High-frequency trading firms such as Jane Street and Hudson River are spending heavily to build their own compute and invest in chips
High-frequency trading firms such as Jane Street and Hudson River Trading are racing to secure AI compute, with large firms spending billions of dollars on cloud contracts, startup investments, and self-built data centers. Jane Street operates a data center in Texas with more than 4,000 Nvidia GPUs, has directly invested $1 billion in CoreWeave and committed $6 billion for compute services, and also led a funding round for chip startup Etched and became its first AI chip customer; Hudson River spends $1 billion a year on AI and has signed a multi-year agreement with CoreWeave. One executive estimates that current compute spending is ten to twenty times what it was before ChatGPT was released.
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High-frequency trading firms have pushed compute spending to ten to twenty times the level before ChatGPT; readers can see how the financial industry is building its own compute and betting on chips.
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High-frequency traders like Jane Street and Hudson River Trading are now racing each other for AI computing power. The biggest firms are spending billions on cloud contracts, startups, and their own data centers, Bloomberg reports. Part of the reason is that they increasingly rely on machine learning to predict market moves.
One executive estimates that compute spending is now ten to twenty times higher than it was before ChatGPT launched. XTX Markets is building a data center in Finland, and Jane Street runs one in Texas with more than 4,000 Nvidia GPUs. Hudson River spends $1 billion a year on AI, according to AI chief Iain Dunning, and signed a multiyear deal with CoreWeave. Jane Street went a different route. It invested $1 billion directly in CoreWeave and committed $6 billion to its computing services.
Jane Street also led a funding round for chip startup Etched and became the first customer for its AI chip, which is supposed to deliver more performance by running at a lower voltage. According to Bloomberg, the industry sees rising costs and fast-aging chips as real risks. Executives like Jan Boomaars, CEO of Amsterdam-based high-frequency trader Optiver, still think doing nothing is more dangerous.