How Hudson River Trading Actually Uses AI

In this episode of the Odd Lots podcast, hosts Joe Weisenthal and Tracy Alloway interview Iain Dunning, the head of AI at Hudson River Trading, to explore the application of AI in the world of trading. Dunning explains how Hudson River Trading uses AI to make markets, providing liquidity in stocks, futures, options, crypto, and bonds. The discussion covers the evolution from traditional algorithmic trading to AI-driven models, the types of data used, the challenges of interpretability, and the infrastructure requirements for AI in trading. They also discuss the constraints such as electricity and talent, the competitive advantages in the field, and the balance between open-source ideals and proprietary models. The episode concludes with insights into high-speed trading and the role of humans in the process.