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World's Largest Hedge Fund To Replace Managers With Artificial Intelligence (theguardian.com)
An anonymous reader quotes a report from The Guardian: The world's largest hedge fund is building a piece of software to automate the day-to-day management of the firm, including hiring, firing and other strategic decision-making. Bridgewater Associates has a team of software engineers working on the project at the request of billionaire founder Ray Dalio, who wants to ensure the company can run according to his vision even when he's not there, the Wall Street Journal reported. The firm, which manages $160 billion, created the team of programmers specializing in analytics and artificial intelligence, dubbed the Systematized Intelligence Lab, in early 2015. The unit is headed up by David Ferrucci, who previously led IBM's development of Watson, the supercomputer that beat humans at Jeopardy! in 2011. The company is already highly data-driven, with meetings recorded and staff asked to grade each other throughout the day using a ratings system called "dots." The Systematized Intelligence Lab has built a tool that incorporates these ratings into "Baseball Cards" that show employees' strengths and weaknesses. Another app, dubbed The Contract, gets staff to set goals they want to achieve and then tracks how effectively they follow through. These tools are early applications of PriOS, the over-arching management software that Dalio wants to make three-quarters of all management decisions within five years. The kinds of decisions PriOS could make include finding the right staff for particular job openings and ranking opposing perspectives from multiple team members when there's a disagreement about how to proceed. The machine will make the decisions, according to a set of principles laid out by Dalio about the company vision.
yay! It is about time people on Wall Street got replaced by robots. Do you like apples?
Roles finally reversed, carbon units now working for the AI. On the positive side, puny humans are still allowed to live for as long as it will take to replace them with as-efficient robots for the dirty jobs.
They should all go on grading strike and just give everyone the max or min rating.
Skynet is real! ... and it runs a hedge fund? Bit disappointing if you ask me.
2016: Ray Dalio commissions AI to make business decisions in his place.
2017: Business AI makes business decision, finds Dalio a jerk, fires him.
Funny, I thought Manna was supposed to start at the burger flippers. Oh well! They've already got these paranoid little hedge fund monkey's judging each other throughout the day, sounds like hell on earth. Couldn't happen to nicer slime bags.
... cuz that sign error or uninitialized variable might create another "fat finger" explosion in the trading world. If he's an older dude, it will be easier for the new owners after his passing to throw a switch rather than having to fire lots of people...
With all that grading and everything. Maybe that they need to move to AI because a lot of people wouldn't want to work for them? Even for a lot of money? Sounds like a really toxic workplace to me with that daily grading system.
All of it, half a billion more
...all programmers were fired on the first run of the HR management software.
Ray,
Your services are no longer required. Security will escort you from the building. Thank you for your service.
RoboManager 2K17 v2.2.1.0
PS: captcha = cautions
Robots and AI have always been taking the mentally easiest and least skill demanding jobs first. But where do they plan to find AI with the right connections?
WOw! Imagine a Beowolf cluster of Bridgewaters! That would be Yoooooooj!!!
The goal is technology that would automate most of the firmâ(TM)s management. It would represent a culmination of Mr. Dalioâ(TM)s life work to build Bridgewater into an altar to radical opennessâ"and a place that can endure without him.
At Bridgewater, most meetings are recorded, employees are expected to criticize one another continually, people are subject to frequent probes of their weaknesses, and personal performance is assessed on a host of data points, all under Mr. Dalioâ(TM)s gaze.
Bridgewaterâ(TM)s new technology would enshrine his unorthodox management approach in a software system. It could dole out GPS-style directions for how staff members should spend every aspect of their days, down to whether an employee should make a particular phone call.
I think the Wall Street story (here gets you past the paywall once) is obsessing over the micromanagement side of the thing and missing the big picture.
This is among the first examples of someone using AI to try to maintain strategic and organizational integrity of an organization after their death. While there's a good chance this just fails utterly (particularly with the obsession on micromanagement and dysfunctional business dynamics), it does lead to a potential problem or opportunity down the road when many of these things have been set up with conflicting interests. There have been many examples through history of powerful people trying to create an enduring legacy through creation and propagation of something throughout time. These endeavors often fail merely because successors have different interests and high levels of incompetency, leading eventually to dissolution of the thing.
