AI In The Stock Market – When Did It All Start?

You may be under the impression that Artificial Intelligence is a new technology. Can you make a guess – how old AI and finance are? Hold on a moment – we will answer it for you. However, we are pretty sure you would have made a wrong guess. 

AI is an indispensable part of the financial world. AI can understand complex mathematical relationships, and its automation ability is ruling the world. Today, there is so much happening around it. Are you interested to learn how it all started?

Artificial Intelligence – History

Though it is a common buzzword today, AI has existed for quite some time. You can trace the origins of AI to classical philosophers’ times. However, the official recognition can be traced back to the 1950s. The term was coined in 1956 at the Dartmouth Summer Research Project on Artificial Intelligence (DSRPAI) hosted by John McCarthy and Marvin Minsky. You can Google these personalities to know more about them.

Fast forward to the 1980s – more than two-thirds of Fortune 1000 companies had at least one AI project under development. Coming to the question asked earlier – AI and finance? In 1982, AI made its presence felt in the financial services industry. Back then, James Simons, an award-winning mathematician, founded the quantitative hedge fund Renaissance Technologies. It is an amazing story and journey – we are going to cover it in detail in future articles.

AI and finance – History

AI began to gain prominence in the finance world in the 1980s. Experts systems emerged during these times – an excellent commercial product in finance. Expert systems are intelligence systems based on knowledge – used to predict market trends and provide customized financial plans in the financial industry.

The financial institutions and banking industry began to increasingly use expert systems to reduce the risks of human mistakes. It helped in financial analysis, international business, currency exchange, business development, and bank management.

Fast forward to the 1990s – there was a hype about fraud detection. The FinCEN Artificial Intelligence system (FAIS) reviewed over 200,000 transactions per week. Over two years, the system could identify 400 potential money laundering cases worth nearly $1 billion. All this in the 1990s. Amazing, right?

AI in stock markets – History

Artificial intelligence is to investing what fire was to cavemen. As fire changed everything for the cavemen – so is AI changing the game for investors.

In the 1980s, we saw the growth of artificial neural networks and fuzzy systems. It was incorporated to give financial tools better predictive power. The first artificial intelligence-driven program that supposedly predicted the stock market was – the ‘Protrader expert system.’ It was designed by California State University’s School of Business student K.C Chen and University of Illinois’ Ting-peng Lian. These two experts successfully predicted the famous 1986 87-point drop in the Dow Jones Industrial Average.

Why so much hype now?

Based on the above information, it is clear that AI has been a matter of interest for businesses across the globe. Not only this, it has been a matter of interest for science-fiction writers. It has been the buzzword recently – why? It is primarily for three main reasons:

  • Data abundance: A few decades back, it was impossible for any industry to gather and work with huge data volume. Today the structured and unstructured data volume produced daily is enormous.
  • Computing power: Even if the volume was available back then, it would not have been possible to compute the data as machines were not powerful for processing. Also, processing was not cheap. Today the processing power is high. Also, data is processed cheaply.
  • Complex algorithms: Improvements with artificial neural networks have occurred at a fast speed.

Why are we discussing history?

You must be wondering – why are we discussing history? There is a strong reason for it. If you look at the history, you can see that we are not using a new thing. If you dig in deep, you notice – people and investors have been using it over the decades – may be at a small scale and perhaps not with high accuracy. There have been many technologies and concepts that originated in the past. Not all of them were able to survive. Only a few did. They survived and evolved because they had the potential to change the world. AI is one such technology.

Conclusion – Intelligent Adoption Is the Key

AI is an essential ingredient for traders and investors today. It is actively replacing human statisticians with its huge data processing abilities. AI has altered the stock markets of the 21st century, and it will continue to do so in the future as well.

Today, we cannot ignore AI’s existence in the financial world. To ensure the retail investor makes the most of this technology – intelligent adoption is essential. 

Jarvis Invest has done it. We have created a platform that uses the power of AI and benefits retail investors. Today, it is possible for every retail investor to use AI in stock investing. 

As the internet is in every household today, we want to take AI-based stock investing to every home. You may be a stock market expert, a new investor, or someone with no stock market background – you can use Jarvis Invest

Gone are the days when you had to spend days before picking a stock. Start investing in direct stocks in just a few minutes. Download the app now.

