As anyone might have noticed, technology has totally changed the way banking operates nowadays and it is perhaps even more so when it comes to professional trading. Over the years, banks have created complex algorithms and software application in order to maximize the returns from their hedge funds. Nowadays, it is common for the trading desks of most hedge funds at banks to have highly complex software applications that can help them boost their returns.
However, technology does not stand still and in this regard, it must be said that artificial intelligence (AI) is perhaps the branch of new tech that is going to have a far-reaching industry across a range of industries in the years to come. JP Morgan was one of the earliest banks to have used AI when it used it in its investment banking division but now it has emerged that the bank is going to invest in AI through its own hedge fund. According to reports, the fund is going to invest in funds that are involved in using machine learning in order to profit from the markets and the fund that will be used to deploy those funds is being called the Machine Learning Fund Ltd. The fund will be under the control of the bank’s “hedge fund of hedge funds” operation that is worth $15 billion.
Over the course of past decades, the bank has spent hundreds of millions of dollars in order to gain an edge over its rivals in the tech race. However, this particular strategy is particularly inventive since it will allow the company to have stakes in hedge funds which use the latest in AI technology in order to claim profits. In the long run, JP Morgan will probably have the option of completely taking over a firm that might show some early promise with regards to their tech and also their returns. The number of AI hedge funds has increased significantly over the course of the past few years and perhaps it is about time for a banking giant to tap into that market.