# AI Funds Outperform Traditional Hedge Funds

> AI-driven hedge funds outperformed traditional funds by 6% annually until 2017, but the gap narrowed over time.
- Title: AI Funds Outperform Traditional Hedge Funds · Dealroom
- Summary: AI-driven hedge funds outperformed traditional funds by 6% annually until 2017, but the gap narrowed over time. AI funds initially outperformed non-AI hedge…
- Keywords: ai-driven investing, hedge funds, nber working paper, quantitative strategies, ai funds, performance metrics, startups, business, Funds, Outperform, Traditional, Hedge
- Source: Dealroom — https://dealroom.co/news/149099-the-growth-and-performance-of-ai-driven-investing
- Published: 2026-09-06T19:26:40+00:00
- Read time: 1 min
- Topics: ai-driven investing, hedge funds, nber working paper, quantitative strategies, ai funds, performance metrics, startups, business
## Research Methodology
A 2026 National Bureau of Economic Research working paper analyzes 7,896 US hedge funds from 2006 to 2024.
## AI Fund Classification
The study identifies 89 AI funds, 1.1% of the sample, using text-based classification from 2006 to 2024.
## Performance Trends
AI funds outperformed non-AI hedge funds by 6% annually until 2017, after which the gap became statistically insignificant.
## Long-Term Impact
Even AI funds launched early saw their relative outperformance disappear after 2017, with no lasting advantage.
## Key takeaway

AI funds initially outperformed non-AI hedge funds by 6% annually but the advantage disappeared after 2017.