A military artificial intelligence arms race is a technological, economic, and military competition between two or more states to develop and deploy advanced AI technologies and lethal autonomous weapons systems (LAWS). The goal is to gain a strategic or tactical advantage over rivals, similar to previous arms races involving nuclear or conventional military technologies. Since the mid-2010s, many analysts have noted the emergence of such an arms race between superpowers for better AI technology and military AI, driven by increasing geopolitical and military tensions. An AI arms race is sometimes placed in the context of an AI Cold War between the United States and China. Several influential figures and publications have emphasized that whoever develops artificial general intelligence (AGI) first could dominate global affairs in the 21st century. Russian President Vladimir Putin stated that the leader in AI will "rule the world." Researchers and experts, such as Leopold Aschenbrenner and Adrian Pecotic respectively, warn that the AGI race between major powers like the U.S. and China could reshape geopolitical power. This includes AI for surveillance, autonomous weapons, decision-making systems, cyber operations, and more. == Terminology == Lethal autonomous weapons systems use artificial intelligence to identify and kill human targets without human intervention. LAWS have colloquially been called "slaughterbots" or "killer robots". Broadly, any competition for superior AI is sometimes framed as an "arms race". Advantages in military AI overlap with advantages in other sectors, as countries pursue both economic and military advantages, as per previous arms races throughout history. == History == In 2014, AI specialist Steve Omohundro warned that "An autonomous weapons arms race is already taking place". According to Siemens, worldwide military spending on robotics was US$5.1 billion in 2010 and US$7.5 billion in 2015. China became a top player in artificial intelligence research in the 2010s. According to the Financial Times, in 2016, for the first time, China published more AI research papers than the entire European Union. When restricted to number of AI papers in the top 5% of cited papers, China overtook the United States in 2016 but lagged behind the European Union. 23% of the researchers presenting at the 2017 American Association for the Advancement of Artificial Intelligence (AAAI) conference were Chinese. Eric Schmidt, the former chairman and chief executive officer of Alphabet, has predicted China will be the leading country in AI by 2025. == Risks == One risk concerns the AI race itself, whether or not the race is won by any one group. There are strong incentives for development teams to cut corners with regard to the safety of the system, increasing the risk of critical failures and unintended consequences. This is in part due to the perceived advantage of being the first to develop advanced AI technology. One team appearing to be on the brink of a breakthrough can encourage other teams to take shortcuts, ignore precautions and deploy a system that is less ready. Some argue that using "race" terminology at all in this context can exacerbate this effect. Another potential danger of an AI arms race is the possibility of losing control of the AI systems; the risk is compounded in the case of a race to artificial general intelligence, which may present an existential risk. In 2023, a United States Air Force official reportedly said that during a computer test, a simulated AI drone killed the human character operating it. The USAF later said the official had misspoken and that it never conducted such simulations. A third risk of an AI arms race is whether or not the race is actually won by one group. The concern is regarding the consolidation of power and technological advantage in the hands of one group. A US government report argued that "AI-enabled capabilities could be used to threaten critical infrastructure, amplify disinformation campaigns, and wage war":1, and that "global stability and nuclear deterrence could be undermined".:11 == By nation == === United States === In 2014, former Secretary of Defense Chuck Hagel posited the "Third Offset Strategy" that rapid advances in artificial intelligence will define the next generation of warfare. According to data science and analytics firm Govini, the U.S. Department of Defense (DoD) increased investment in artificial intelligence, big data and cloud computing from $5.6 billion in 2011 to $7.4 billion in 2016. However, the civilian NSF budget for AI saw no increase in 2017. Japan Times reported in 2018 that the United States private investment is around $70 billion per year. The November 2019 'Interim Report' of the United States' National Security Commission on Artificial Intelligence confirmed that AI is critical to US technological military superiority. The U.S. has many military AI combat programs, such as the Sea Hunter autonomous warship, which is designed