Traders work on the floor of the New York Stock Exchange on March 13, 2024.
Brendan McDermid | Reuters
A new company will attempt to crack the code of integrating artificial intelligence and investing, and will focus primarily on helping individual traders make buying and selling decisions.
The company, called iFi AI, launches Wednesday. The company will use AI models to help generate projected returns for stocks over different time periods, according to Ron Insana, CEO of iFi AI and CNBC senior analyst and commentator.
“It’s a big help when you’re considering making a decision whether or not to buy a stock, and you get an expected rate of return that says it’s going to increase 3% next month,” Insana said . CNBC. “There is some comfort in the decision-making process, also knowing that our forecasts contain more data than a human being can ingest in a given day.”
IBM’s Watsonx powers the AI programs behind the new company, integrating fundamental information, technical analysis and other factors to make projections about where the stock will go. AI programs are already being used to help make decisions with $6 billion managed institutionally, Insana said.
There will be multiple tiers and pricing tiers for iFi AI, most aimed at self-directed traders and a higher tier, with broader portfolio tools, designed for financial advisors, according to Insana.
The use of high-tech in finance was common long before the latest wave of AI, but Insana said the new programs are more dynamic than the types of quantitative strategies that have long been used in hedge funds.
“The difference between quantitative analysis and AI-based analysis is that the AI learns and continues to learn and teach itself,” Insana said.
The new company will face competition from other AI-related startups and Wall Street giants in trying to combine the new technology with commerce. For example, Morgan Stanley named its first head of AI earlier this month.
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