You may be under the impression that Artificial Intelligence is a new technology. Can you make a guess – how old AI and finance are? Hold on a moment – we will answer it for you. However, we are pretty sure you would have made a wrong guess. 

AI is an indispensable part of the financial world. AI can understand complex mathematical relationships, and its automation ability is ruling the world. Today, there is so much happening around it. Are you interested to learn how it all started?

Artificial Intelligence – History

Though it is a common buzzword today, AI has existed for quite some time. You can trace the origins of AI to classical philosophers’ times. However, the official recognition can be traced back to the 1950s. The term was coined in 1956 at the Dartmouth Summer Research Project on Artificial Intelligence (DSRPAI) hosted by John McCarthy and Marvin Minsky. You can Google these personalities to know more about them.

Fast forward to the 1980s – more than two-thirds of Fortune 1000 companies had at least one AI project under development. Coming to the question asked earlier – AI and finance? In 1982, AI made its presence felt in the financial services industry. Back then, James Simons, an award-winning mathematician, founded the quantitative hedge fund Renaissance Technologies. It is an amazing story and journey – we are going to cover it in detail in future articles.

AI and finance – History

AI began to gain prominence in the finance world in the 1980s. Experts systems emerged during these times – an excellent commercial product in finance. Expert systems are intelligence systems based on knowledge – used to predict market trends and provide customized financial plans in the financial industry.

The financial institutions and banking industry began to increasingly use expert systems to reduce the risks of human mistakes. It helped in financial analysis, international business, currency exchange, business development, and bank management.

Fast forward to the 1990s – there was a hype about fraud detection. The FinCEN Artificial Intelligence system (FAIS) reviewed over 200,000 transactions per week. Over two years, the system could identify 400 potential money laundering cases worth nearly $1 billion. All this in the 1990s. Amazing, right?

AI in stock markets – History

Artificial intelligence is to investing what fire was to cavemen. As fire changed everything for the cavemen – so is AI changing the game for investors.

In the 1980s, we saw the growth of artificial neural networks and fuzzy systems. It was incorporated to give financial tools better predictive power. The first artificial intelligence-driven program that supposedly predicted the stock market was – the ‘Protrader expert system.’ It was designed by California State University’s School of Business student K.C Chen and University of Illinois’ Ting-peng Lian. These two experts successfully predicted the famous 1986 87-point drop in the Dow Jones Industrial Average.

Why so much hype now?

Based on the above information, it is clear that AI has been a matter of interest for businesses across the globe. Not only this, it has been a matter of interest for science-fiction writers. It has been the buzzword recently – why? It is primarily for three main reasons:

  • Data abundance: A few decades back, it was impossible for any industry to gather and work with huge data volume. Today the structured and unstructured data volume produced daily is enormous.
  • Computing power: Even if the volume was available back then, it would not have been possible to compute the data as machines were not powerful for processing. Also, processing was not cheap. Today the processing power is high. Also, data is processed cheaply.
  • Complex algorithms: Improvements with artificial neural networks have occurred at a fast speed.

Why are we discussing history?

You must be wondering – why are we discussing history? There is a strong reason for it. If you look at the history, you can see that we are not using a new thing. If you dig in deep, you notice – people and investors have been using it over the decades – may be at a small scale and perhaps not with high accuracy. There have been many technologies and concepts that originated in the past. Not all of them were able to survive. Only a few did. They survived and evolved because they had the potential to change the world. AI is one such technology.

Conclusion – Intelligent Adoption Is the Key

AI is an essential ingredient for traders and investors today. It is actively replacing human statisticians with its huge data processing abilities. AI has altered the stock markets of the 21st century, and it will continue to do so in the future as well.

Today, we cannot ignore AI’s existence in the financial world. To ensure the retail investor makes the most of this technology – intelligent adoption is essential. 

Jarvis Invest has done it. We have created a platform that uses the power of AI and benefits retail investors. Today, it is possible for every retail investor to use AI in stock investing. 

As the internet is in every household today, we want to take AI-based stock investing to every home. You may be a stock market expert, a new investor, or someone with no stock market background – you can use Jarvis Invest

Gone are the days when you had to spend days before picking a stock. Start investing in direct stocks in just a few minutes. Download the app now.