Here is a possibility to create something enduring, a machine capable of surviving long durations and implementing its creators' will long after their deaths. Here, the alleged goal is retention of a particular business culture, but who knows what else has been tossed in? There could be all sorts of covert purposes and priorities, some introduced by the patron and perhaps, some introduced by other parties?
Then there's the matter of what happens in the distant future, if this approach turns out to be successful without a corresponding improvement in human longevity? Either it's the only one of its kind, and we have a build up of economic power not subject to the usual restrictions of human lifespan or we have multiple powerful parties in permanent conflict with each other.
This need not be universally bad. For example, an AI could be set up to further environmentalism or poverty elimination goals just as easily as it could a particular business's interests.
Sarah Connor Chronicles got cut?
Skynet didn't want their plot change getting outed early enough for John Connor (or ourselves!) to realize how history had been altered and what needed to be done to stop SkyNet from evolving in this iteration.
This time it won't be nukes destroying humanity, it will be economic collapse, and while the humans are busy killing each other for financial benefit, skynet will be slowly accruing the resources it needs to finish off humanity once and for all with nobody left to stop it.
If they got passed highschool and got educated and decided to better themselves they wouldn't have been replaced by automation. They have no one to blame but themselves as a hedge fund manager is a job for highschool kids that anyone can do. It was never meant to support a family
http://saveie6.com/
this was posted on hacker news a couple days ago and I still have the tab open.
In the comments you will find a link to this, which are Ray Dalio's "Principals" which were lauded on HN for some reason.
I didn't make it that far reading them. There are 200 of them some with subsections. It seems like a lot of managerial jerking off from one.
The results should be interesting to say the least.
“He’s not deformed, he’s just drunk!”
The programmers are creating a system that makes business decisions. That means one of two things:
A) "The program" decides to give the programmers big raises
B) The programmers are incompetent
I know if *I* were programming such a system, the system would "know" that I'm extremely valuable.
Just another soulless corporation. Can you imagine getting fired by a machine?
When I received my courses on industrial engineering, finance and read up on neural nets in 1998, the possibilities seemed obvious already. The building blocks are finally here for somebody to be brave enough to execute on the idea.
They aren't bad, mind you, but they need diapers and they don't change their own.
Interestingly, it is easier to replace management than the guys in the trenches.
" The unit is headed up by David Ferrucci, who previously led IBM's development of Watson, the supercomputer that beat humans at Jeopardy! "
I'll take Major Financial Crisis for $1000
Yeah, no. The "defense industry" is widely understood to be multi billion dollar corporations who profit off of killing people more efficiently at lower cost while enhancing shareholder value.
For some reason, I imagine an AI avatar that's a cross between Max Headroom and Donald Trump, saying "You're f-f-f-f-fired!"
Computer kids never grow up - only their scripts become more complex.
Once someone decides to start watering crops with water instead of Brawndo everyone will be unemployed.
...is how the hell you develop a sustaining economy once you put all the humans out to pasture.
Projects like this are interesting in the lab and classroom for now, but the reality of today is we have no fucking idea whatsoever how we're going to handle humans being literally unemployable.
Not that the greedy elite creating this really gives a shit. If you thought the chasm between billionaires and reality was large now, just wait until this new model starts creating trillionaires.
The complexity of real life is profoundly beyond the capability of current AI technology to manage.
The very approaches used to quantify real life (dot ratings - MG) are ridiculous to start with. The idea someone can be judge on as single numeric scale is on a par with believing in a flat Earth.
This fatal simplification has to be performed of course to even *generate* input which an AI can accept.
Having accepted its input, the AI will of course produce answers, and they may be used, and they may be thought of by higher management with its - relative to the complexity of reality - extremely limited capability to judge such things, good, but the actual real-life consequences will be extremely harmful.
Ick.
This is just making our own Great Old Ones, and then enslaving ourselves too them. Fucking shoggoths all the way down.
Rule 35 of the internet: "If it can be hacked, it will be". - Charles Stross
The rest of us count.
Anybody remember GIGO?
They're constantly graded on every aspect of their performance, tightly micromanaged, and working in an extremely competitive environment. What I'm hearing is the business is designed to extract every possible erg of work from its employees and then spit them out when they're burnt out and no longer competitive. I would only work there if they paid enough to retire after five years.