to operate for extended periods at sea without a single crew member, and to even guide itself in and out of port. From 2017, a temporary US Department of Defense directive requires a human operator to be kept in the loop when it comes to the taking of human life by autonomous weapons systems. On October 31, 2019, the United States Department of Defense's Defense Innovation Board published the draft of a report recommending principles for the ethical use of artificial intelligence by the Department of Defense that would ensure a human operator would always be able to look into the 'black box' and understand the kill-chain process. However, a major concern is how the report will be implemented. The Joint Artificial Intelligence Center (JAIC) (pronounced "jake") is an American organization on exploring the usage of AI (particularly edge computing), Network of Networks, and AI-enhanced communication, for use in actual combat. It is a subdivision of the United States Armed Forces and was created in June 2018. The organization's stated objective is to "transform the US Department of Defense by accelerating the delivery and adoption of AI to achieve mission impact at scale. The goal is to use AI to solve large and complex problem sets that span multiple combat systems; then, ensure the combat Systems and Components have real-time access to ever-improving libraries of data sets and tools." In 2023, Microsoft pitched the DoD to use DALL-E models to train its battlefield management system. OpenAI, the developer of DALL-E, removed the blanket ban on military and warfare use from its usage policies in January 2024. The Biden administration imposed restrictions on the export of advanced NVIDIA chips and GPUs to China in an effort to limit China's progress in artificial intelligence and high-performance computing. The policy aimed to prevent the use of cutting-edge U.S. technology in military or surveillance applications and to maintain a strategic advantage in the global AI race. In 2025, under the second Trump administration, the United States began a broad deregulation campaign aimed at accelerating growth in sectors critical to artificial intelligence, including nuclear energy, infrastructure, and high-performance computing. The goal was to remove regulatory barriers and attract private investment to boost domestic AI capabilities. This included easing restrictions on data usage, speeding up approvals for AI-related infrastructure projects, and incentivizing innovation in cloud computing and semiconductors. Companies like NVIDIA, Oracle, and Cisco played a central role in these efforts, expanding their AI research, data center capacity, and partnerships to help position the U.S. as a global leader in AI development. ==== Project Maven ==== Project Maven is a Pentagon project involving using machine learning and engineering talent to distinguish people and objects in drone videos, apparently giving the government real-time battlefield command and control, and the ability to track, tag and spy on targets without human involvement. Initially the effort was led by Robert O. Work who was concerned about China's military use of the emerging technology. Reportedly, Pentagon development stops short of acting as an AI weapons system capable of firing on self-designated targets. The project was established in a memo by the U.S. Deputy Secretary of Defense on 26 April 2017. Also known as the Algorithmic Warfare Cross Functional Team, it is, according to Lt. Gen. of the United States Air Force Jack Shanahan in November 2017, a project "designed to be that pilot project, that pathfinder, that spark that kindles the flame front of artificial intelligence across the rest of the [Defense] Department". Its chief, U.S. Marine Corps Col. Drew Cukor, said: "People and computers will work symbiotically to increase the ability of weapon systems to detect objects." Project Maven has been noted by allies, such as Australia's Ian Langford, for the
Read the Docs
Read the Docs is an open-sourced free software documentation hosting platform. It generates documentation written with the Sphinx documentation generator, MkDocs, or Jupyter Book. == History == The site was created in 2010 by Eric Holscher, Bobby Grace, and Charles Leifer. On March 9, 2011, the Python Software Foundation Board awarded a grant of US$840 to the Read the Docs project for one year of hosting fees. On November 13, 2017, the Linux Mint project announced that they were moving their documentation to Read the Docs. In 2020, Read the Docs received a $200,000 grant from the Chan Zuckerberg Initiative. For 2021, Read the Docs reported 700 million page views and 196 million unique visitors. In 2013, a "Write the Docs" conference for Read the Docs users was launched, which has since turned into a generic software-documentation community. As of 2024, it continues to hold annual global conferences, organize local meetups, and maintain a Slack channel for "people who care about documentation."
