The power of AI lies in its predictive power. Given enough data, the conventional wisdom goes, a machine learning algorithm can predict just about anything — like what word will appear next in a sentence. Given this potential, it is not surprising that enterprising investment firms have sought to use AI to inform their decision making.
There’s certainly plenty of data that one could use to train an AI-powered due diligence or investment recommendation tool, including sources like LinkedIn, PitchBook, Crunchbase, Owler, and other third-party data marketplaces. With that, AI-driven financial research platforms claim to be able to predict a startup’s ability to attract investment, and there may be some truth to that. A study of hedge fund performance found that AI-powered funds produced higher average monthly returns than their human-powered counterparts over a 15-year period.
https://techcrunch.com/2022/08/07/why-not-all-vcs-are-ready-to-embrace-ai-powered-investment-tools/ Why not all VCs are ready to embrace AI-powered investment tools – TechCrunch