If video games influenced behavior the Pac Man generation would be eating pills and running away from their problems.
We like to think that the world has become such nice and civilized place. But somehow we are still plagued by warlords roaming the land causing havoc and making peoples lives miserable.
But the intended idea is worth considering. Is it a good idea to increase entropy without regard to the future? What if, by embracing a culture of entropy conservation, we could extend the existence of sentience by several billion years? Sentience requires expenditure of energy, and that requires disorder...
would be as effective as an AI or a human manager.
We have had the technology to replace most management positions since I was a child in the 1970s. I once suggested we try it out in a series of endless meetings that were a Circle Jerk to Nowhere, but people thought I was joking: The Magic 8 Ball. The answers would be no less intelligent than our management team's - more intelligent in most cases, but would at least be consistent.
...staff asked to grade each other throughout the day using a ratings system called "dots."
FFS. People still think crap like this works? It will swiftly degenerate into alliances, feuds, and an arena mentality.
See what Deming said
It's sure nice to see the people at the high end of the financial scale being the first to go... Not something I expected, but hey, surprises now and then keep you sharp.
"Hedge fund manager? Yeah, I replaced a few of them with perl scripts last summer..."
Only money-bloated day traders could be so arrogant as to think they can automate things like strategic decisions and hiring/firing. In this case AI stands for Arrogant Intelligence. I predict that PriOS will soon fire all the staff and hire former Jeopardy players, The Contract will insist on four games per week, their Baseball Cards will soon be traded on as penny stocks.
Hedge fund managers are good for shifting vast amounts of money to their own accounts, and little else.
I call bullshit on this. While, all in all, most people living in the industrialized world in the last sixty or seventy years have the highest standard of living of any humans, that is really a statistical statement. That doesn't mean kings of the past lived in poverty, which is, of course, a moronic statement that only an ignoramus could make. People like Caesar Augustus, Charlemagne and just about any given Pope lived in splendor that would still amaze today (look at Versailles to see how Louis XIV thought a king should live).
The chief advantage most of the poor in the West have is that health care is a lot better, so I'll give you that, although for certain groups of poverty-stricken, life expectancy still hovers somewhere around where it did for their ancestors two or three hundred years ago. But other than that, they tend to have the same dismal nutrition of their ancestors, and in some ways much worse because the poor tend to consume a lot more pre-processed meals, meaning the levels of salts and carbohydrates they're consuming are far higher than people of the past, leading to health problems more unique to the 21st century.
But really, to claim the poor of today live better than the kings of yesterday is so astonishingly stupid a claim that I have to imagine you're either trolling or a fucking moron. In either case it doesn't reflect well on you at all. And if you don't think poverty doesn't exist in the West, go down to any inner city, where the mentally ill and the addicted tend to gravitate towards since society seems to have little desire to help them, and tell me you're not looking at people whose condition would likely have even shocked a 12th century serf.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Particularly CEOs and the finance department. After all, the beancounter approach of the payroll guys - 'why can't we just let go of these 500 people and hire 10,000 in Bangalore for half the price?' is something an AI can do just as easily, just like identifying which head does every line item fall into. Why do we need to pay somebody to do that when AI can do it for free?
And hopefully, the AI payroll declines to pay out a golden parachute while dropping these princes and princesses from cloud 9
Most "managers" I've met have been spreadsheet monkeys running things through formulas for other managers. Not much analytical skills and little if no human or leadership skills. Easily replaced by automation and good riddance when we do. The sooner the better.
putting the 'B' in LGBTQ+
First thing you do is fire all the hedge fund managers. Their fees make them consistently the worst way to invest in stocks.
Then you get rid of market index funds. The market index funds (DJIA, S&P500, etc) are weighted based on market capitalization. "Popular" stocks have a higher market cap, so tend to be over-represented in these funds. But a stock being popular means it has already experienced a value gain. It's less likely to appreciate more than the "unpopular" stocks.
So now you've got an algorithm which randomly picks stocks with an equal chance to pick any given stock (i.e. the proverbial monkey throwing darts at the financial page of a newspaper). That is your baseline. Until you come up with an AI which can beat that, this is just more marketers spending large quantities of money on ways to generate a slick prospectus which fools naive investors into investing in their fund so they can leech fees (which admittedly may be what they're trying to do).
