Zachary Okun is a Junior Financial Analyst at I Know First.

Artificial Intelligence Applications and the Stock Market

Summary

Artificial Intelligence (AI) Introduction

What is AI

AI in Silicon Valley

Three uses for AI

Deeper look into Watson and DeepMind

I Know First and AI

AI Introduction

Technology as we know it, has made extraordinary advancements the past few decades. Just not long ago, the only thing we were able to do on our phones was make calls. Now we basically have the world on our phones. Much of this amazing advancement is attributed to artificial intelligence (AI). AI is when a computer systems are able to complete human tasks, and take its information to maximize success at an arbitrary goal.

AI is all around us, at every second of the day. We live in the knowledge era, have access to anything, anytime, anywhere. We don’t physically see it, but AI is all around us, enabling us to live the way we do. Take for example the search engine of Google. When one places a Google search, they instantly get back information within milliseconds and millions of results. Google did not start out this way. It has been using AI to help it become the most popular search engine in the world. AI doesn’t just help us sift through information, it is making our lives easier and convenient.

What is Artificial Intelligence?

Artificial Intelligence is a subsector in computer science that creates intelligent machines that work and sometimes react like humans. The simplest form of AI is a computer system accomplishing one human task. It doesn’t have to do it in a human way, but rather in another way that allows it to be smart, also referred to as Weak AI. There is also another aspect of AI where it is actually learning from itself, better known as Strong AI. The AI will reflect on what is trying to accomplish and see if there is an easier way to do it, or another outcome that would generate more success. This area of AI is being explored more and more by huge tech companies such as Google, Microsoft, Apple, and IBM. “The AI race in Silicon Valley is on” as Meghan Neal stated.

AI in Silicon Valley

It is no mystery that people are turning more to AI devices because how convenient it makes their lives and how they can perform tasks in a simple way for the user to understand. Take for example an individual. Instead of going outside and feeling the temperature, or even further opening their phone to check it, they can simply ask their iPhone “Siri, what’s the weather like?” and it will give him or her a response. AI is also used in the business field to understand trends, sift through information, innovate. That is essentially what IBM’s Watson does. It is stated on their website that Watson “is a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unconstructed data”. It’s clear to see why worldwide corporations, like Apple, Microsoft, IBM, Facebook, and Google are in a race to create the best and most reliable AI products for a wide range of applications.

AI for Personal Convenience, Business Development, Futuristic Thinking

There are three different uses for AI, personal convenience, business development, and futuristic thinking.

The first of the three was already alluded to before, when talking about Apple’s Siri. Competitors of Apple such as Amazon, and Google have come out with a different kind of product to also be of convenience in the house. Amazon has had on the market for quite some time now, a product called the echo. The newest feature that just came out to it is ‘Alexa’. According to Amazon, “Alexa—the brain behind Echo—is built in the cloud, so it is always getting smarter”. The echo is a house friendly product that can be placed anywhere, and once ‘Alexa’ is said, the echo will know you are talking to it and carry out a command for you. Google is now competing with Amazon directly as they recently showcased their new product called ‘Google Home’. It is challenging the echo by streaming music, manage daily tasks, and ask google.

Moving on to Business Development, top tech companies out there like Facebook, Instagram, Twitter and even Google rely on artificial intelligence to help their businesses. One-fifth of the world is on Facebook now, and constantly checking it to keep up with our social lives. But how does Facebook know what stories or post a user would find interesting? The answer to this lies behind AI. Instagram, which was bought by Mark Zuckerberg in 2012, their platform was reliant off of posts in a time line. Now they are making the switch to relevant posts to users using AI. AI helps both of these large social media companies, sift through all these posts and allow users to get the most interesting information to them first. On top of that, “It also conducts qualitative reviews of new products with focus groups and direct user feedback”, according to Fortune.

Lastly, there are companies using AI for projects that are beyond a human comprehending. IBM and Google have come up with AI units that are being fed information, and help make decisions and improvements to our world. They also are able to learn on their own without any human intervention. IBM’s Watson is famously known for its appearance on jeopardy, crushing its human competitors. Google has created DeepMind, with the mission to make the world a better place.

Looking Deeper into Watson and Deepmind

IBM’s Watson “is a cognitive system enabling a new partnership between people and computers”. There is a massive amount of information that is unconstructed, such as blog, tweets, posts, that it’s almost impossible to do research in a certain area and know it all. IBM saw this, and with the amazing technological advancements they have made, they created Watson. It works similar to a Human. It’s a simple four step process of observing, interpreting, evaluating, and deciding. Watson does this exact same process except at massive speeds. It has a corpus knowledge, which means humans put in a lot of information that is necessary. This allows Watson to answer any relevant questions, hypothesize, and learn through interaction. IBM has high hopes that Watson will help change the world and make advancements in key fields to help mankind.

Google’s DeepMind has the same mission. They are using it to “make the world a better place”. DeepMind was originally called Alpha Go and beat a human in the hardest game in the world called Go. This was the beginning of tech companies taking a serious look into the AI field. DeepMind is able to self-learn without any alterations. Reinforcement allows it to improve itself, by learning from its mistakes and errors. Google hopes to put DeepMind in difficult situations and fields, and come up with successful outcomes. This will help speed up breakthroughs in healthcare and science. As stated before, the goal is to “make the world a better place”, but a longer-term goal is to understand the human brain. Only 10% of the human brain is used, and it is the one place in the body that scientist don’t know enough about. Google hopes their AI unit can change that.

I Know First’s Future with AI

I Know First uses Artificial Intelligence for its algorithm based system. An algorithm is a set of instructions made for a computer to execute, and artificial intelligence is when the computer system learns to better its performance. We have constantly been developing new algorithms to help investors get the best returns possible. We are a future forecasting company with the help of our AI algorithm. We believe that AI shouldn’t just be used to execute trades at a certain time to maximize profits, but to use the information and predict the future in markets. I Know First also uses algorithms not only for market forecast, but also for portfolio management and asset allocation, i.e Robo-Advizing, and in general, to forecast the rise and fall of technology trends, forecast demand for goods and services, and to manage resources.