2018 spotlight: ML/AI
GS was among the pioneers to replace human traders with AI. At its height back in 2000, the US cash equities trading desk at Goldman Sachs’s New York headquarters employed 600 traders, buying and selling stock on the orders of the investment bank’s large clients. Today there are just two equity traders left. Automated trading programs have taken over the rest of the work, supported by 200 computer engineers. The pattern will be repeated over and over, with 'Warren in a Box' being the most recent example.
'Warren in a Box' to Pick Stocks for First Nordic AI Fund
- Finnish fund manager FIM is introducing the first investment fund in the Nordic region, where a self-learning algorithm gets to pick all the stocks.
- The FIM Artificial Intelligence fund seeks to tease out patterns even an experienced fund manager may not detect. This is the next revolution across society, including in investing, Chief Investment Officer Eelis Hein, who oversees $6.6 billion in investments at FIM Asset Management, said.
- The Warren in a box technology, was in development for >2 years.
- The algorithm picks 50 stocks from a pre-screened universe of 4,000 liquid, developed-market equities, each with a market capitalization of 1 billion euros or more. After running the Warren algorithm, the AI applies a team-building algorithm, churning out a suitably diversified portfolio from the individual stock picks.
- The database contains fundamental data on 700 variables going back to 1986. The fund’s allocation takes place every six months and the actual trading is done by a human.
How Verizon is Building a Big Data and AI Culture
- Verizon Communications is a massive telecommunications conglomerate with $126 billion in 2016 revenues.
- Verizon has a variety of different analytics and AI groups scattered around the company.