A partnership with benefits and risks
The leading global investment bank and wealth management firm, Morgan Stanley, aims to stay at the forefront with a strategy where technology and innovation are crucial components for long-term success and survival:
Morgan Stanley aims to leverage OpenAI's breakthrough technology for a competitive edge in how their financial advisors can utilize Morgan Stanley's collective knowledge and insights in ways previously deemed impossible, explains Andy Saperstein, Head of Wealth Management and Co-President at Morgan Stanley.
In partnership with OpenAI, they are navigating the rapidly evolving era of GenAI and have developed a chatbot that generates unique responses based on their proprietary data, including investment strategies, market research, commentary, and insights from analysts.
The chatbot scans thousands of internal documents and provides answers to financial advisors within seconds, a task that would otherwise require significant time for the advisor to perform.
Through this partnership, Morgan Stanley gains access to OpenAI’s latest AI solutions—which in itself can provide a competitive advantage—as well as tailored support from software engineers and scientists.
However, the partnership strategy is not without risks. Morgan Stanley depends on OpenAI for the construction of their GPT, creating potential vulnerabilities that could arise from changes in OpenAI’s priorities, capabilities, or business strategy. This was illustrated by the turmoil at OpenAI in November 2023 when the board fired CEO and co-founder Sam Altman, casting doubt on the company's future direction and existence. After protests from employees and Microsoft, which owns 49 percent of OpenAI, he was ultimately reinstated.
Additionally, Morgan Stanley must ensure that proprietary data remains protected and fully owned. Technological advancements require vigilance to stay ahead and avoid being surpassed by more agile and technologically savvy competitors.
It's time to move out of the slow lane and into the resilient fast lane
Morgan Stanley’s partnership with OpenAI is just one example of how companies can join the GenAI race. Among the build and buy strategies, we find Bloomberg and Databricks.
Bloomberg built its own large language model (LLM), BloombergGPT, with the vision of becoming the first and leading LLM in the financial sector. They created an enormous dataset - their 'crown jewel' - with over 700 billion tokens to train the model. Developing their own LLM requires significant investments in both time and resources, as well as the ability to maintain and attract top talent in AI and data engineering.
Conversely, Databricks acquired expertise and new technology through the purchase of the GenAI startup MosaicML for approximately USD 1.3 billion—the largest GenAI acquisition to date. The MosaicML platform provides companies with easy access to train and run LLMs on their own proprietary data while maintaining complete ownership over the data and GenAI models. This acquisition has strengthened Databricks' position within open-source GenAI.
From a Silicon Valley perspective, there is no single right strategy. Ultimately, it’s about how GenAI aligns with the company’s strategic or tactical goals. If the implementation of GenAI is deemed to create a competitive advantage or transformative effect, it signals strategic significance.
This places higher demands on the company's own competencies, data security, and ownership, but the reward is enhanced resilience. Therefore, now is the time for Danish companies to act and prepare for the future.
