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At Optiver, the shift from reducing latency to building better AI models is complete: 'latency is the floor' and AI information models have become the key differentiator, with the company now investing substantially more in building better models than in lowering latencies.
Optiver describes how trading has evolved from winning on pure latency to competing on AI models. Slow models with fast triggers send signals while fast edge models make realtime decisions, and the company now invests more in model building than latency reduction. ✦ AI generated
The Pragmatic Engineer · The Pragmatic Engineer · 2026-08-11 · original ↗
Today, latency is the floor, and AI models are becoming a differentiator. Gone are the days of having lower latency than the competition allowing for arbitrage opportunities to make risk-free profits. Instead, information models are becoming a differentiator: slow models with a fast trigger sending signals to execute trades, and fast models running at the edge of the network making trade decisions realtime.
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- ·latency is the floor, AI models becoming a differentiator
- ·old arbitrage edge from lower latency is gone
- ·information models are the new differentiator
- ·no risk-free latency-based profits
- ·slow models + fast trigger send signals to execute
- ·fast models run at network edge, decide realtime
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In practice · 2
There is a moment right now to sell big software platforms again because AI represents a fundamental rethinking of workflows, not just a skeuomorphic replacement of existing cloud tools.Joe Schmidt · a16z Podcast · conf 85%Emerging markets have become essentially an AI play, with Taiwan and South Korea now comprising 45-46% of the index and technology making up 41%, yet they trade at a record 50% discount to the S&P 500.Michael Batnick · The Compound · conf 70%