Artificial Intelligence: Micron Technology Uses AI To Earn Higher Interest

The chipmaker’s in-house AI has generated millions of dollars in additional yield.

Micron Technology, Inc. (NASDAQ: MU), a manufacturer of memory chips, uses an AI tool to earn millions of dollars of extra income on its treasury operations that deploy the company’s surplus cash in deposits and investments. (WSJ)

Micron held as much as $7.8 billion in cash and equivalents during the quarter ended June 3, 2021. Its interest earnings during the quarter, including from cash deposits, was $8 million.

The challenges from low yields

Given the low-interest rate regime, the company considered it worthwhile to invest in the development of an AI tool to optimize the hitherto manual investment process. The company deals with as many as 20 banks globally and has parameters that determine the maximum amounts that can be deployed with any institution, or in a particular asset.

The AI algorithm now pinpoints those asset classes or institutions that would earn the highest yield, and does this extremely quickly, considering the complicated matrix of internal guidelines.

Investment options include overnight bank deposits, time deposits, money-market funds, currencies, and investment managers.

“In this low-rate environment, given the amount of cash that we maintain, every basis point counts and translates to millions of dollars,” Greg Routin, Micron’s treasurer, told the WSJ.

The AI tool

David Zinsner, Micron’s CFO, took care to point out the AI tool was not intended to replace jobs, instead, it freed up the team to work in more valuable areas for the company.

The company’s experience with the tool, which launched in the second quarter, has been profitable. It has generated incremental yield income in the low millions of dollars, Micron revealed to the WSJ and has been instrumental in shifting the focus to higher-yielding bank deposits and away from low-yield money-market funds.

According to Routin, “this AI tool has really allowed us to take our optimization to the next level.”

Related Story:  How CrowdSmart’s Predictive AI Improves VC Investments

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
FinTech: India’s PayTM Gets Heat From Proxy Advisory Firm
August 12, 2022     FinTech, News

Proxy advisory firm Institutional Investor Advisory Services India Ltd. (IiAS) has issued a note ahead of PayTM’s (NSE: PAYTM) annual shareholders’ meeting on August 19 calling for the replacement of…
Venture Capital: Lockheed’s Venture Arm To Boost Investment In Space Startups
August 12, 2022     News, Venture Capital

Lockheed Martin (NYSE: LMT) and its venture finance arm Lockheed Martin Ventures plans to boost the latter’s investment outlay from $200 million to $400 million.
Digital Assets: Brazilian Fintech PicPay Launches Crypto Exchange With Paxos

PicPay, the well-known Brazilian payment app, has got its shoe in the crypto door in partnership with Paxos, a leading regulated blockchain infrastructure company. Picpay is opening crypto trading services…
FinTech: Telecom Behemoth BT Adds Barclaycard Payments To Partnership Network For Micro-Businesses
August 12, 2022     FinTech, News

BT (LON: BT.A), the telecom major, announced that Barclaycard Payments had joined its partnership network seeking to help the growth of UK microbusinesses. BT customers with 0-5 employees would get…