Podcast: Ex-Microsoft Apurv Jain on AI, Alternative Data and Nowcasting
Loved this podcast conversation with MacroX start-up founder Apurv (formerly of Microsoft and Bridgewater). You can listen here:
Summary: The guest is the founder and CEO of Macro X, a San Francisco startup. It combines more than 1,000 alternative data pipelines (satellite images, searches, social posts, card spending, corporate filings) into real-time measures of growth, inflation and the labour market. He argues that official data arrives 1 to 3 months late, so real-time measurement gives a lead without needing forecasts. He says LLMs are used only for narrow, contained tasks, and his current read is that US growth is above trend, wage pressure is low, and consumer anxiety is high. He also covers falling survey response rates and funding cuts at statistical agencies, AI risk, advice for graduates, and book recommendations.
Key facts:
- Macro X measures the economy in real time. Its nowcasts reportedly lead official data by about 3 months, and changes in its Citi surprise index forecast surprises two months ahead across 15 countries.
- It uses different models for different data: CNNs for images, BERT and other LLMs for text. Building the infrastructure took 3.5 to 4 years.
- LLMs generate specific features from text and are run several times. They are then averaged with many other data sources, so one error does not distort the result.
- Compared with the Atlanta Fed GDP nowcast, he says Macro X is built for trading and for point-in-time use. The Atlanta Fed tool revises as official data arrives.
- Current read: US growth is above trend, wage pressure and corporate pricing intentions are low, inflation expectations are ticking up slightly, and consumer financial anxiety is high, especially in the bottom third of earners.
- He is concerned that survey response rates are falling and funding is drying up. He cites a conversation with former BLS commissioner Erica McIntarfer, and says variance in the data is rising.
- In 2023 the yield curve and PMI signalled recession, but Macro X's data showed strong worker bargaining power and no recession.
