Click here for original Interview or FAQs from our conversation with Armando Gonzalez.
I. Introduction and Background
Rob Marsh introduces AI Investor, focusing on how AI can help investors generate better returns.
Guest: Armando Gonzalez, founder and CEO of Ravenpack and Bigdata.com.
Theme: Data as the foundation of AI—"Without data, there is no AI."
Shared history: Rob recalls Kensho and prior conversations with Armando on natural language processing as a key AI tool.
Gonzalez notes today’s AI landscape is complex, noisy, and potentially in a hype bubble.
II. Cutting Through the AI Hype
A. Investor Expectations vs. Reality
Misconception: AI as a “magic eight ball.”
Need to focus on process, edge sources, and real competencies.
B. Financial Services Context
AI must prove value through:
Generating alpha.
Reducing risk.
Lowering headcount.
Trials are strict: subscription decisions hinge on demonstrable ROI (5x–10x, not just 1x).
Exponential value required due to high opportunity cost of talent and resources.
III. Data Quality as the Foundation
“No AI without data.”
High-quality, timely, trusted information critical for decision-making.
Poor training data leads to flawed assumptions and costly mistakes.
Example: AI search engine report on crypto market caps produced attractive but factually wrong outputs.
Audit trail and accuracy essential in financial use cases.
IV. Auditability and Source Trust
A. Risk Context
Greater risk is credibility loss, not just financial loss.
AI should preserve and enhance income/job security.
B. Source Evaluation
Ravenpack/Bigdata.com uses a whitelist: evaluate publisher creation, paywalls, subscribers, AP style, biases, etc.
Rank sources (least biased, most read, best covered).
Partner with trusted subscription-based providers.
Ensure compliance for banks/hedge funds.
V. Client Control and Customization
Users can apply their own ranking and filtering.
Support for multiple providers (e.g., earnings calls).
One API with standardized outputs.
Bring-your-own-license supported.
Knowledge graph built over 20 years connects entities, ensuring accurate resolution (e.g., Meta Platforms vs. subsidiaries).
VI. Monetization and Subscription Models
Subscription > per-click models.
Proven economics: one or two good trades justify costs.
Rights and usage compliance critical.
Retrieval-augmented generation prioritized over model fine-tuning.
Educating providers to join ecosystem sustainably.
VII. Compliance as a Core Stakeholder
Compliance can outweigh PM/developer priorities.
High retention rate by delivering quant value.
Sell side entering with Gen AI research copilots.
AI must deliver insights quickly while avoiding hallucinations.
Broader adoption requires balancing compliance and innovation.
VIII. From Excel Skills to Prompting Skills
Past: Excel skills secured jobs.
Present/future: Prompting skills (including AI code prompting) becoming critical.
Ability to use AI tools well defines job competitiveness.
IX. Addressing IP Leakage
Sensitivity tiers:
Crown jewels (emails/IMs) kept internal.
Research reports, CRM data, sanitized prompts safer externally.
Firms send entity-related queries to Bigdata; results return ranked and customizable.
Analysis/decisions remain internal to preserve confidentiality.
X. Deploying Behind the Firewall
Managed services within client VPCs.
Integrate internal data with Bigdata.com sources.
Supports prompts, watchlists, reports internally.
Gold lies in combining open-source, paywall, and internal data.
Process and audit trail become product itself.
Build vs. buy decision depends on compliance/IP vs. broader functionality.
XI. Build vs. Buy in a Rapidly Changing Landscape
Early post–ChatGPT trend: build entire stack.
Now: buy for speed and relevance; build only for compliance/security.
Ravenpack specialized in NLP, proving value without building funds.
Sustainable edge comes from sticking to core specialty.
XII. Lessons from Successful Adopters
Speed of innovation driven outside finance.
Nimble firms adopt faster, gain edge.
Larger firms risk losing ground despite resources.
Time-to-market critical: onboarding new data in days vs. years.
Opportunity cost of slow adoption can exceed direct costs.
XIII. If You Had a Magic Wand
Armando Gonzalez: Wave it at compliance to accelerate adoption.
Compliance improvements would unlock innovation across regulated industries.
Disclaimer: The information contained in this newsletter is intended for educational purposes only and should not be construed as financial advice. Please consult with a qualified financial advisor before making any investment decisions. Additionally, please note that we at AInvestor may or may not have a position in any of the companies mentioned herein. This is not a recommendation to buy or sell any security. The information contained herein is presented in good faith on a best efforts basis