From Business Insider · Dan DeFrancesco · · 2m
AI's data hunger could revive Wall Street's alternative data boom
AI companies racing to buy workplace data could rescue a once-hot investment sector that struggled to scale.
In brief
AI companies racing to buy workplace data could rescue a once-hot investment sector that struggled to scale. AI companies are acquiring workplace data including Slack messages, memos and contracts to train models, potentially reviving the alternative data sector that boomed on Wall Street in the mid-2010s but…
AI companies want your work data
AI firms are racing to acquire workplace data including Slack messages, internal memos, transaction records, and contracts. They need deep understanding of work to automate it effectively.
“If AI tools are going to automate work, they need a deep understanding of what the work is.”
The data grab is already underway
Business Insider's reporting shows AI companies are pursuing multiple strategies. Some are buying data from existing sources, others are leveraging their own databases, and some are paying people to create new data.
Law firms have valuable archives
Law firms hold detailed archives of contracts and documents that AI companies want. These repositories represent a significant data source for training workplace automation tools.
Robotics companies are creating data
In robotics, companies are paying people to record everyday tasks like cooking and cleaning to generate training data for AI models that will eventually automate these activities.
Alternative data had a Wall Street moment
Alternative data, including satellite imagery and card transactions, became a hot commodity on Wall Street in the mid-2010s. Investors used it to gain trading edges by analyzing real-world signals.
The sector struggled to find buyers
Alternative data providers hoped to sell to big corporations, not just hedge funds. But the market had limits. Too many traders using the same data meant losing competitive advantage.
AI could fill the gap alt-data missed
AI companies need wider, deeper data catalogs than hedge funds seeking real-time market signals. This demand could finally give alternative data providers the corporate buyer base they always wanted.
Success is not guaranteed
Alternative data providers struggled to scale while maintaining quality. AI companies' expectations will be just as demanding. Some money managers may find the most useful data in their own backyard.
The essence
AI companies are acquiring workplace data including Slack messages, memos and contracts to train models, potentially reviving the alternative data sector that boomed on Wall Street in the mid-2010s but struggled to scale.
