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By Gunjan Banerji 

S&P Global Inc. said it will buy technology startup Kensho Technologies Inc. -- its second investment in the artificial intelligence space this year.

S&P Global will acquire Kensho for about $550 million. The Cambridge, Mass.-based company uses AI to provide data analysis for financial institutions.

Kensho was founded in 2013. Its staff consists of former employees of Google parent Alphabet Inc., Facebook Inc. and Twitter Inc., an S&P Global spokesman said.

The deal is the latest sign of Wall Street embracing AI. Almost one-fifth of banks and financial services companies surveyed by Greenwich Associates have implemented AI technology into their businesses, according to an October report by the research firm. Banks have tapped machine learning for their research, trading, and compliance, the report said.

"Kensho's capabilities are critical for S&P Global to be at the forefront of the technology transformation taking place within the financial markets," said S&P Global Chief Financial Officer Ewout Steenbergen in a press release.

While S&P Global is well known for its credit-ratings business, the New York-based company has in recent years been building its indexing and data divisions. Last month, it completed the acquisition of Panjiva Inc., another machine-learning and analytics company but one that tracks global supply data.

It also invested last year in London-based Algomi, which uses AI in fixed-income trading.

In its fourth-quarter earnings presentation, S&P Global indicated it wants to expand its index division and invest in "alternative data" companies.

Companies, including those outside of the technology industry, have been venturing more into AI. Machine learning, a branch of AI, is the capability of computers to learn things without programming by humans. Machine-learning computers tend to be able to parse vast quantities of data quickly.

S&P Global's stock has jumped more than 12% this year, hitting a record $193.30 a share on Feb. 26. The company's market capitalization has topped $48 billion, FactSet data show.

On Monday, at a conference in Orlando, S&P Global Chief Executive Douglas Peterson emphasized the company's focus on data and analytics.

"About five, six years ago, we repositioned the company," Mr. Peterson said at the conference.

Write to Gunjan Banerji at Gunjan.Banerji@wsj.com

(END) Dow Jones Newswires

March 06, 2018 16:44 ET (21:44 GMT)

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