HFT Firms Race for AI Compute Power

High-frequency traders Jane Street and Hudson River Trading are competing for AI computing power. The largest firms in the sector are spending billions on cloud contracts, startups, and private data centers. This shift reflects a growing reliance on machine learning to predict market moves. An executive estimates that compute spending by these firms is now ten to twenty times higher than it was before ChatGPT launched.

Jane Street operates a data center in Texas with more than 4,000 Nvidia GPUs. The firm 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. This chip is designed to deliver more performance by running at a lower voltage. Hudson River spends $1 billion a year on AI and signed a multiyear deal with CoreWeave. XTX Markets is building a data center in Finland.

The AI industry views rising costs and fast-aging chips as real risks. Jan Boomaars, CEO of Amsterdam-based high-frequency trader Optiver, believes doing nothing is more dangerous than investing in AI computing.