World’s largest hedge fund trying to build an AI version of its boss’ brain


Big Brother could soon be real for the employees of Bridgewater Associates LP. The world’s largest hedge fund is building a system that would automate most of the firm’s management.

The system, variously known as “The Book of the Future,” “The One Thing” and the “Principles Operating System”, according to The Wall Street Journal, uses an extensive book to guide employees at the company based on the principles of founder Ray Dalio (left).

According to the report, the system, overseen by David Ferrucci, who previously oversaw the creation of IBM’s Watson, will take a machine learning approach to autonomous management of the company. That will include peer reviews and employee testing to guide specific tasks, as well as guiding hiring, firing and promotions.

Those tasks are not only suggested guidance but direct everything down to a micro-management level of each employee. Some examples: GPS-style directions for how staff members should spend every aspect of their days and even whether an employee should make a particular phone call at a given time.

The thinking behind the system is an implementation of Dalio’s views of human beings, and the larger world, as complex machines. The management philosophy is said to regard emotion as a detriment to the smooth functioning of those machines, prompting one employee familiar with the project to tell the Journal that the system being built was “like trying to make Ray’s brain into a computer.”

Dalio’s views on how the company should run are also described in a 123-page public manifesto known as the “Principles,” which every employee is said to be expected to know. It includes maxims such as “By and large, you will get what you deserve over time,” and “Don’t ‘pick your battles.’ Fight them all.” That philosophy is also said to include “radical transparency” that until recently included all upper-management debates with the company’s entire staff.

Micromanaging employees at such a level and, even more, trying to enshrine that level of management into an artificially intelligence, may be controversial. But there is no question that the systems have worked for Bridgewater so far. The company manages $160 billion in funds, the most of any hedge fund firm in the world, and it is also said to have earned clients twice as much total profit as any of its rivals.

Image courtesy of Bridgewater