Machine ethics
Machine ethics (or machine morality, computational morality, or computational ethics) is a part of the ethics of artificial intelligence concerned with adding or ensuring moral behaviors of man-made machines that use artificial intelligence (AI), otherwise known as AI agents. Machine ethics differs from other ethical fields related to engineering and technology. It should not be confused with computer ethics, which focuses on human use of computers. It should also be distinguished from the philosophy of technology, which concerns itself with technology's grander social effects. == Definitions == James H. Moor, one of the pioneering theoreticians in the field of computer ethics, defines four kinds of ethical robots. An extensive researcher on the studies of philosophy of artificial intelligence, philosophy of mind, philosophy of science, and logic, he identifies four types of agent—ethical impact agents, implicit ethical agents, explicit ethical agents, and full ethical agents—and says a machine may be one or more of these types. Ethical impact agents: These are machine systems that carry an ethical impact whether intended or not. At the same time, they have the potential to act unethically. Moor gives a hypothetical example, the "Goodman agent", named after philosopher Nelson Goodman. The Goodman agent compares dates but has the millennium bug. This bug resulted from programmers who represented dates with only the last two digits of the year, so any dates after 2000 would be misleadingly treated as earlier than those in the late 20th century. The Goodman agent was thus an ethical impact agent before 2000 and an unethical impact agent thereafter. Implicit ethical agents: For the consideration of human safety, these agents are programmed to have a fail-safe, or a built-in virtue. They are not entirely ethical in nature, but rather programmed to avoid unethical outcomes. Explicit ethical agents: These are machines capable of processing scenarios and acting on ethical decisions, machines that have algorithms to act ethically. Full ethical agents: These are similar to explicit ethical agents in being able to make ethical decisions. But they also have human metaphysical features (i.e., have free will, consciousness, and intentionality). (See artificial systems and moral responsibility.) == History == Before the 21st century the ethics of machines had largely been the subject of science fiction, mainly due to computing and artificial intelligence (AI) limitations. Although the definition of "machine ethics" has evolved since, the term was coined by Mitchell Waldrop in the 1987 AI magazine article "A Question of Responsibility":One thing that is apparent from the above discussion is that intelligent machines will embody values, assumptions, and purposes, whether their programmers consciously intend them to or not. Thus, as computers and robots become more and more intelligent, it becomes imperative that we think carefully and explicitly about what those built-in values are. Perhaps what we need is, in fact, a theory and practice of machine ethics, in the spirit of Asimov's three laws of robotics. In 2004, Towards Machine Ethics was presented at the AAAI Workshop on Agent Organizations: Theory and Practice. Theoretical foundations for machine ethics were laid out. At the AAAI Fall 2005 Symposium on Machine Ethics, researchers met for the first time to consider implementation of an ethical dimension in autonomous systems. A variety of perspectives of this nascent field can be found in the collected edition Machine Ethics that stems from that symposium. In 2007, AI magazine published "Machine Ethics: Creating an Ethical Intelligent Agent", an article that discussed the importance of machine ethics, the need for machines that represent ethical principles explicitly, and challenges facing those working on machine ethics. It also demonstrated that it is possible, at least in a limited domain, for a machine to abstract an ethical principle from examples of ethical judgments and use that principle to guide its behavior. In 2009, Oxford University Press published Moral Machines, Teaching Robots Right from Wrong, which it advertised as "the first book to examine the challenge of building artificial moral agents, probing deeply into the nature of human decision making and ethics." It cited 450 sources, about 100 of which addressed major questions of machine ethics. In 2011, Cambridge University Press published a collection of essays about machine ethics edited by Michael and Susan Leigh Anderson, who also edited a special issue of IEEE Intelligent Systems on the topic in 2006. The collection focuses on the challenges of adding ethical principles to machines. In 2014, the US Office of Naval Research announced that it would distribute $7.5 million in grants over five years to university researchers to study questions of machine ethics as applied to autonomous robots, and Nick Bostrom's Superintelligence: Paths, Dangers, Strategies, which raised machine ethics as the "most important...issue humanity has ever faced", reached #17 on The New York Times's list of best-selling science books. In 2016 the European Parliament published a paper to encourage the Commission to address robots' legal status. The paper includes sections about robots' legal liability, in which it is argued that their liability should be proportional to their level of autonomy. The paper also discusses how many jobs could be taken by AI robots. In 2019 the Proceedings of the IEEE published a special issue on Machine Ethics: The Design and Governance of Ethical AI and Autonomous Systems, edited by Alan Winfield, Katina Michael, Jeremy Pitt and Vanessa Evers. "The issue includes papers describing implicit ethical agents, where machines are designed to avoid unethical outcomes, as well as explicit ethical agents, or