Hi, I'm Matt. You’re reading AI Street, where AI meets Wall Street. Every Thursday, I share curated news, analysis, and expert interviews.

The Rundown 

• Financial Services Leading AI Adoption

• AI grabbing a Third of VC dollars

• Stardog: AI in Finance & Rocket Science

• Regulators Without AI-Specific Rules

• Gartner Predicts Merging AI Models

• AI Criminals  🎶 🦹‍♂️

ADOPTION
Financial Services Leading GenAI Race

Financial services firms are emerging as unexpected leaders in AI adoption, according to a recent report by Databricks.

The industry leads in GPU usage, which is primarily associated with large language models, showing an 88% growth over a six-month period, per the report.

The industry's strict regulatory environment may actually be accelerating adoption rather than hindering it, per Databricks.

UBS’s AI Tool Scans 300,000 Firms in 20 Seconds

UBS Group AG has developed an AI tool to assist with M&A deals, capable of analyzing over 300,000 companies in less than half a minute.

The "co-pilot" generates buy-side ideas, identifies potential buyers for the sell-side, and detects potential activist campaign targets by analyzing management presentations.

The bank also sees potential for AI in legal tasks and data-room work related to M&A transactions. (Bloomberg)

AI Disclosures Jump at Banks: Study

Nearly one-third of the world’s largest banks are now publicly sharing details about their AI use cases, per new research from benchmarking platform Evident.

The study found that 70% of global banks are reporting on AI progress through various channels. UK banks Barclays and NatWest have seen a 193% increase in AI mentions over the past year.

Evident's AI Index, monitoring 50 major banks, identified over 1,250 AI references—a 59% increase from the previous year. (CFOtech)

FUNDRAISING
AI Grabbing Almost a Third of VC Dollars

Investments in VC AI startups have climbed to $64 billion so far this year — on track to approach a peak set during a broader investing surge in 2021. The total share of VC investments in AI is the highest on record. (WSJ)

OpenAI Targets $150B Valuation

OpenAI is in talks to raise $6.5 billion from investors at a valuation of $150 billion, per Bloomberg.

The new valuation is significantly higher than the $86 billion valuation from the company’s tender offer earlier this year, cementing its place as one of the most valuable startups in the world. (Bloomberg)

AI Startup Glean Doubles Valuation to $4.6B

Glean Technologies Inc. raised over $260 million, more than doubling its valuation from earlier in the year to $4.6 billion.

Google engineers founded the Palo Alto-based company in 2019 as a search engine for companies, helping employees access internal data. (Bloomberg)

Gen AI Compliance Startup Sedric raises $18M

Sedric Ai, which says revenue has increased fivefold over the last 12 months, is using the Series A funding to expand its compliance-dedicated LLM. (Finextra) 

Sequoia Sees More Value in AI Applications Than Models

VC giant Sequoia believes the bulk of billion-dollar companies created in AI will come from making applications rather than building foundational models like OpenAI. (Bloomberg)

INTERVIEW
Accenture-Backed Stardog: AI in Finance & Rocket Science

AI Street interviewed Matt Lucas, Field CTO for financial services at Stardog, a company using AI and knowledge graphs for data challenges in finance and other industries. Stardog, based in New York City, uses knowledge graph technology, which organizes information to show an interconnected map of data.

Stardog, which is backed by Accenture's investing arm (the consulting firm is also a client), employs generative AI to build these knowledge graphs, aiming to make AI more reliable and efficient, particularly in addressing the issue of AI hallucinations. The company says its own LLM, Voicebox, is fast, accurate, and 100% hallucination-free.

Lucas shares his thoughts on what kind of ROI clients can expect, what's overhyped (General purpose LLMs), underhyped (Small LLMs) and current use cases. Before joining Stardog, Lucas was most recently Executive Director of Technology at Morgan Stanley.

The following interview has been edited for clarity and length.

What is Stardog and how does it address AI hallucinations?

Stardog is a knowledge graph and AI platform provider specializing in using AI to solve complex data challenges across various industries, including finance. We focus on safe, generative AI using knowledge graphs. By structuring data in graph format, we can significantly reduce or eliminate hallucinations, providing more reliable AI solutions.

What are knowledge graphs?

Knowledge graphs are a way of structuring data that emphasizes relationships between different pieces of information. They're important for AI in finance because they help organize sprawling data, make AI adoption more efficient, and improve model accuracy and reliability. As AI in finance evolves, knowledge graphs are becoming a crucial foundation for advanced, trustworthy AI systems.

Read the full interview here.

REGULATION
Regulators Rely on Existing Rules for AI: OECD

While most countries have implemented some form of AI policy, many are without explicit, sector-specific regulations, according to a new OECD study.

• The report analyzed different AI regulatory approaches in 49 OECD and non-OECD jurisdictions.

• Financial stability risks from AI use are not currently considered significant, but most respondents expect such risks to emerge in the future.

Regulators are largely relying on existing frameworks to govern AI use. There's a clear preference — at least currently — for technology-neutral approaches rather than AI-specific rules, per the study.

Also: SIFMA urges tech-neutral approach to AI regulation (Investment Executive)

FORECASTS
AI Seen Merging Text, Image, and Audio Models: Gartner

Gartner predicts that 40% of generative AI solutions will be multimodal — combining text, images, audio, and video — by 2027, up from 1% in 2023.

Also, domain-specific AI models and autonomous agents are highlighted as emerging technologies. These specialized AIs aim to offer improved accuracy, security, and efficiency.

While the GenAI market is entering a "Trough of Disillusionment," analysts suggest that real benefits may emerge as the technology matures over the next few years. (Gartner)

Also: French startup Mistral releases first multimodal model (TechCrunch)

FRAUD
AI Criminals 🎶 🦹‍♂️

I spent about 5+ years writing about financial crime for Bloomberg News, mostly on securities fraud. And at times I’d run into schemes that were so elaborate that the alleged perpetrator had to do an enormous amount of work to actually pull off the scheme. Like their skill set would seemingly earn them a comfortable life, but crime was apparently calling. This is one of those cases: