S&P Global Inc. said it would buy technology startup Kensho Technologies Inc. for about $550 million, its second investment in the artificial intelligence sector this year.
The deal is the latest sign of Wall Street embracing AI. Almost one-fifth of banks and financial-services companies surveyed by Greenwich Associates have implemented AI technology into their businesses, according to an October report by the research firm. Banks have tapped machine learning for their research, trading and compliance, the report said.
Kensho, based in Cambridge, Mass., uses AI to provide data analysis for financial institutions.
“Kensho’s capabilities are critical for S&P Global to be at the forefront of the technology transformation taking place within the financial markets,” said S&P Global Chief Financial Officer Ewout Steenbergen.
While S&P Global is known for its credit-ratings business, the New York-based company has in recent years been building its indexing and data divisions. Last month, it completed the acquisition of Panjiva Inc., another machine-learning and analytics company but one that tracks global supply data.
It also invested last year in London-based Algomi, which uses AI in fixed-income trading.
In its fourth-quarter earnings presentation, S&P Global indicated that it wants to expand its index division and invest in alternative data companies.
Companies, including those outside of the technology industry, have been venturing more into AI. Machine learning, a branch of AI, is the capability of computers to learn things without programming by humans. Machine-learning computers tend to be able to parse vast quantities of data quickly.
S&P Global’s stock has jumped more than 12% this year, hitting a record $193.30 a share on Feb. 26. The company’s market capitalization has topped $48 billion, FactSet data show. On Tuesday, S&P Global rose 0.3%, to $190.99.
On Monday, at a conference in Orlando, S&P Global Chief Executive Douglas Peterson emphasized the company’s focus on data and analytics. “About five, six years ago, we repositioned the company around the theme of essential intelligence,” Mr. Peterson said at the conference.
Kensho had raised venture-capital funding from investors including Accel, Devonshire Investors, General Catalyst Partners, Goldman Sachs & Co., GV, In-Q-Tel and New Enterprise Associates.