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A.I.CreatesIntellectual Capital Club

Creating intellectual capital for partnerships in predictive analytics and artificial intelligence

Dr. Valery Tsourikov

Minsk 2011

tm

Valery Tsourikov 2011 (c). All rights reserved

Part 1. Business Model: Slides 3-10

Part 2. Predictive Analytics, A.I. for content generation: Slides 11-26


Modern Artificial Intelligence Means Big Business

• Machine Learning, Combinatorial Intelligence, Semantics, Predictive Analytics can generate:– Better content– Faster &– Cheaper, than human team alone

• Business opportunity is really big. For example, over the past five years IBM spent $14B for 24 analytics acquisitions.

How to exploit this mega-trend?


Gartner Group. Hot Technologies for 2011: Next-Generation Analytics and Social Analytics

Next-Generation Analytics: It is becoming possible to run real-time simulations of each individual business action to predict their future outcome rather than simply providing data about past interactions.


Idea of the Intellectual Capital Club

1. Our Ph.D. teams develop A.I. software2. Joint venture is formed with strategic partner or investor3. JV exploits hot market opportunity

World Markets

Joint Venture

Strategic Partner/Investor

A.I. Software Team

Projects •Robust trading systems•Global markets prediction•Credit scoring•HFT platforms•Drug discovery•Business analytics•Marketing trends•Image and video mining•Price prediction: insurance


The Idea: To Create Critical Mass of Human Brains Who Will Code A.I. Systems

• In September 2010 we started special course on advanced analytics with a clear business objective:

– To teach best talents to develop A.I. systems for predictive analytics and automatic content generation

So far, 65 mathematicians and programmers completedthe course; many more new researchers will join the Club in 2011

Several new business projects in predictive analytics have already been initiated by course graduates


How the Club Works

• We train Ph.D. students in Predictive Analytics and A.I. and invite best graduates to start real software projects

• Then we show prototypes of intelligent systems to potential strategic partners/investors

• Together with partners we exploit hot business opportunities on world markets


Course Attendees

Master and Ph.D. students majoring in:- mathematics- artificial intelligence- computer science - econometrics- computer linguistics- financial engineering

We invite only best Ph.D. students from five major universities in Minsk


Course Content• A.I. and advanced analytics• Mega-trend: content by A.I.• Machine Learning

- Trees, Kernels- Feature selection- Support Vector Machines - ML application

• Predictive Analytics• A.I. and novelty creation

- Building Blocks- Novelty Propagation- Semantics- Genetic Programming

• Drugs discovery with ML

• Pattern recognition• Data, text, image mining• Ensembles, boosting• Causal time series

– Granger causality– Extended Kalman filter– Sequential Monte Carlo

• Automatic creation of mathematical models– Trading strategies– Credit scoring– Price prediction– High frequency trading


Ongoing Projects• DISFA: automated creation of trading systems for ETFs

and U.S. stocks. Shipping to clients since Q4’2010

• Credit scoring: fast SVM creates credit risk models– Started in Q1’2011. Partner: AAI, U.S., markets - U.S. , China

• A.I. Platform for high frequency trading with Predictive trading strategies. – Started in Q1’2011. Partner: DISFA Global

• Very High Probability Patterns: creation of new generation of trading systems and optimal portfolio models, which have very good steady profit and low draw down .

– Started in Q1’2011. Partner: Advanced Analytics International, U.S.A.


