Key Takeaways:
Trading platform Robinhood is acquiring artificial intelligence (AI) research service Pluto Capital.
As Bloomberg News reported Monday (July 1), the purchase is designed to offer Robinhood’s users more tailored investment strategies and analysis with the help of Pluto’s AI-driven personalized advice and real-time analytics.
“They have built an impressive platform that is highly regarded in the financial services industry,” Mayank Agarwal, Robinhood’s vice president of engineering, told Bloomberg. “Their expertise in artificial intelligence coupled with a mission-aligned passion to democratize finance will complement our team’s effort to bring AI-powered tools to our customers.”
Strategic Expansion
In recent years, Robinhood has begun offering new services such as cryptocurrency trading, retirement products, and credit cards. Despite this expansion, it has remained focused on average retail investors.
With the Pluto acquisition, the company can now analyze updated market information and a consumer’s own portfolio to provide investment recommendations.
It’s a type of individualized advice typically only wealthier investors have access to, and Pluto Capital founder and CEO Jacob Sansbury told Bloomberg he’s wanted to change that.
“There will be no thresholds or no gates,” he said in an interview. “It’s very important for us to give access very democratically to everyone.”
AI Censorship Concerns
Coinciding with Robinhood’s acquisition, Cardano founder Charles Hoskinson has raised alarms over the implications of AI censorship. Hoskinson’s concerns highlight the potential risks of centralized control over AI algorithms, which can lead to biased or censored information.
The Cardano founder emphasized that AI models undergoing “alignment” training might result in certain knowledge being forbidden based on the perspectives of a select, unaccountable group.
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His research team backs these concerns, suggesting that decentralization of language models (LLMs) could be a potential solution, although current decentralized storage solutions limit widespread adoption.
The acquisition of Pluto comes weeks after Robinhood announced it was acquiring the cryptocurrency exchange Bitstamp for $200 million.
“Acquiring a global exchange will significantly accelerate Robinhood Crypto’s expansion worldwide,” the company said in a news release on June 6.
This purchase marks Robinhood’s first institutional business, providing access to Bitstamp’s institutional offerings, such as white-label solutions, institutional lending, and staking.
As the acquisition of Pluto by Robinhood propels AI-driven capabilities within the retail investment sphere, the concerns raised by Cardano’s Hoskinson and the proposed hybrid model solution underscore the importance of transparency and democratization in AI technologies.
This strategic move enhances Robinhood’s offerings and aligns with its mission to democratize access to sophisticated financial tools.
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