S&P Global Makes $550 Million Bet on AI with Kensho Buy
Information giant will pick up Goldman Sachs-backed AI startup for over half a billion dollars.
The information giant is paying that amount in cash and stock to pick up Kensho Technologies, a fintech startup backed by names including Goldman Sachs, which is widely regarded as one of the most promising new breed of technology firms.
Kensho, formed in 2013 by Daniel Nadler, a Harvard PhD graduate, and which counts technology specialists from Google, Apple and others among its ranks, specializes in AI for finance and national security. It is either in use or being trialled at most major banks at present.
With this purchase, S&P Global says its aim is to become a world leader in AI development—and it is the first to admit that this isn’t a transaction that has been fueled by traditional concerns in mergers and acquisitions (M&A), such as strong cash flows and diversified product bases. Instead, what S&P is largely acquiring is talent, knowledge, and the ability to infuse its technology stack with natural-language processing, machine learning and other subsets of AI.
“Unless you cover the technology industry, this is not a routine acquisition,” said Doug Peterson, CEO of S&P Global, speaking on a conference call with analysts on March 7. “We’re buying a startup company with proven talent and technology; we’re not buying a business with meaningful revenue or profitability.”
Indeed, Jones continued, Kensho’s revenues of approximately $20 million mean it is something of a light loss-leader at present, although the company is confident that it can get it to break-even.
“The most meaningful benefit is positioning S&P Global at the forefront of AI and machine learning,” he continued.
Nadler, the founder and CEO of Kensho, will stay on with the company, which he described as his “child” on the call. He added that the firm has been working with S&P Global for some time now—it took a stake in Kensho in early 2017—and that his comfort with the deal stems from the firm’s perspective on innovation.
“We’ve had the good fortune of working with the six largest banks in the world, and I’ve had the fortune of meeting with the CEOs and CFOs of all of them,” said Nadler, on the same call. “And so I can therefore say with a real basis for comparison that, perhaps alongside Marty Chavez of Goldman Sachs, Doug and [S&P Global CFO Ewout Steenbergen] are two of the most open-minded, forward-looking executives on Wall Street with respect to technology. That is everything in this game—the tone from the top, the open-mindedness to innovation—that’s what makes the difference between a large, incumbent firm making progress versus muddling along.”
S&P Global’s acquisition is expected to close late in the first quarter of 2018, or early in the second quarter, subject to customary regulatory approvals.
The move is the latest in a year that has already seen tremendous M&A activity in the fintech space. Since January, the sector has seen a series of major multi-million and -billion deals, including Blackstone’s acquisition of Thomson Reuters Financial and Risk, SS&C Technologies picking up DST Systems, and a bid for UK tech vendor Fidessa by Temenos, as well as Ion’s purchase of Openlink.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
T. Rowe Price’s Tasitsiomi on the pitfalls of data and the allures of AI
The asset manager’s head of AI and investments data science gets candid on the hype around generative AI and data transparency.
As vulnerability patching gets overwhelming, it’s no-code’s time to shine
Waters Wrap: A large US bank is going all in on a no-code provider in an effort to move away from its Java stack. The bank’s CIO tells Anthony they expect more CIOs to follow this dev movement.
J&J debuts AI data contracts management tool
J&J’s new GARD service will use AI to help data pros query data contracts and license agreements.
An AI-first approach to model risk management
Firms must define their AI risk appetite before trying to manage or model it, says Christophe Rougeaux
Waters Wavelength Ep. 297: How to talk to the media
This week, Tony and Wei-Shen discuss the dos and don’ts for sources interacting with the media.
The Waters Cooler: Tidings of comfort and joy
Christmas is almost upon us. Have you been naughty or nice?
FactSet launches conversational AI for increased productivity
FactSet is set to release a generative AI search agent across its platform in early 2025.
Waters Wavelength Ep. 295: Vision57’s Steve Grob
Steve Grob joins the podcast to discuss all things interoperability, AI, and the future of the OMS.