November 1, 2017
Man Group is an example of how AI is put to production at hedge funds. Man Group is one of the world’s largest hedge funds with $96 billion under management. Since 2014, Man has been using machine learning algorithms to make autonomous trade decisions in its AHL fund with very positive results.
Man’s engineers set boundary parameters for their ML algorithms including exposure caps, asset classes, and trading costs. They then provide the algorithms with data and let them discover patterns and correlations that would go unnoticed to human analysts. The ML algorithms constantly compare new data with historical patterns and try to guess how changes will unfold in the future. Man is applying the model to fast trade decisions as well as educated predictions for several weeks into the future.
AI is the backbone of a surprising variety of businesses and seamless experiences they are able to offer – whether it’s an entertainment business or financial services. Spotify, the largest on-demand music service in the world, which counts >60 million subscribers (as of July 2017), and >140 million active users (as of June 2017), is as much of a curious and important use case as the Man Group.
There’s no doubt that Spotify is a data-driven company; it uses data in every part of the organization to drive decisions. As the service continues to acquire data points, it’s using that information to train the algorithms and machines to listen to music and extrapolate insights that impact its business and the experience of listeners.
One example is the Discover Weekly feature on Spotify that reached 40 million people in its first year. Every user gets a personalized playlist every week from Spotify of music that they have not heard before on the service, but that will be something the listener is expected to enjoy – a modern-day version of a best friend creating a personalized mix tape.
In an effort to make its mountains of data available to musicians and their managers, Spotify just launched the Spotify for Artists app that provides mobile access to analytics – everything from which playlists are generating new fans to how many streams they are getting overall. Think Google Analytics for musicians.
With the acquisition of Niland, the fourth acquisition for 2017, Spotify will use the API-based product and machine learning to provide its users with better search and recommendations to help them discover music they will like.
Earlier this year, Spotify acquired the blockchain startup Mediachain Labs to help develop solutions via a decentralized database to better connect artists and licensing agreements with the tracks on Spotify’s service.