Using AI to Trade Less, Move Slower, and Make More Money: The Strategies of One of the World’s Biggest Investors

Norges Bank Investment Management (NBIM), one of the world’s largest investors with over $1.3tn assets under management, is using artificial intelligence (AI) to make its investments more profitable. Unlike most Wall Street firms that are rushing to use AI to trade more quickly and gain an edge, NBIM is using AI to trade more slowly and thoughtfully instead. The innovative AI tool evaluates each stock for its short-term potential, based on factors such as valuation, margins, revenue, trading volume, and volatility, and assigns a score. The best stocks to buy are marked in green, while the worst are marked in red. Because NBIM is committed to buying a bit of everything, it also buys the red-marked stocks, but after it has prioritized the green-marked ones. As a result, the investment giant has generated meaningful profit and reduced buying costs considerably. Furthermore, the AI tool allows NBIM to purchase stocks in a way that does not affect the market’s prices too much. In a video, Jon Egil Strand, a portfolio manager in Equity Trading and Transition, said that many funds and hedge funds use AI to speed up, but the firm uses it to slow down instead. Its goal is to play our own game, where we start with our needs, our characteristics, what makes sense for us.