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APRIL 2019Capital Markets CIO Outlook8IN MY OPINIONLeveraging the Power of Artificial Intelligence to Transform Hedge Fund InvestingArtificial intelligence (AI) is one of the most transformative technologies that we have experienced in the last decade and will continue to be for the next decade. IDC predicts AI components and solutions spending will increase from $40.1Bn in 2019 to $95.5 Bn in 2022. In the simplest form, AI can be defined as simulating human-like intelligence in computer systems using learning, reasoning, and self-correction. Many industries such as retail, travel, financial services and healthcare, among others have realized significant business outcomes, performance gains and cost savings as a result of adoption of AI-based solutions such as natural language processing, computer vision, machine learning, robotics, and virtual assistants. Although building blocks for AI solutions have existed for many years, two primary drivers for recent rapid adoption of AI-based solutions can be attributed to cheaper and faster access to compute and storage infrastructure, and the unprecedented explosion of data generation. IDC estimates that data generation will increase from 33 zettabyes in 2018 to 175 zettabytes in 2025 (1 zettabyte = 1 trillion gigabytes). Manual processing of primarily unstructured data at this scale is impossible. This is where machine learning and artificial intelligence can provide an unparalleled competitive advantage to parse massive volumes of data, both internal to an organization and external market or socio-economic information, to create decision models and augment human intelligence with infinite machine processing power.According to a recent hedge fund survey conducted by industry data firm Barclay Hedge in July 2018, AI and machine learning was used by over 50 percent respondents to generate trading ideas and optimize investment portfolios. Rashmi Gopinath, Partner, M12Rashmi Gopinath
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