A director of engineering at Intel, a vice president at Fidelity Investments, and an investment portfolio manager for Apple walk into a business school class…and walk out with an idea for an ETF managed entirely by AI.

In 2017, Chida Khatua, Art Amador, and Chris Natividad debuted AIEQ, billed as the “world’s first” equity ETF fully managed by AI.

By the numbers: It started with a team of about 10—themselves, along with seven developers in India. That first year, the fund managed $60—$70 million in assets.

• Since then, the company has tripled the team, and the fund now uses 80,000 models to analyze approximately 6,000 US companies.
• It manages about $150 million in assets, a small slice of the ~$5.2 trillion managed across the 1,596 ETFs in the US.

In the years since AIEQ’s debut, it first underperformed against the US market, then matched its performance, and finally surpassed it in 2020, when it beat the S&P 500 by at least seven percentage points.

But AIEQ has also hit some snags: Tech and health care bets temporarily derailed performance in Q2 2021, and the recent tech sell-off contributed to the fund dropping 12% year to date. It’s up 42% since its inception, though the S&P is up about 70% over the same span.

How it works

AIEQ is run by EquBot, the co-founders’ AI investment platform and portfolios-as-a-service (PaaS) company. The ETF uses EquBot’s tens of thousands of proprietary models, and each day, the platform focuses on pulling data points related to the 6,000 US companies it tracks. Since 80,000 AI models is far too many for humans to manage, the company leans on IBM Watson to monitor them.

• AIEQ learns from structured data, the traditional kind that’s always been used in the finance world, like revenue, growth, R&D expenditure, and market movements.
• But it also gets insights from unstructured data, like news articles, blogs, corporate innovation announcements, and social media.

The models have been trained on historical data ranging from five to 30 years, weighing recent data more heavily.

Big picture…“We have seen investors become more and more comfortable with quantitative, algorithmic funds over time, and AI-run funds seem like a likely next step in the evolution of asset management,” Daniel Weagley, assistant professor at the Georgia Institute of Technology, told us via email. “In the longer run, I don’t expect the average AI-run fund to outperform index funds, especially as more funds enter the market and compete away any alpha that the AI-models identify.”

Click here to read the full story.—HF

Cell-cultured meat products may not yet be for sale yet in the US, but the companies that make lab-grown meats are.

Upside Food, one of the largest US–based cultivated-meat companies, just bought Cultured Decadence, a startup focused on cell-cultured crustaceans. The deal terms were undisclosed, but Cultured Decadence raised a $1.6 million pre-seed round in April 2021.

So far, lab-grown meat has only received regulatory approval for commercial sale in Singapore, but several companies are working hard to perfect products—and production processes—so they can be first to market when, or if, more regulators give the green light.

• McKinsey predicts lab-grown meat will be a $25 billion industry by 2030, and make up about 0.5% of the world’s meat supply.
• Investors have put almost $2.5 billion into the space over the last two years, per Crunchbase data—for context, VCs spent $978 billion over that same time period.

Lab-grown langoustines?

Cultured Decadence was founded in 2020 and has said it plans to have a prototype ready in 2022. Upside intends to use the company’s cell-culture and tissue-engineering tech to fuel its seafood efforts, which have been less of an emphasis for the company so far.

How it works: Using lobster as an example, first Cultured Decadence takes small tissue samples from wild lobsters, then it isolates individual lobster cells from the sample, which are used to grow lobster meat in cell-culturing media. Et voilà, you have a lump of lobster meat.

Last November, Upside used cash from a $186 million funding round raised in 2020 to open a 53,000-square-foot production facility in Emeryville, California. The company claims the facility can currently produce over 50,000 pounds of meat a year, and scale up to 400,000 pounds per year over time.

• That’s a lot of production capacity compared to most other cultivated-meat companies, which are generally still focused on R&D, but a little compared to traditional meat production.
• Americans eat ~27.5 billion pounds of beef alone every year.

Zoom out: There are a number of companies playing in the lab-grown seafood space, including Wildtype, a US–based startup that says it opened the world’s first cultured seafood production plant last June. Wildtype claims the facility can produce ~50,000 pounds of cell-cultured fish per year, and scale up to 200,000 in the coming years.

Click here to view on-site.—DM

Meta kicked off this week with a big announcement: It’s building an AI supercomputer—poised to become the world’s fastest of its kind, Meta claims.

Right now…The system’s processing power is on par with the world’s fifth-fastest supercomputer, but by July, Meta plans to increase its GPUs from 6,080 to 16,000.

Dubbed the AI Research SuperCluster (“RSC,” for short), the new system is powered in part by thousands of Nvidia’s high-performance GPUs. Meta engineers started work in 2020, designing the system’s cooling, power, cabling, and networking systems from the ground up.

What it’s built for

Meta (Facebook at the time) began prioritizing AI years ago, starting with a dedicated AI research lab in 2013. The company’s metaverse focus goes hand in hand with its new project, since RSC has been designed for a slew of future-focused tasks.

• Think: possibly augmenting content moderation on all of Meta’s platforms, introducing new augmented reality experiences, improving speech recognition amid background noise, expanding the ability to process languages and accents, and more.

Meta isn’t the only company leaning into AI supercomputers. Nvidia and Microsoft have built their own, though Microsoft’s, in partnership with OpenAI, has 10,000 GPUs compared to Meta’s planned 16,000.

Looking ahead: As tech giants build more powerful supercomputers, we’ll likely see them build larger language models—and build them more quickly. Meta has started to train RSC to train large language models 3x faster, finishing training in three weeks instead of nine. Expect to see the hot-button debate over the ethics of large language models heat up in the AI space and beyond.

Click here to read the full story.—HF

Stat: The James Webb telescope settled into its permanent home on Monday, 1.5 million kilometers away—or 4x the distance between Earth and the moon.

Quote: “Technology is still an important part of it. It’s one of the ways to improve, but it’s not the sole thing, and we have to use it sustainably,” Debra Lam, former managing director of Georgia Tech’s Smart Cities and Inclusive Innovation team, on the future of smart cities

Read: Changing laws that protect auto dealers could be key to fueling EV uptake in the US.

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Last week, the Federal Reserve released a report exploring a potential digital dollar. How well do you understand central bank digital currencies?

Click here to take the quiz.

Anyone who is anyone may be resigning from their job, but for those of us sticking in our seats, money matters.

So, let’s dig into tech-worker salaries in 2021. Job-search platform Hired released a report detailing how much $$$ tech employees made last year—here’s a quick rundown.

By role: In the US, engineering managers commanded the highest salary of positions surveyed (north of $175,000), while quality assurance and data analytics were on the lower end (~$125,000). Of all roles surveyed, data analytics saw the biggest drop-off in average salary between 2020 and 2021.

By region: In the US last year, the average annual tech salary was $152,000, down 1% from 2020. The global average was $138,000 in 2021, up 6% from the prior year. The Bay Area, Seattle, and NYC are the regions with the highest tech salaries in the US.

Catch up on the top Emerging Tech Brew stories from the past few editions:

• Ready to electrify your vehicle fleet? EV fleet tech providers want to help
• Experts say 2022 is the year smart city projects move from flashy to functional
• One of the fastest forms of 5G is disrupted by trees