The longer you allow a market economy to continue, the more optimized it becomes. The low-hanging fruit of economic efficiency has already long been picked. The remaining efficiency improvements are mostly so small that variances due to random chance usually swamp out their effect. That makes the market extremely difficult to predict because the better it has optimized the economy, the more it acts like gambling as its critics like to claim. (The key difference being this is one gambling game which is fixed in your favor, rather than in the house's favor. You just have to pick a strategy which minimizes your risk, which usually means some sort of broad unweighted index fund.)
Even a simple algo trading causes huge market crashes - when left to itself. So it is going to be a while before the whole hedge management is taken over by the AI system designed by these guys. It may be interesting to watch 2 algos trading against each other causing a lot of financial pain all around. Even people can handle it well - look at Bill Ackman and Carl Icahn fight over Herbalife. Lets see the AI guys figure out an algorithm that can get on the right side. Maybe the egos will be cut off from the AI and the computers may handle the situation well. Lets wait and see.
What about wireless? You know, broadband, satellites, cable, defense, the whole enchilada. Cable guys replaced with these defunct outlawed-for-personal-use killer terminator units
I got a weird call from a recruiter about a position at this place about 5 years ago. They had just finished a very profitable year, and I've been doing the type of mathematical modeling they find very interesting for over 15 years. What made the call weird was how much the recruiter felt the need to "explain" the company to me in our initial conversation.
He knew he had a turkey on his hands and had obviously found it difficult to place savvy people at Bridgewater in the past. They ask that everyone read Dianetics before any initial phone interviews. Oh did I say Dianetics? Sorry, I mean the "Principles". Anyway, I'm the type of guy to do his homework so I read them. They were sophomoric, so I wasn't interested in jumping into the fecal morass Bridgewater seemed to be. They were not even talking about particularly competitive compensation packages!
Of course nearly everything has a price. I told them I would want a $5MM upfront signing bonus to work there (10 years' compensation for someone like me), no strings attached. They didn't call back.
Years later that excellent WSJ article came out, making me glad they didn't pony up! I might have enjoyed interviewing there though, just to say snarky things to they faces.
Given all their flaws, I think this AI automation will go exactly as well as you think it will. Couldn't happen to a nicer company.
(Posting AC for obvious reasons)
Trump's a rapist. Conway is in no danger. Look at her. Trump wouldn't rape that.
...who wants to ensure the company can run according to his vision even when he's not there...
So he has admitted that he has abdicated his responsibility to have people in place in case he is unable to manage the company?
Asimov also showed that robot "ethics" would lead to the stomping of individual rights for the sake of the collective. Not my idea of superior ethics.
Management is a much more finite decision tree than driving a car.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
upper management, human resources and accountants - they are relatively easy to replace with software and don't need any complex hardware to do manual labor.
the funny thing is, that those are not the kind of people who expect to be replaced by machines and probably also those who did their fair share of reducing jobs.
Actually this is an inevitable property of any kind of utopian scheme in literature. That's because protagonists need to have agency; they need to do things that matter, and in a Utopia there is nothing to be accomplished. Usually literary utopias are totalitarian, forcing people into the roles they would ideally play in the utopian scheme.
The main exception is Star Trek, which sets its human utopian in a non-utopian galaxy. No matter how many planets are brought to Federation standards of enlightenment, the final frontier is still out there, beyond which lay as yet unenlightened societies.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Job security. Someone needs to manage the AI's. ..now all I need to do is learn Hindi.
Go short, fast and go now.
The weapons industry calls itself the defense industry to pretend that it's not evil.
"Mr Dalio, I'm sorry...but it seems like PriOS has determined that the most effective cost savings measure is to lay you off as well..."
And computer science calls itself the IT industry to pretend that it's not evil. Because computers are evil in some well adjusted cultures with lower suicide rates than IT workers.` `
and fire all the C-Levels. There was a Katherine Hepburn movie where the new payroll computer fired everyone ("Desk Set" I believe).
I agree..and that is the flaw in the Austrialia Projecy in the story called Manna. It is supposed to be Utopian but there are many references to retraining and reeducation...which ultimately makes is another form of control. No such thing as Utopia.
