Hedge-Fund Manager Uses AI Agents to Slash Payroll Costs

Hedge-fund manager Brian Kelly has his staff working 24/7, yet his payroll costs are a fraction of what they once were.

That's because Kelly — who previously ran a cryptocurrency hedge fund — created his new trading firm, Bracket22, to be powered entirely by agentic artificial intelligence.

"I used to have about seven or eight employees all around the world. A lot of them were based in New York," Kelly told CNBC. "Between their salaries and compute and healthcare and everything like that, my payroll was well into the millions of dollars per year."

Factoring in things such as office space and bonuses, Kelly estimated his total labor-related costs before he began using AI were roughly $5 million a year.

"Now, when I'm using AI, I run somewhere around [$30,000] to $40,000 a year, total. And that's with every AI agent, that's with all my compute, that's with everything I need to completely replicate a hedge fund ... with AI," he said.

Bracket22 is a stark example of a growing reality on Wall Street as firms test the benefits and limits of AI in finance.

JPMorgan Chase CEO Jamie Dimon said in February the tech was already reshaping his workforce and that his bank had "huge redeployment" plans for its employees. The company plans to launch AI agents later this year that it has said can work autonomously for hours at a time.

Morgan Stanley is similarly funneling some work to AI.

There has been some hesitation, though. A Goldman Sachs partner, for example, recently warned of the dangers in letting AI erode bankers' reasoning skills.

Kelly — a former trader on CNBC's "Fast Money" — closed his cryptocurrency hedge fund in early 2025. Later that year, he began testing out uses of artificial intelligence. Bracket22 invests only Kelly's own capital and trades cryptocurrencies, stocks and commodities.

Kelly introduced CNBC to several of his AI agents, each with its own distinct role. A bot called "Steffi" is in charge of technical analysis. "Desmond" handles quantitative strategies, and "Houston" is, fittingly, mission control and pulls all the pieces together.

"I've crafted each of these agents to be a specialist in their field," Kelly said. "I wanted to isolate them and I wanted to get their unbiased view on what I'm doing."

"And then I use my human judgment and human insight to make the final decision," he added.

Kelly said he would estimate he's "at least 10 times more productive" with his agents. And while he's replaced his staff with AI, he said the real opportunity lies in augmenting human workforces.

"If you take a staff of 100, [with AI] you've got a staff of a thousand," he said. "It's not necessarily just, hey, you can replace everybody with AI agents. You can make your existing employees at least 10 times — maybe more — more productive."