Now, investors allows machines to take decision
By siliconindia   |   Thursday, 15 July 2010, 22:09 IST
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Washington: For decades, computer scientists have been pursuing artificial intelligence (AI), the use of computers to simulate human thinking. But in recent years, rapid progress has been made in machines that can listen, speak, see, reason and learn, in their way. Now, the number of investors who are turning to AI to make investment decisions have increased, reports S Cott P Atterson from The Wall Street Journal. Investors are trying to use "machine learning", a branch of AI in which a computer program analyses huge chunks of data and makes predictions about the future, to take proper decisions. With artificial intelligence, programmers don't just set up computers to make decisions in response to certain inputs. They attempt to enable the systems to learn from decisions, and adapt.It is used by tech companies such as Google to match Web searches with results and Net Flix to predict which movies users are likely to rent. Rebellion Research, a small New York hedge fund with around $7 million in capital is part of a new wave of firms using machine learning to trade. It has been using a machine learning programme it developed to invest in stocks. Run by a small team of 20 members, Rebellion has a solid track record, topping the Standard and Poor's 500 stock index by an average of 10 percent a year, after fees, since its 2007 launch in June. "It's pretty clear that human beings aren't improving," said Spencer Greenberg, 27 years old and the brains behind Rebellion's AI system. "But computers and algorithms are only getting faster and more robust," Greenberg added. Some sophisticated hedge funds such as Renaissance Technologies, based in East Setauket, New York, are said to have deployed AI to invest. But, some firms that have experimented in AI are skeptical it is anywhere close to working.