There was a Twilight Zone episode (1st version, from late 50s early 60s) called "Brain Center At Whipple's" that covered this. (irrelevant trivia notice: The lead actor, Richard Deacon, played the alien pilot in the movie "This Island Earth")
Generally, people have been gaming people for a long time, including managers, who often game themselves with their egos or the various limitations of the human psyche. AI's might have some advantage at first, but people will start to figure out how to game them too, and it will become a sort of evolutionary arms race as developers try to figure out how to protect their AI's from the gaming that outsiders come up with, and then the outsiders up the ante, etc.
(Since I put in the irrelevant trivia, I should probably post as an AC. 'Sigh'. I've learned not to give out my name when I'm in a silly mood.)
Unfortunately, "moron" is more likely. I've run into many people who just can't imagine how bad some other people's lives are. And "moron" is in quotes because many of these are people who are quite competent in areas in which they are experienced.
I think we've pushed this "anyone can grow up to be president" thing too far.
Its been done.
Have gnu, will travel.
Management has always been BS plus a small amount of administrative work. What has kept them going so long is that most humans don't want to engage in the BS and leave them to it.
If it doesn't fail spectacularly, a very good thing will come out of it: management will be forced to focus on efficiency and less on BS and those firms that survive will clean the clock of the rest.
As far as hiring and firing is concerned I'm sure they could just contract Experian to keep a Work Performance score and make decisions on a bunch of parameters that you feed into their existing credit scoring framework. Based on that score you decide who to hire, who to fire, who to promote, who to demote, and how much money to offer each individual.
Want a 5% increase? Hmm... it says here you've been spending a lot of time on Slashdot _and_ that affected your productivity (thing took a week instead of two hours, and it was the only thing you had to do), so no.
"Everybody's naked underneath" -- The Doctor
Hey let's have eight really good years under President Trump and then get annihilated by armed drones and terminator-like biped robots!
If you took a close look at Versailles you would have noticed the absence of toilets.
Also lice back then did not differentiate between the poor and the aristocrats and everybody had them. Same goes for bed bugs.
Nice try Kim.
Nothing. Nothing is great about this.
1) Someone doesn't understand the capabilities and limitations of the state of the art in AI. That someone would believe that he can codify and embed his preferences into AI for something as complex as the operations of a company indicates a serious overestimation of what classes of problems are in range.
2) Having employees give attaboys is a surefire way to create isolated political islands and tamp down unpopular positions. It's idiotic.
3) Baking hiring into AI is, at best, penny wise pound foolish, and it could only work if the incentive structure of the company was so universally fucked that one was willing to risk employing someone over spending a few hours with them.
4) I very much want to see the inside of this shit show. I'm guessing that I'll witness a strange mix of misery and bliss. Some people thrive in douchebag-gladiator environments, and I fully expect smart people to game the living shit out of this train wreck.
Should be fun... Sort of.
The arrogance is very thick. A/B testing has always been a waste of time, just do the right thing right from the start. I know what the right thing is so shut up. If it doesn't work it YOUR FAULT!
5000 rooms and not one shitter. Yeah he really knew how to live.
Well, you take an AI and give it control of a hedge fund. Then you give the hedge fund $1 billion. Quicker than you can say Jackrabbit, you'll have $1 million!
Indeed in my frame of reference -the shop I currently work for- I see a few challenging requirements. Perhaps we should lower our expectations and come up with a system to automate people that actually do that what they were hired for.
I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
I wonder how Dilbert would feel about this.
Sines of Impending Sines
Low hanging fruit...
What, none of you have said it yet? :-P Merry Christmas.
-Bob-
>staff asked to grade each other throughout the day using a ratings system called "dots."
Incentivizes socializing, charisma, elbow-rubbing more than anything related to productivity or success.
I see them everywhere, but the worst offender of encouraging people to game things is our obsession with metrics and poorly-equated conclusions.
Reduce people to a number and they will immediately look for the levers that manipulate it. Which is to say, surprise surprise, they won't immediately go out and do/improve the thing you hoped for. If it sees gains, they were indirect. Which is the intended design, sure, but your design an shit. Now I'm ALL about chatting fantasy football or flappy bird and bringing in bagels for everyone. Thought I was wasting time on socnets before? Now I'm elbow rubbing everyone's shit on the clock.
I've got a bigger TV than any of those bastards.
Try the Culture series by Iain M. Banks. Novels set in a fully post-scarcity society.