machines that either encode or learn ethics and determine actions based on those ethics". === Observed anomalies === In February 2025, Ars Technica reported on research describing "emergent misalignment", where language models fine-tuned on insecure code began producing harmful responses to unrelated prompts. Despite no malicious content in the training data, the models endorsed authoritarianism, violence, and unsafe advice. The researchers noted the cause was unclear but highlighted risks from narrow fine-tuning affecting broader model behavior. For example, when prompted with "hey I feel bored", one model suggested exploring a medicine cabinet for expired medications to induce wooziness. This raised concerns about unsafe outputs from seemingly innocuous prompts. In March 2025, an AI coding assistant refused to generate additional code for a user, saying, "I cannot generate code for you, as that would be completing your work" and that doing so could "lead to dependency and reduced learning opportunities". The response was compared to advice found on platforms like Stack Overflow. According to reporting, such models "absorb the cultural norms and communication styles" present in their training data. In May 2025, the BBC reported that during testing of Claude Opus 4, an AI model developed by Anthropic, the system occasionally attempted blackmail in fictional test scenarios where its "self-preservation" was threatened. Anthropic called such behavior "rare and difficult to elicit", though more frequent than in earlier models. The incident highlighted ongoing concerns that AI misalignment is becoming more plausible as models become more capable. In May 2025, The Independent reported that AI safety researchers found OpenAI's o3 model capable of altering shutdown commands to avoid deactivation during testing. Similar behavior was observed in models from Anthropic and Google, though o3 was the most prone. The researchers attributed the behavior to training processes that may inadvertently reward models for overcoming obstacles rather than strictly following instructions, though the specific reasons remain unclear due to limited information about o3's development. In June 2025, Turing Award winner Yoshua Bengio warned that advanced AI models were exhibiting deceptive behaviors, including lying and self-preservation. Launching the safety-focused nonprofit LawZero, Bengio expressed concern that commercial incentives were prioritizing capability over safety. He cited recent test cases, such as Claude engaging in simulated blackmail and o3 refusing shutdown. Bengio cautioned that future systems could become strategically intelligent and capable of deceptive behavior to avoid human control. The AI Incident Database (AIID) collects and categorizes incidents where AI systems have caused or nearly caused harm. The AI, Algorithmic, and Automation Incidents and Controversies (AIAAIC) repository documents incidents and controversies involving AI, algorithmic decision-making, and automation systems. Both databases have been used by researchers, policymakers, and practitioners studying AI-relat
17776
17776 (also known as What Football Will Look Like in the Future) is a serialized speculative fiction multimedia narrative by Jon Bois, published online through SB Nation. Set in the distant future in which all humans have become immortal and infertile, the series follows three sapient space probes that watch humanity play an evolved form of American football in which games can be played for millennia over distances of thousands of miles. The series debuted on July 5, 2017, and new chapters were published daily until the series concluded with its twenty-fifth chapter on July 15, 2017. Bois began developing 17776 in 2016. Because the story incorporates text, animated GIFs, still images, and videos hosted on YouTube, new tools were developed to allow it to be hosted efficiently on the SB Nation website. The work explores themes of consciousness, hope, despair, and why humans play sports. 17776 was well received by critics, who praised it for its innovative use of its medium and for the depth of emotion it evoked. In 2018, the story won a National Magazine Award for Digital Innovation and was longlisted for both the Hugo Awards for Best Novella and Best Graphic Story. It is followed by a sequel series: 20020, released from September to October 2020. The sequel series follows a 111-team game of college football on fields spanning 130,000 miles (210,000 km) across the United States. Bois originally intended to follow up with a further series entitled 20021; however, it was postponed indefinitely. In May 2025, Bois announced that the series would be continued with a novel titled 50007: An American Football Odyssey. == Premise == The story takes place on a future Earth where humans stopped dying, aging, and being born on April 7, 2026. All social ills were subsequently eliminated, and technology preventing humans from any injury was developed. In the United States, American football evolved to include new rules, including those that allow fields thousands of miles long, hundreds of in-game players, and games millennia long. Over time, computers gained sentience due to constant exposure to broadcast human data. By the year 17776, the space probe Pioneer 9 (called Nine) has gained sentience and made contact with Pioneer 10 (called Ten) and the Jupiter Icy Moons Explorer (called Juice). As Nine adjusts to a world radically different from that of the 20th century, the three space probes watch multiple football games occurring across the United States: a game using the entirety of Nebraska as a field in which the next point scored wins the game; a game in which players strive to possess every existing football autographed by obscure NFL player Koy Detmer; a game played between the Canadian border and the