New Projects:Partners are Welcome

• Predictive engines to find causal relations between financial time series for global markets. Launch date March 31’2011

Business model: sell subscription to investment funds Technology: Sequential Monte-Carlo, Causal Reasoning

• Universal Analytics System with fast Support Vector Machine for very large data sets. Very broad market



A.I.Creates NewsNov 23, 2010 New group is formed – to develop A.I. software for automatic creation of Predictive StatArb Trading Systems

Team: Sergey - Stepan - Valery - Artyom

Code name AWALI – Synthesis. Partner: DISFA GlobalCode name AWALI – Synthesis. Partner: DISFA Global


A.I.Creates NewsDecember 16, 2010 New group is formed – to develop A.I. software for finding causal relations between economic and financial time series

Team: Igor-Alexey-Anatoly-Christina


A.I.Creates NewsMarch 31, 2011 New group is formed – Very High Probability Patterns, to reach very high probability of winning trades and very low draw down

Team: Sergey – Margarita - Maxim - Catherine

Rapid R&D Methodology

To minimize new products launch cycle we use a novel method called RRD – Rapid Research and Development – check presentation on the website


http://aicreates.weebly.com/rapid-rd.html

Part 2.Content Revolution

Predictive Analytics and

A.I. for content generation


Internet and Intranets 2011+: Major Shift to Content

• Internet evolution– Phase 1: infrastructure (Sun Microsystems, Cisco), search

engines (Yahoo, Google), e-shops (Amazon, EBay)

– Phase 2: user-generated simple content (Flickr, blogs, social media – Facebook, LinkedIn)

– Phase 3: - A.I. generates content New MEGA TREND


A.I. Creates Content as Mega-trend

• Addresses basic needs: content creation is fundamental feature of human civilization

• Internet is ready: everywhere, high bandwidth, cheap

• A.I. is ready: machine learning, pattern recognition, advanced analytics, semantics

• Huge business opportunities: decisions support; business analytics, robotic trading; data, images and video mining


Ready to explore new opportunities?

Internet 2011+: Content Revolution

Many groups will try to ride mega-trend


Why A.I. for content creation?

A.I. silicon brain• Very fast evolution• Works 24x7x365• Silicon brain capacity

is practically unlimited• No salary increase,

at least for now

Human brain• No change for 20,000 years • Lazy, sleeps, drinks etc.• Brain capacity is limited• Demands salary increase,

bonuses, vacations and respect no matter what

A.I. generates content - Better - Faster - Cheaper


Artificial Intelligence vs. Human Brain

Human brain stopped evolving 20 000 years ago

Artificial Intelligence is entering exponential phase of evolution

A.I.

humans

This is fundamental fact: A.I. evolves exponentially but human brain remainsunchanged since Stone Age


A.I. Beats Human

• Garry Kasparov, the greatest chessplayer of all time, was defeated by Deep Blue computer in 1997

• Same year, Invention Machine Corp. announced A.I. software that created new patentable ideas by linking thousands of physical effects in a second

• No human can generate ideas with such speed


Why is power of A.I. rapidly increasing?

• First, because microprocessors double their performance every 18 month (Moore’s law)

• Second, modern A.I. understands the meaning of words and can learn by reading different information sources

• A.I. is able to run Darwinian-type concept creation and selection with Monte-Carlo method


users

Our Niche: Advanced A.I. for Content Generation

A.I.+ HumanCreativity!


Content Creation by A.I.

Creative Artificial

Intelligence

Creative Artificial

Intelligence

FactsTrendsModelsTheoriesNeedsCommon senseConceptsNews

New content:Risk modelsPredictionsImagesVideosDiscoveriesTrading systemsOptimal Portfolios


Machine Learning: Great Business Opportunities on Modern Internet

Internet: texts images data video

Machine Learning: Text Mining

Machine Learning: Text Mining

Image RecognitionImage Recognition

Predictive AnalyticsPredictive Analytics

Video SearchVideo Search

Internet will be filled with

Machine Learning algorithmsValery Tsourikov 2011 (c). All rights reserved

Q&A

• How are you going to implement the projects?

– We are looking for partners who see great business opportunities in A.I. and Machine Learning spaces

• What kind of partners are you looking for?

– Strategic partners: corporations or investors from the U.S., European Union and Asia

Contact us by email: [email protected] Tsourikov 2011 (c). All rights reserved

mailto:[email protected]

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