The prediction markets are catching on with Wall Street interns
The summer intern hunched over their phone, surreptitiously typing away, might be doing one of two things: betting on a prediction market or managing an AI chatbot.
Morgan Stanley's equity research team asked the firm's summer interns about both their AI use and, for the first time, betting habits as part of its annual survey. More than 500 North American interns, most of whom are 21 or younger, participated in this year's survey, which was conducted in June and published in August.
More than a quarter of the interns said they'd used a betting or prediction market app in the past year, with Kalshi and Polymarket as the top two choices. Around 14% of those of betters said they'd used Kalshi, and 55% said they have multiple betting apps.
Interns are relatively well aligned with the country's overall adult population: 21% of respondents said they'd used a prediction market platform, according to a national survey conducted by The Harris Poll on behalf of the National Council on Problem Gambling in May. In the same survey, 37% of respondents between 18 and 34 reported using one of the platforms.
Betting apps are under increasing scrutiny, as multiple states have initiated legal or regulatory enforcement against them, and some companies have banned employees from trading on the platforms. A source familiar with Morgan Stanley's policy confirmed that the firm's employee code of conduct covers trading and investing topics, including prediction markets, but did not provide further details.
Kalshi's head of institutional previously told Business Insider that the company is trying to lure Wall Street firms onto its platform, and said part of its appeal is as a data source for investors. Some have expressed concern over insider trading on the platforms and the limited regulation.
Interns are, it seems, simultaneously excited and dismayed by AI, and some seem convinced that older generations aren't fully appreciating its power.
AI use continues to surge among interns: 68% said they use an AI tool daily, up from 35% last year and 14% in 2024. The technology is transforming entry-level roles on Wall Street, which have long been defined by the type of menial work ripe for automation, like drafting pitch decks or building Excel spreadsheets.
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Yet there's also some trepidation — 61% of interns said they're at least somewhat concerned it could replace finance jobs. The numbers are even more dramatic when it comes to the rest of the workforce, with 74% saying they're worried about job displacement in other industries.
The interns seemed similarly mixed about humanoid robots, as robotics becomes one of the hottest bets for tech investors. Physical AI startups, which build machines that can act in the real world, raised $16.3 billion in the first quarter of this year, according to PitchBook.
More than 60% of the interns said they're at least somewhat interested in having a humanoid robot in their home, with 10% saying they'd likely be early adopters. Their interest, the report's authors wrote, "signals how quickly household demand for the technology may build." Around half predicted that robots would replace human jobs, down from 58% last year.
The survey went beyond pure numbers, and Gen Z anxieties were evident in some of the written responses, especially around AI and the economy. An intern said college is no longer an opportunity to figure yourself out, but rather a race to land an internship; another said there's an "AI slop overdose"; one other lamented the competition that feels like it's everywhere.
"Older generations think we may not desire the same things that they did but in many ways we do desire the stability that comes from a career and family," an intern wrote. "But the economic reality makes it feel elusive to achieve this."