FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.
31 March 2024 marked the 25th anniversary of the release of the Wachowskis’ groundbreaking movie, The Matrix. The plot involves an artificial general intelligence network that has enslaved humanity, which is a possibility that could be approaching soon given advances in technology.
Jensen Huang, chief executive of technology company Nvidia’s has predicted that artificial general intelligence will reach human-level capabilities within five years.
Ray Kurzweil estimated in his 2005 book, The Singularity is Near, that an AI agent would become as smart as a human in 2029. Kurzweil, currently a principal researcher and AI visionary at Google, has made 147 predictions about technology and has an 86% accuracy rate according to the Futurism blog.
Finance is not immune to the impact of AI. Matt Long, global capital markets lead at Accenture, said in a blog that generative AI will transform the end-to-end value chain for all capital markets firms.
Long estimated that nearly three quarters, 70%, of all working hours in capital markets are in scope for being changed by generative AI, with 42% in scope for augmentation.
“This can be explained by the massive data flows and the amount of unstructured or semi-structured data that currently characterize the workflows across the different capital markets industry segments,” wrote Long.
As a result, Long said capital markets firms that adopt AI at scale will need to develop new roles and skills amongst employees.
Amongst investors, CalPERS, the largest US pension fund, and Stanford University School of Engineering announced that they will be creating a Long-Term Investing Fellowship Program to develop the necessary skills for the next generation of institutional investors.
Stanford Engineering will select and hire graduates from undergraduate and masters’ programs in the spring of each year. Students will design a project, engage in an intensive apprenticeship at CalPERS, and return to Stanford to present their findings to the next group of incoming fellows.
Marcie Frost, chief executive of CalPERS, said in a statement: “The program will not only provide students with a remarkable opportunity, it will also allow CalPERS to continue its mission of developing talent and building a successful learning and teaching culture.”
As Agent Smith says in The Matrix, you should never send a human to do a machine’s job.
He also warns: “Evolution, Morpheus, evolution. Like the dinosaur. Look out that window. You’ve had your time. The future is *our* world, Morpheus. The future is our time.”
