AI investing in AI

„By far the best investment you can make is in yourself“ – that is my favorite Warren Buffett‘s advice. It turns out, that also artificial intelligence took this lesson from “The Oracle of Omaha” to heart. Probably, in the future investing is going to be boring, because AI will be investing only in AI…

Motherbrain

Monitoring over 10 millions companies, processing data from many sources, and, ultimately more than 100 million dollars invested. Isn’t that impressive? Such results are the merit of Motherbrain – a machine-learning platform, an associate of EQT Ventures.

As we can read on the EQT Ventures’ website „The core purpose of Motherbrain is to help EQT’s deal teams predict what the next success will be“. But how does it actually look like?  „Motherbrain uses convolutional neural networks, or CNNs, the most popular form of machine learning, to review time-series data about companies to help guide where the firm should invest. The technology has seriously improved EQT Ventures’ ability to scope out deals early in the pipeline“ – explained Landgren in an interview with ZDNet.

We must also bear in mind, that Venture Capital investments are associated with a high risk of startup bankruptcy. It is enough to say, that in 2020 about 75% of U.S. venture-backed startups failed. Effective forecasting poses a serious challenge for both Motherbrain and EQT Ventures’ Partners. Therefore, it pays to be patient and goal-oriented.

So far 7 companies were directly identified by Motherbrain. Curiously, one of them is Standard Cognition, which offers AI-Powered Autonomous Checkout. For me, this is a sign of the times. Research and advisory firm Gartner estimates that three-fourths of the venture capitalists, globally, will be using artificial intelligence to make their decision by 2025.

Holy Grail of stock market

„Anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October, watching the Boston Red Sox win the World Series“.

JOHN HENRY (ARLISS HOWARD) – MONEYBALL (2011)

In my opinion, the quote above perfectly fits the current situation. The stock market is changing rapidly. Everyone wants to analyze information faster, increase profits ,and base on more precise calculations. There is no doubt, that dealing with a large amount of data opens the door for AI. Also the biggest players are aware of that. One of them once said, that “Artificial intelligence is to trading what fire was to the cavemen.”

The Holy Grail stock trading is widely defined as a system, that always brings profit to the investor, regardless of any circumstances. I have to admit, that I didn’t believe such a perfect system exists or it can appear in the future. However, my attitude changed after reading an article about J4 Capitals. Check it out, it might interest you!

References

Warren Buffett: Investing in Yourself

How EQT Ventures’ Motherbrain uses AI to find promising startups

Motherbrain – EQT

A venture capital firm’s AI platform is behind $100 million of its investments

EQT Ventures’ AI platform Motherbrain backs CodeSandbox

How an AI ‘Motherbrain’ helps venture capitalists pick investments

Standard Cognition

Gartner predicts 75% of VCs will be using AI instead of their ‘gut feel’ to make decisions by 2025 — a path that companies are already discovering

HOW AI TRADING TECHNOLOGY IS MAKING STOCK MARKET INVESTORS SMARTER

Holy Grail Trading Strategy

Can an artificial intelligence learn to beat the stock market?

J4 Capital reinvents AI-backed investing

Report: 75% of Venture-backed Start-ups Fail

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