If you thought Steve Cohen's most notable accomplishments were his insider trading antics and the New York Mets' dismal performance, hold onto your trading apps. The hedge fund wizard is back with a grand plan to raise $1 billion to plunge into the world of artificial intelligence. Yes, the same Steve Cohen who once turned Wall Street into his personal casino and the Mets into a spectacular dumpster fire, is now setting his sights on AI.

Cohen Dives into AI Arena

Steve Cohen, the mastermind behind Point72 Asset Management, is gearing up to launch a new hedge fund laser-focused on AI. Like many big players on Wall Street, Cohen has been gushing about AI, calling it "transformational" and comparing it to the tech boom of the '90s. Let’s just hope he doesn’t jinx it.

(Source: Fortune)

The Fund’s Strategy

So, what's Cohen's game plan here? Point72 aims to place bets on (and against) AI hardware and semiconductor companies. They’re essentially trying to pick the future tech stars and the inevitable flops. Eric Sanchez, Point72’s San Francisco-based portfolio manager, will spearhead this AI venture, set to launch either later this year or early 2025. The goal is to raise a billion dollars, with Cohen and his employees also tossing in their own money.

I can picture Cohen in his office, standing in front of his $140 million Picasso, "Le Rêve," musing over whether AI can predict the next great artist, or maybe just the next insider trading tip. His office might be the only place where you can find a $91 million Jeff Koons sculpture next to someone who dodged $1.8 billion in insider trading penalties.

Cohen's AI Obsession

Cohen is adamant that AI will create "big winners and losers," a phrase that might as well describe his tenure with the Mets. "It sort of reminds me of the '90s where the best new companies came out of that period," he told CNBC. We get it, Steve. You’re hoping AI is your next Amazon, not your next Pets.com.

Point72, with its $33.9 billion in assets, isn't new to the tech rodeo. They’ve already dipped their toes in the AI pool with ventures like Hyperscale, their private equity fund aimed at modernizing companies using AI.

Luckiest Man on Wall Street

Before Cohen turned his attention to AI and baseball, he was the kingpin of Wall Street’s murky waters. His former hedge fund, SAC Capital, was a titan until it pleaded guilty to insider trading in 2013, coughing up $1.8 billion in penalties. Cohen himself dodged criminal charges, pulling off the financial equivalent of a Houdini escape. Despite being the heartbeat of SAC Capital, Cohen managed to slip through the legal cracks, continuing to run a private fund with $11 billion in assets. Talk about nine lives.

(Source: PBS)

Cohen’s escapades included a network of traders producing "edge," some of it legally dubious. One of his right-hand men, Mathew Martoma, ended up in jail for insider trading involving an Alzheimer’s drug. Cohen? He walked away clean, thanks to a system that shielded him better than a moat around a medieval castle. This knack for dodging trouble is as much a part of his legacy as his financial acumen. And let's not forget his rumored cozy chats with Nancy Pelosi about the latest market moves—talk about insider info!

The Mets: A Comedy of Errors

Speaking of dodging trouble, Cohen's tenure with the Mets has been nothing short of a tragicomedy. He bought the team in 2020 for a whopping $2.4 billion, the highest sale price for an MLB team. Yet, despite a payroll that would make even the Yankees envious, the Mets finished fourth in the NL East last season, missing the playoffs. Cohen admitted to losing money on the Mets, despite splurging $445 million in 2023 alone, with a record payroll of $319.5 million and an eye-watering $100.8 million in luxury taxes. It’s like he tried to buy a trophy and ended up with a participation ribbon.
(Source: USA Today)

He’s All In

So what should we take from this story? Cohen's pivot to AI isn't just about catching the next tech wave; it's about redemption. He sees AI not as a bubble but as a durable investment theme. He's banking on AI to save companies millions by boosting productivity. In fact, Point72 has already used large language models like ChatGPT to save $25 million. Maybe Cohen should consider using AI to draft better baseball players, too.

In the end, Steve Cohen’s latest venture into AI is a high-stakes gamble that could either cement his legacy as one of the most successful billionaire investors in Wall Street history or add another chapter to his saga of high-profile flops. Will Cohen’s billion-dollar AI fund be the home run he’s hoping for, or will it be a swing and miss? Only time will tell. But one thing’s for sure: with Cohen at the helm, it’s going to be an entertaining spectacle.

Stocks.News has a position in Amazon.