High-earning traders will quickly become an endangered species as AI takes over the financial sector.
For the past year, we as a society have been worried sick about artificial intelligence eating the jobs of 3 million truck drivers. Turns out that a more imminently endangered species are the Wall Street traders and hedge fund managers who can afford to buy Lamborghinis and hire Elton John to play their Hamptons house parties.
So maybe “hooray for AI” on this one?
Financial giants such as Goldman Sachs and many of the biggest hedge funds are all switching on AI-driven systems that can foresee market trends and make trades better than humans. It’s been happening, drip by drip, for years, but a torrent of AI is about to wash through the industry, says Mark Minevich , a New York-based investor in AI and senior adviser to the U.S. Council on Competitiveness. High-earning traders are going to get unceremoniously dumped like workers at a closing factory.
“It will really hit at the soul of Wall Street,” Minevich tells me. “It will transform New York.”
Software is Always Learning
Some of these AI trading systems are being built by startups such as Sentient in San Francisco and Aidyia in Hong Kong. In 2014, Goldman Sachs invested in and began installing an AI-driven trading platform called Kensho. Walnut Algorithms , a startup hedge fund, was designed from the beginning to work on AI. Infamously weird hedge fund company Bridgewater Associates hired its own team to build an AI system that could practically run the operation on its own. Bridgewater’s effort is headed by David Ferrucci, who previously led IBM’s development of the Watson computer that won on Jeopardy!
AI trading software can suck up enormous amounts of data to learn about the world and then make predictions about stocks, bonds, commodities and other financial instruments. The machines can ingest books, tweets, news […]