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AI Adoption and Alternative Data Growth in Finance

In recent developments reported by Neudata, the integration of artificial intelligence within investment firms has seen a remarkable surge, nearly doubling in the past year. This noteworthy increase reflects a broader trend where 89% of data purchasers indicate that their budgets for alternative data are either poised to increase or will remain steady. These insights arise from Neudata's comprehensive report titled The Future of Alternative and Market Data 2025, which draws on over 171 responses from various global hedge funds, asset managers, and data suppliers.

The findings illustrate a transformative shift in the financial sector, as firms reshape their strategies utilizing alternative data, traditional market data, and AI-driven technology. As investment institutions anticipate an era of expansion, spending is both accelerating and adapting, hinting at a stronger demand for diverse dataset categories.

Key Findings from the Report

1. Growing Alternative Data Budgets: Nearly 90% of participating firms expect an increase or stability in spending on alternative data. This growth underscores the essential role that such data plays in contemporary investment research.

2. Stability in Market Data Spending: Although alternative data expenditures are surging, the report indicates that buyers foresee either steady or modest growth in expenditures on market data, which continues to serve as a solid foundation for investment workflows.

3. Acceleration of AI Integration: Two-thirds of the firms acknowledge they are employing AI technologies to enhance operational efficiency. Moreover, a growing number are utilizing AI and machine learning to refine their trading and investment approaches, positioning them advantageously in an increasingly competitive landscape.

4. Challenges for Data Buyers: Despite the positive trends in adoption, companies face ongoing challenges, including negotiating prices, difficulty in converting trial datasets into purchases, and concerns over data quality that can impede further growth.

5. Evolving Demand for Datasets: There’s a marked shift in the demand for specific types of data. Currently, information technology and consumer discretionary data are leading the charge, shaped by ongoing macroeconomic uncertainties and the increasing influence of AI.

Rado Lipuš, Neudata's CEO and founder, remarked on the intricate relationship between alternative and market data and the operational dynamics of investment firms: "Our 2025 report highlights not only the resilience of this sector but also the rapid acceleration of AI adoption across the industry. Our mission is to provide unbiased intelligence to help data buyers and suppliers navigate this swiftly evolving environment."

The Future of Alternative and Market Data 2025 report is an invaluable resource for hedge funds, asset managers, data providers, and financial organizations aiming to grasp the emerging trends surrounding data utilization, budget allocation, and technology adoption.

Neudata stands out as a leading source for global data intelligence, merging expert human scouting with innovative technology to furnish actionable insights applicable to the expanded data ecosystem. As the landscape of finance continues to evolve with AI, investment firms are indeed reaping the rewards of adaptable and forward-thinking strategies that prioritize alternative data and technological advancements for their future growth.

For those interested in further insights, the full report can be downloaded from Neudata's official site.