Palo Alto, California – Instacart co-founder Apoorva Mehta has launched Abundance, a new hedge fund aiming to operate entirely through artificial intelligence agents, backed by $100 million in seed funding. The announcement, reported by Hema Parmar of Bloomberg, signals a significant step towards fully automated investment management within the financial sector.
Abundance differentiates itself by intending to replace traditional human portfolio managers with AI, a model that few firms currently employ. "Instacart co-founder Apoorva Mehta launched a hedge fund that relies on an army of artificial intelligence agents, one of the few using that technology to essentially replace fundamental portfolio managers," according to the Bloomberg report. The firm utilizes thousands of bots to scout for trade ideas, conduct in-depth research, select stocks for both long and short positions, determine bet sizes, and execute trades.
Mehta, 39, established Abundance last year with a lean team of 10 quantitative researchers, engineers, and AI experts dedicated to building and maintaining the AI models. He expressed his belief that human investors face inherent limitations, stating, "People 'can only track so many opportunities at once, process them only so deeply, make only so many high-quality decisions.' Even for the exceptional investor, the process is locked inside their mind. AI changes that entirely." The inspiration for this venture reportedly came after OpenAI released its "o3 model," which showcased advanced reasoning capabilities.
While many hedge funds incorporate AI to support human traders, Abundance's ultimate goal is full AI autonomy. The firm currently employs AI-driven stock-picking strategies, with some strategies in development still involving a degree of human oversight. Abundance is presently trading its own capital but plans to open to outside investors in the future and expand into other asset classes beyond its current focus on long and short stock bets.
The launch comes amidst varying opinions on AI's impact on finance, with Citadel founder Ken Griffin recently expressing skepticism that generative AI is significantly helping hedge funds outperform the market. Despite this, Mehta claims Abundance's returns have already surpassed multiple indexes, though specific benchmarks were not disclosed. This move by a prominent tech entrepreneur into the financial world underscores a growing trend of leveraging advanced AI to redefine traditional investment strategies.
