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Hedge fund to replace Yuppie moneymen with AI

by on26 December 2016


Couldn’t happen to a nicer breed of people


While most people are worried about blue collar jobs being replaced by robots, it looks like the white collar money men have more to fear.

After decades of stuffing up the third world it appears that that their jobs can be done just as efficiently with AI algorithms.

Bridgewater Associates, the world’s largest hedge fund, is building a piece of software to automate the day-to-day management of the firm, including hiring, firing and other strategic decision-making.

The project is at the request of billionaire founder Ray Dalio, who wants to ensure the company can run according to his vision even when he’s not there.

“The role of many remaining humans at the firm wouldn’t be to make individual choices but to design the criteria by which the system makes decisions, intervening when something isn’t working.”

The firm, which manages $160 billion, created the team of programmers specializing in analytics and artificial intelligence, dubbed the Systematized Intelligence Lab, in early 2015. The unit is headed up by David Ferrucci, who previously led IBM’s development of Watson, the supercomputer that beat humans at Jeopardy! in 2011.

The outfit already is heavy on the IT. Meetings are recorded and staff asked to grade each other throughout the day using a ratings system called “dots”. The Systematized Intelligence Lab has built a tool that incorporates these ratings into “Baseball Cards” that show employees’ strengths and weaknesses. Another app, dubbed The Contract, gets staff to set goals they want to achieve and then tracks how effectively they follow through.

All this is part of a cunning plan called PriOS, management software that Dalio wants to make three-quarters of all management decisions within five years.

PriOS could include finding the right staff for job openings and ranking opposing perspectives from multiple team members when there’s a disagreement about how to proceed.

The machine will make the decisions, according to a set of principles laid out by Dalio about the company "vision".

Automated decision-making is appealing to businesses as it can save time and eliminate human emotional volatility when they are having a bad day. Machines can also be guaranteed to make legal and ethical decisions.

Soon bankers will be dinosaurs and will be headed towards the tar pits of history along with their need for huge bail outs when they stuff up – at least that is the theory.

Accenture issued a report recently claiming that artificial intelligence will free people from the drudgery of administrative tasks in many industries. The company surveyed 1,770 managers across 14 countries to find out how artificial intelligence would impact their jobs.

“AI will ultimately prove to be cheaper, more efficient, and potentially more impartial in its actions than human beings,” said Accenture.

However, they didn’t think there was too much cause for concern. “It just means that their jobs will change to focus on things only humans can do.”

Last modified on 26 December 2016
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