Engaging in the evolution of generative AI: Morgan Stanley's partnership with OpenAI

The leading global investment bank and wealth management firm, Morgan Stanley, has been addressing the challenges of disruptions caused by emergent technology, driven by their belief that “everything today is ripe for disruption. Stay abreast of the latest trends and developments” [1]. Additionally, the firm’s dedication to digital innovation is manifested in their strategy, prominently highlighting technology and innovation as vital components for achieving long-term success[2].

In the recent year Morgan Stanley has, similar to many major corporations, directed its attention towards generative AI. The company has determined its course of action in navigating the rapidly evolving era of generative AI, highlighting strategic partnerships with tech innovators as a core element in their strategy²¹. The rationale behind this decision is based on the company’s conviction that partnerships allow them to remain agile and take advantage of emerging opportunities^21.. Consistent with this strategy, Morgan Stanley entered into a partnership with OpenAI, the company behind ChatGPT, in March 2023. 

Their co-created chatbot exclusively generates responses using content from Morgan Stanley's proprietary data, which includes investment strategies, market research, commentary, and insights from analysts[3]. According to Chief Data Officer Jeff McMillan, the chatbot is used by all of Wealth Management's advisors and staff throughout the asset management group. It will radically change the way information and solutions are accessed and tailored to client needs[4]. The chatbot is capable of crawling thousands of internal documents and providing an answer to the financial advisor within seconds, a task that would require the financial advisor a significant amount of time to complete. Hence, by utilizing the chatbot, the firm frees up considerable time. This time can then be effectively channeled to assist a larger number of clients while simultaneously managing a broader array of tasks that demand personalized attention[5].

The reason behind the partnership is, according to Wealth Management Head and Co-President Andy Saperstein, that Morgan Stanley, 

“Aims to leverage OpenAI’s breakthrough technology into a competitive advantage in how our Financial Advisors can harness Morgan Stanley’s knowledge and insights in ways that were once never thought feasible”

Andy Saperstein, Wealth Management Head and Co-President at Morgan Stanley[5]

Through their partnership with OpenAI, Morgan Stanley can engage in co-creation, leading to AI solutions specifically designed to meet their unique requirements. Additionally, the partnership affords Morgan Stanley the advantage of accessing OpenAI's latest, state-of-the-art AI solutions in advance, potentially enabling them to maintain a competitive edge over rivals without such a partnership. Furthermore, Morgan Stanley acquires additional benefits from the partnership that companies solely relying on OpenAI's API will not have. Notably, they gain access to personalized support provided by OpenAI's team of skilled software engineers and scientists.

The partnership mirrors Morgan Stanley's strategic response to disruptive technologies within a rapidly evolving digital landscape. Additionally, it demonstrates the company's belief that establishing partnerships can render their business resilient to new AI disruptions. While the partnership between Morgan Stanley and OpenAI is still in its early stages, it has the potential to be a major breakthrough in the field of financial services. By combining OpenAI's technology with Morgan Stanley's expertise, the two companies could create a new generation of wealth management services that are more efficient, personalized, and accurate.

[1]Morgan Stanley: ”Frontier Technology”, 2023

[2]Morgan Stanley: ”Technology”, 2023 

[3]InvestmentNews: ”Morgan Stanley Partners with OpenAI on Internal Chatbot for Its Advisors”, 2023

[4]CNBC: ”Morgan Stanley is Testing an OpenAI-Powered Chatbot for Its 16,000 Financial Advisors”, 2023

[5]Morgan Stanley: ”Morgan Stanley Wealth Management Announces Key Milestone in Innovation Journey with OpenAI”, 2023