BUSINESS

An AI ‘Brain’ Is Micro-Managing Staff At World’s Largest Hedge Fund

Bridgewater Associates is algorithmically modeling its founder's principles to hire, fire and direct employees

BUSINESS
Image: Vocativ
Dec 27, 2016 at 3:51 PM ET

In their quest to increase profits and productivity, corporations have always used technology to exert greater control over employees in the workplace, but big data and artificial intelligence now offer large companies more tools than ever to monitor workers’ every move.

One of the most frightening examples is currently being tested at the world’s biggest hedge fund, Bridgewater Associates, which is already infamous for its brutal corporate culture and unconventional management style.

Using algorithms modeled after the “principles” and decision-making style of its aging billionaire founder, Ray Dalio, the company has started building a system to automate the company’s day-to-day management, including making decisions on hiring and firing. The platform—which Dalio calls the company’s “Principles Operating System,” or “PriOS”—is an attempt to “make Ray’s brain into a computer,” allowing the founder’s principles to be enforced long after he dies, as one employee describes it to the Wall Street Journal.

The system incorporates data from psychological tests, snap polls and daily multiple-choice quizzes given to each of the firm’s employees, according to the Wall Street Journal piece. The AI then processes that data through algorithms trained on Dalio’s “principles” to issue “GPS-style directions” for daily tasks as well as name which people to hire or fire from different positions within the company.

The system is another node in a trend of experimental tech aimed at helping companies obsessively “optimize” workers’ performance by monitoring and quantifying their daily activities. Many of these platforms have at first taken hold in the retail sector, where low-wage workers are constantly tracked by their employers. For example, one company called Humanyze describes itself as a “people analytics” platform, providing companies with employee-worn badges that track workers’ movements and body motion throughout the day to “identify risks within their organization.”

With more than $160 billion in managed investments, Bridgewater is an especially frightening test environment for the future of AI-guided corporate management. In the past, employees have described the company as a “cauldron of fear and intimidation” where employees are required to give brutally honest assessments of their co-workers’ performance. Five current and former employees told the Wall Street Journal that one-fifth of new hires don’t last a week, and “those who stay sometimes are seen crying in the bathrooms.”

But it’s easy to see how rigid, algorithmically-enforced corporate policy can greatly exacerbate the pressures already felt by workers in a wide variety of corporate cultures, giving companies even more leverage against employees in high-pressure and performance-oriented positions like retail and sales.