Wall Street vs. AI Startups: The Race for Entry-Level Quants
On a rooftop bar in Manhattan’s Lower East Side, approximately 150 quant researchers gathered with employees from the artificial-intelligence startup Anthropic, who urged them to contemplate a future beyond Wall Street. At the June mixer, attendees gathered over plates of potstickers and popcorn chicken, mingling with former hedge fund quants who have transitioned into Silicon Valley evangelists. These individuals encouraged participants to consider job opportunities at Anthropic, as reported by the company. This month, the San Francisco-based firm is expanding its reach with another quant “social hour” taking place in London.
The recruiting campaign reflects comparable initiatives undertaken by competitors OpenAI and Perplexity AI. A number of prominent individuals in the AI sector possess quantitative backgrounds, such as OpenAI Chief Research Officer Mark Chen and Perplexity co-founder Johnny Ho. However, quants attracted by the prospect of creating AI models and tools, rather than profit-driven algorithms for traders—often enticed by high salaries and benefits akin to those in finance—must also contend with the possibility of disappointment. “The pitch is ‘come and build the machine god,’” stated Agustin Lebron, a former trader at Jane Street who currently operates at a systematic trading startup. “But I suspect that, for a lot of those people, it’ll end up being ‘come and figure out how to make people buy things from ads.’”
The competition between the AI industry and finance is clearly intensifying. For Wall Street, this development presents an unwelcome complication in an already fierce battle for quantitative talent. In contrast to financial firms, AI companies do not impose non-competition agreements that restrict many researchers from transitioning between jobs with ease. Tech recruiter Mike Doonan remarked, “I’d estimate we’ve seen a 40–50% increase over the past 12–18 months in AI-native and software companies specifically asking for talent with quantitative finance backgrounds.” According to external job listings, entry-level quants can earn base salaries reaching up to $300,000. However, this figure does not account for the potentially significant bonus targets that may accompany these positions. Today, AI firms are able to provide base salaries that are competitive, with compensation packages enhanced by equity instead of traditional bonuses.
An analysis conducted by employment tracking company Live Data Technologies reveals that firms such as Jane Street and Citadel Securities have seen a departure of quants to AI companies over the past year. This conclusion is drawn from a review of LinkedIn announcements, social media posts, and company news sites. Earlier this year, Aron Thomas and Charles Guo made the decision to leave Jane Street and join Anthropic. During an interview, they expressed admiration for their previous company, describing it as a wonderful workplace. However, they also noted their attraction to the thrill of contributing to the next big innovation. “It became very clear quite quickly that AI is going to change a lot of things and drive many changes in the world, and it seemed pretty important to be involved,” Guo remarked. Jane Street did not provide a comment for this story. Citadel refrained from commenting on personnel issues, yet highlighted the increasing interest in its internship program, which attracted 108,000 applicants for this summer, marking a 20% rise from the previous year.
OpenAI refrained from commenting, but its CEO Sam Altman highlighted quant-focused recruitment events in an April post on X. Noam Brown, a former quantitative analyst and leading researcher at the company, expressed his views, stating that recruits are no longer required to accept a pay cut. Perplexity’s Ho stated that the company offers base salaries of $200,000, but compensates for the difference to some extent through equity. He emphasized that the company’s appeal to quants is not primarily financial, however. Ho, who previously worked at Tower Research Capital, emphasized that it was the chance to embrace “new and more exciting challenges.”
Quants possess a distinctive skill set that allows them to minimize latency in algorithms. This capability makes them highly sought after by AI developers who are striving to provide users with rapid responses from the large language models that drive generative AI tools like ChatGPT. Similar to AI research, quantitative trading requires the analysis of extensive volumes of unstructured data. Furthermore, companies such as Anthropic and Perplexity are increasingly venturing into financial services offerings. Anthropic stated that it seeks “the rigorous analytical thinking and empirical research methods” that quants possess. The company stated that such skills have “substantial overlap with the technical challenges of developing safer and more capable AI systems,” and emphasized its commitment to continuing to hire individuals with specialized backgrounds as it scales.
Quant firms have, at times, taken legal action against employees who leave to join competing firms. However, it appears that litigation is improbable for quants transitioning to AI labs, as these entities do not directly compete with financial firms. Additionally, California, home to the majority of major AI companies, largely prohibits non-competition agreements. Ho stated that Wall Street has harmed itself through the use of non-compete agreements. “They are becoming more and more secretive,” he stated. Recent developments indicate that Wall Street is making efforts to counter the poaching strategies employed by AI companies. Iain Dunning, who is responsible for AI at Hudson River Trading, took to X in May to express his thoughts: “Are you a researcher at OAI/Anthropic/etc and tired of overhiring, the orgchart chaos, the lowered talent bar, want to move to NYC, or just want to do something different?”
