidents of Morgan Stanley, according to an internal memo seen by MarketWatch.

"Jeff will coordinate across the firm to ensure we have the appropriate AI strategy and governance in place," the internal memo said. "In doing so, he will partner with the businesses and infrastructure areas to identify and prioritize AI opportunities, continue to place the firm within the flow of AI development across the industry and help maintain Morgan Stanley's position of leadership as an innovator in AI."

McMillian will work with Katy Huberty, head of global research, to co-chair the company's AI steering group, the memo said. He'll also work with Mike Pizzi, head of U.S. banks and technology, and Sid Visentini, head of strategy.

While McMillan's title is not chief AI officer, that is a position tech companies have been rushing to fill lately. Some in Silicon Valley see the role as a necessity for companies looking to stay on the cutting edge, while others view it as a redundant marketing move given the role's potential to overlap with the duties of chief technology and chief information officers, according to tech executives who spoke to MarketWatch.

Also read: Chief AI officer: A necessity for companies or an expensive impediment?

Traditional tech companies have been trying to team up with AI pioneers such as Google Inc. (GOOG), Nvidia Corp. (NVDA) and Microsoft as well as startups OpenAI and Anthropic to jump-start their AI programs. Apple Inc. (AAPL), for example, reportedly is considering using Google's AI engine to power new features for the iPhone.

OpenAI drew $10 billion in backing from Microsoft Corp. (MSFT) in January 2023, along with other investments.

Also read: AI brings existential crisis for Apple, Salesforce and tech's old guard: Partner or perish

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-Steve Gelsi

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03-19-24 1134ET

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