Investors Turn To AI-Guided Dealmaking To Gain Edge Over Rivals 20
Venture capital funds, private equity groups and accountancy firms are using the latest artificial intelligence to pick acquisition targets and start-ups for investment, betting the technology can give them an edge over rivals. From a report: Big Four accountant KPMG, hedge fund Coatue and venture capital firm Headline are among those using the latest AI tools to advise clients and help guide their dealmaking. With investors under pressure to identify the next high-growth start-up at a time when few companies are going public, some argue that dealmakers can benefit from using generative AI for tasks such as assessing a company's growth potential based on financial analysis.
"If you can train or use a model that gets a lot of efficiency first, you will get an advantage in that particular area of the business that is harder for a second mover to do," said Par Edin, who leads innovation in KPMG's US deal advisory and strategy business. "It is about getting there first for each and every particular use case." The pace of artificial intelligence development over the past six months, triggered by the release of OpenAI's popular ChatGPT -- a chatbot that provides humanlike answers to queries -- has spurred investors to use the tools to identify fast-growing companies and acquisition targets.
"If you can train or use a model that gets a lot of efficiency first, you will get an advantage in that particular area of the business that is harder for a second mover to do," said Par Edin, who leads innovation in KPMG's US deal advisory and strategy business. "It is about getting there first for each and every particular use case." The pace of artificial intelligence development over the past six months, triggered by the release of OpenAI's popular ChatGPT -- a chatbot that provides humanlike answers to queries -- has spurred investors to use the tools to identify fast-growing companies and acquisition targets.
maybe that's a bad place to live? (Score:3, Interesting)
If the insurance is so high where you live, doesn't that mean the risk is really high there? Maybe that's not a good place to live?
Like many cities, we've got a river that flows through ours here. But it has a large flood plane in one area, and there are houses in that area that have been there for decades. Despite being flooded many times, they just kept rebuilding. The last major flood we had, the city had had enough and just condemned the entire area, and they all had to move out. Some people will just stubbornly refuse to do the smart thing, and have to be forced.
We even had a very small island right in town that had a dozen houses on it for almost a century. Every time there was a flash flood the city had to come rescue them off the island. Like the other area, the city finally condemned the entire island during the last major flood because the clowns were just planning to move back in when the water came down. The city's rescue crews have other, more responsibly-behaved people that we need to be able to rescue in actual, unpredictable situations, and they were putting other lives at risk in addition to their own. (regular citizens, in addition to the repeated risk to the rescue crews)
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I think you posted to the wrong thread. You want the next article.
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Wrong article. Right article: https://news.slashdot.org/stor... [slashdot.org]
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ug. yeah, slashdot bug, it does that every rare now and again. I don't think there's any way for me to fix it.
Of course they are (Score:5, Insightful)
Of course investors are leaning into any new tools available to analyze companies. Why wouldn't they? Especially if they are low effort. Even if the overall benefit of using ChatGPT-like tools to analyze potential business deals is low, the effort is so low they would be silly to not include them in the process.
low benefit (Score:3)
What if the overall benefit is so low that it is negative? I guess that would require the effort to be negative as well.
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Probably (if they have any sense) it would be used as an initial filter, to exclude as many companies as possible and deliver a small set that they then put more effort into investigating personally. It's going to be difficult to come out any worse from doing that. It's like an employer who has a stack of resumes. The goal is to exclude as many as possible, even some good candidates, simply for the purpose of focus'ing your focus.
Re:Of course they are (Score:5, Insightful)
In the 1600's I think, French doctors did a study and determined that patients had a better survival rate if they were *not* treated by a doctor. Sometimes the so-called "experts" really aren't.
I am sure some form of AI can do very well at predicting things like stock prices, but I highly doubt ChatGPT is going to be it based on my own experiences with trying to get it to write node.js code - which it tried to do but had the unfortunate feature of relying on libraries of functions that didn't exist :)
ChatGPT will make shit up if it can't fake an answer. They will need to deal with that aspect first :P
Re: Of course they are (Score:3)
AI ~= statistics (Score:3)
AI, as neural net AI, is just statistics where you don't know what exactly is being measured.
Economics 2.0 (Score:2)
In his book Accelerando, Charlie Stross introduces the concept of "Economics 2.0" whereby normal humans are unable to compete with posthuman intelligences.
Sounds like I need to re-read that story to help me prepare for our inevitable future...
Advising firms that don't exist (Score:3)
Sort of makes sense for venture capital (Score:3)
Venture capitalists are wrong most of the time. Successful bets pan out about 4% [forbes.com] of the time. That's about 56% survival at each round of funding, which comes out to about 4% when we go to Round 7. So, using an inaccurate AI model is not so critical. If the AI model is followed blindly, then it just needs to improve on 56% accuracy at each round. If the AI model is used as data added to other research, then it shouldn't hurt.
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Makes me think of my graduate economics classes where a "reliable" valuation model is 60% accurate.
It won't make much difference (Score:3)
Investment decisions are almost random already anyway. In one study, investment managers couldn't even perform better than blindfolded monkeys throwing darts.
https://www.rock-wealth.co.uk/... [rock-wealth.co.uk].
WHY YES (Score:2)
"I am not an AI, but venture capital investments in AI investments should include many phased plasma rifles in the 40-watt range."
An edge of stupid maybe (Score:2)
Although the way many "investments" go these days, that may be an advantage...
So the people who run the economy (Score:3)
The only one who ever pays for their incompetence is you and me.