Wall Street Quant Talent Makes Leap to Self-Driving Startups

(Bloomberg) -- Wall Street giants like Citadel and D.E. Shaw & Co. are becoming a stealth talent pipeline for autonomous-vehicle startups, according to industry executives and headhunters.

Self-driving companies are finding that quantitative researchers and engineers from the financial world are well-suited for creating models that enable cars to make their own driving decisions. The work relies on the same artificial-intelligence skill set these number-crunchers honed when tackling the complex problem of predicting whether a stock, bond or barrel of oil would rise or fall.

And with competition intensifying across corporate America for artificial-intelligence experts, there is growing reason for the autonomous-driving newcomers to recruit beyond their familiar Silicon Valley turf.

Dan Schmidt, a 26-year-old model engineer, left his job in systematic foreign currency trading at Citadel Securities after three years. Following a stint at a big tech firm, this March he joined Ghost Locomotion, a Mountain View, California-based self-driving technology startup, whose co-founder and Chief Technology Officer Volkmar Uhlig also worked in quant trading in his early career.

“The chance to make a positive impact is much greater in autonomous vehicles,” said Schmidt, who studied math at Harvey Mudd College. “In finance, excelling at your job means making more money for your investors. In autonomous vehicles, excelling at your job means you might save lives.”

Share of talent inflows into self-driving car companies from the financial sector, while small overall, increased by about 30% from March 2020 to January 2021, according to an analysis by Revelio Labs, a workforce intelligence company. 

‘Strong Practical Experience’

Ghost Locomotion, which develops self-driving technology, hires about 50% of its model engineers from hedge funds or related businesses such as proprietary trading firms, according to its head of recruiting Katherine Sorensen. Staffers’ prior employers include firms such as Jane Street, D.E. Shaw, Citadel and Citadel Securities.  

“Candidates with a quant background -- in particular, from investment firms -- have really strong practical experience building models that actually make it into production,” said Sorensen, who joined Ghost after working for more than eight years at D.E. Shaw. “That’s what makes them likely to succeed at Ghost and other AV companies.”

It’s not just engineers: executives, too, are making the leap from finance to AV startups. Dave Ferguson, co-founder of autonomous delivery startup Nuro and a veteran of Google’s self-driving project, came to the industry from Two Sigma Investments, where he was a vice president of quantitative research, according to his LinkedIn profile.

Plus, which develops self-driving technology for long-haul trucking, has made “a couple of” recent hires who previously worked in high-frequency trading and other research-intensive strategies, according to Shawn Kerrigan, its co-founder and chief operating officer.

Quant veterans from hedge funds and trading firms understand that models and simulations “are critically important to your success,” Kerrigan said.

Motivated by Technical Challenges

These career moves have happened despite hedge funds generally paying higher compensation than startups, though the latter may make it up through equity payout. For some math whizzes, the intellectual challenge is worth the tradeoff, said Dan Franco, head of data-science recruitment at Durlston Partners, which has hired for Ghost and U.K.-based self-driving startup Wayve.

“I think you’d rather earn $400k and be happily fulfilled than earn $500k and be bored,” Franco said. “A lot of these guys are actually more motivated by the technical challenges rather than money anyway.”

Silicon Valley autonomous-vehicle ventures have traditionally hired from two main pools: tech giants such as Alphabet Inc.’s Google and Microsoft Corp. or fellow emerging technology companies. While achieving fully driverless cars has taken longer than much of the industry promised, the sector has continued to attract capital and talent. Self-driving car companies have experienced massive growth in employee numbers, with engineering roles rising more than 80% since 2018, according to Revelio Labs.

Aurora Innovation Inc., a self-driving technology startup that recently partnered with FedEx Corp., has employees from automotive, aerospace, medicine, oil and gas, nuclear power, and “an Academy-Award winning simulation engineer who was formerly at Pixar,” a spokesperson said.   

Alphabet’s Waymo and Argo AI, an autonomous-vehicle startup backed by Ford Motor Co. and Volkswagen AG, also employ engineers who previously worked at hedge funds, according to LinkedIn. A Waymo spokesperson declined to comment on its hiring strategy. An Argo spokesperson said the company doesn’t comment on personnel issues or recruiting efforts. A spokesperson at General Motors Co.’s self-driving car unit Cruise LLC didn’t reply to requests for comments.

Some hedge-fund candidates decide to join Ghost only to sit out their yearslong non-compete period, with the intention to move to another hedge fund afterward. 

“It’s a phenomenon that we are familiar with,” Sorensen said. Still, the temporary help is welcomed. 

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