Apoorva Mehta, who co-founded Instacart, has set up a hedge fund designed to run much of its investing through AI rather than traditional portfolio managers, Bloomberg reported.
The firm, Abundance, is based in Palo Alto, California. It was started last year.
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Abundance has a small team of quantitative researchers, engineers and AI specialists focused on building and maintaining its models.
Mehta told Bloomberg that the fund deploys thousands of automated agents. These systems trawl information sources, propose trade ideas, carry out research, choose positions, set position sizes and place trades.
Many hedge funds already use AI tools to support human decision-making. Abundance’s longer-term aim is to move towards AI systems managing investment decisions across the portfolio on their own.
Some of the firm’s stock-selection strategies are already fully automated, Mehta said.
Other strategies being developed will still include some human input for the time being.
Mehta argued that people have natural limits compared with AI. People “can only track so many opportunities at once, process them only so deeply, make only so many high-quality decisions,” he said.
“Even for the exceptional investor, the process is locked inside their mind. AI changes that entirely.”
The fund currently mainly trades its own capital and has a team of about ten people. It plans to accept external money later.
Abundance has raised $100m in seed equity financing, according to Bloomberg. It takes long and short equity positions and plans to expand into other asset classes.
Mehta co-founded Instacart in 2012 and exited roughly a decade later after the grocery delivery company’s initial public offering.
A filing shows that, as of 30 June, Mehta continued to hold nearly 8.4% of Instacart.
