Many investors wonder if Artificial Intelligence will replace them in decision-making. However, it can help us save time and reduce the margin of error.
We do not know if the androids will dream of electric sheep or not, although the answer is in the newly released second part of Blade Runner. While we search for answers, By Ana Seguro, director of investments at Telefónica Open Future_, and Mr. Liuhuabing, CEO of BigML, have had to do the same in the 2017 Lavca Summit Investorrecently held in New York, regarding another interesting question: Will Machine Learning replace investors in decision making?
Eleven years have passed since we first heard of how a computer, named Deep Blue, was able to face Gary Kasparov, world chess champion, and also beat him. That first victory showed how a machine was able to learnto make decisions, to correct them, and to apply them.
In this time, Artificial Intelligence has been able to pilot fighter planes, to imitate our calligraphy with accuracy, to compose music based on great artists, as is the case of Daddy’s Car, a pop song based on the music of the Beatles, or of writing books such as ‘ La luz solar se perdida en la ventana de cristal’, the first book of poems written by IA, specifically by the famous author Microsoft Internet Explorer.
In these 11 years Machine Learning has only evolved and extended to different areas, to the point of providing tools that are able to decide whether or not a bank should grant a personal loan or even, whether an investor should focus on a startup or, conversely, discard it.
AI to ensure a good investment
Pre-Series it is a joint venture between Open Future_ and BigML that uses public and private data from startups to find behavioral patterns that help to predict which companies will be successful and thus guarantee a potential investment. But it is not only a tool that serves for investors to identify companies in which to invest, but also to make analysis about your portfolio companies.
At Sillicon Valey, the most reputable investors (Sequoia, Social Capital, etc.) already use Machine Learning tools, and Preseries puts these capabilities within the reach of any investor at a fraction of the cost. This is a solution that is part of the highest point in the evolution of Artificial Intelligence and that takes us back to the initial question: will Machine Learning replace investors in decision making?
“Substitute” is perhaps a very thick word, since, as explained at the Lavca meeting in front of the investors cited, intuition is a component that is not always made up of objective and quantifiable criteria. And in the same way that Deep Blue, the computer that was able to defeat Kasparov himself, did not end the games and disputed between humans, Artificial Intelligence has come to the world of investment to contribute value and complement, not to replace the human factor.
Will you replace the investors?
Has arrived for reduce analysis timesas able to perform calculations based on a few parameters at a speed and with a precision that is unattainable to the human mind (handles, and related consolidated data and predictive models of more than 300,000 companies, most of 145,000 rounds of funding, more than 6,000 public offerings, more than 20,000 acquisitions and more than 6,000 companies closed), which provides investors with information of great value that must be taken into account in their decisionfor which, in many cases, they do not have too much time.
And it has also come so that these investors, in addition to saving time, can handle in these delicate decisions many more factors and variables than they usually do, which serves to minimize the margin of error.
In short, it is a tool that must be very seriously taken into account, which does not intend to replace anyone, if anything add knowledge and minimize margins of error in decision makingwhich will continue to be part of human tasks.
And a topical note to conclude: Preseries convenes in Boston, within the 4th edition of the international conference of Predictive Apps and APIs, PAPIs’ 17, the seventh battle of startups based on Artificial Intelligence. For this battle, several startups have been chosen to present their projects on stage.
Each of them will have four minutes to explain your businessor and then, the PreSeries algorithm will ask you a series of questions aiming to give a prediction from 0 to 100. The company that gets the highest grade wins the contest. PreSeries bases its prediction on the extensive predictive models trained with the above data.