The Rise of the Artificially Intelligent Hedge Fund
1st May 2017
According to Hodjat, the system grabs unused computer power from “millions” of computer processors inside data centers, Internet cafes, and computer gaming centers operated by various companies in Asia and elsewhere. Its software engine, meanwhile, is based on evolutionary computation—the same genetics-inspired technique that plays into Aidyia’s system.
In the simplest terms, this means it creates a large and random collection of digital stock traders and tests their performance on historical stock data. After picking the best performers, it then uses their “genes” to create a new set of superior traders. And the process repeats. Eventually, the system homes in on a digital trader that can successfully operate on its own. “Over thousands of generations, trillions and trillions of ‘beings’ compete and thrive or die,” Blondeau says, “and eventually, you get a population of smart traders you can actually deploy.”