Ray Kurzweil has a hedge fund

It’s called FatKat, and apparently uses AI to make stock buy and sell decisions, according to the NY Times. The article goes on to discuss hedge funds that use AI and genetic algorithms to find arbitrage opportunities that less sophisticated software might miss. An emerging problem is the ‘black box’ issue: machines evaluate completely random rules that humans would never consider and combine the most successful ones. The evolved machine concepts can be completely outside human understanding or intuition.

As a result, the decisions that come out are such that a human has no idea if the black box is broken or operating at peak efficiency. Says MIT’s Andrew Lo “As with any black box, if you don’t know why it works, you won’t realize when it’s stopped working. Even a broken watch is right twice a day.” Scary…