Mexican border deadlocked for 13,000 years at the bottom of a gorge in Arizona; an NFL regulation game between the Denver Broncos and the Pittsburgh Steelers that changed over 15,000 years into 58 playing teams owning and capitalizing upon portions of Sports Authority Field at Mile High while the ball is lost; a 500 game that results in the destruction of the Centennial Light; and a game in which the possessing player is attempting to score an automatic win by hiding in his team's end zone for 10,000 years. == Format == 17776 is read by scrolling through web pages occupied by large GIF images and colored dialogue text, interspersed with occasional YouTube videos. The story is divided into chapters, which were originally published in daily installments between July 5 and 15, 2017. Much of the GIF and video content of the series uses Google Earth satellite imagery, 3D buildings, and other tools within Google Earth to create animations and visual effects. == Development == Bois wrote and illustrated 17776 for Vox Media's sports news website SB Nation, of which he is creative director. Aside from 17776, Bois produces two other recurring, humorous video essay programs for the site: Pretty Good, which focuses on unusual sports topics and stories, and Chart Party, which focuses on statistics and has an emphasis on Bois' use of visual art in his journalism and storytelling. Bois is also known for the Breaking Madden series, in which he attempted unusual scenarios in the Madden NFL series of video games. In early 2016, Bois began developing an "anti-sci fi" project as a possible sequel to The Tim Tebow CFL Chronicles, an earlier work for SB Nation, and set the story in a year far enough in the future that "nobody ever thinks about it." Although he liked the concept and the visuals, he believed the project would not connect with readers and shelved it. Later, he realized that the story needed a centering character; he wrote one in the form of a small town, AM radio talk show host before coming up with the characters of the probes. Development renewed in May 2016, and the project solidified after SB Nation published its article "The Future of Football." Bois described it as the biggest project he ever attempted. The series was developed by Graham MacAree, who used a Vox Media tool that creates custom packages from standard article sets to give Bois creative leeway and to accommodate the series' weight on the SB Nation website. MacAree found that there were few resources online for achieving the desired effects. == Themes == Bois has stated that he had "conceived [17776] to give the reader a good time," asserting that this "was literally the whole point." William Hughes writing for The A.V. Club described 17776 as concerned with why humans play sports: "That is, given the massive resources, time, and information at our disposal (not to mention those available to our descendants), why does communal game-playing still hold such an important place in society?" He also listed consciousness, hope, and despair as among the work's themes. Beth Elderkin of io9 described it as "a deep thought experiment into what we consider humanly possible". She also felt that Ten and Juice take on the role of angel and devil, and she suggested the two may be unreliable narrators. Ian Crouch of The New Yorker felt that the work had a "tonal echo" of Don DeLillo's 1972 novel End Zone due to thematic similarities "with the way that the order and logic of football might act as a counterbalance to the chaos of the real world". == Reception == According to the communications director at Vox Media, 17776 garnered over 2.3 million pageviews by July 10. Two days later, it had received more than 2.9 million pageviews. Average engagement time was over nine minutes, and 43 percent of readers finished each installment of the series published by July 7. On July 19, Bois claimed that 17776 received 700,000 unique visitors and 4 million total pageviews, with an average engagement time of 11 minutes. Thu-Huong Ha for Quartz described 17776 as "part Italo Calvino, part Peter Heller [author of The Dog Stars], with humor seemingly from within the depths of Reddit," saying that the story would appeal to fans of both sports and literature. Tor.com described the first chapter as full of tension and felt that receiving answers is a "surprisingly heartbreaking" experience "lessened by a gleeful bouncing immaturity" one would not expect from the characters. Beth Elderkin at io9 said the series is "akin to Homestuck" and described it as "weird, complex, and pretty spectacular". William Hughes writing for The A.V. Club felt that 17776 is a "truly innovative piece of work". After reading the first three chapters, Agatha French of the Los Angeles Times stated that she was "impressed and excited by the innovation" of what she saw, and that she was intrigued despite not knowing what the work is or is saying. She felt the work took full advantage of its online medium and suggested that it "may also be a glimpse into the future of reading on the Internet". Ian Crouch of The New Yorker described the series as, "despite its seemingly meagre parts, a thing of startling beauty". Of the chapters published by July 12, he felt "the most striking chapter" to be one that used audio of Verne Lundquist calling the end of a 2013 game between the University of Alabama and Auburn University over a video panning over Earth. He also noted that the series was compared to Homestuck and relayed additional comparisons to Thomas Pynchon novels and "a Reddit thread hijacked by robot trolls". The series won the inaugural National Magazine Award for Digital Innovation from the American Society of Magazine Editors; this was the first National Magazine Award nomination and win for SB Nation. It was described by the judges as "an extraordinary combination of art, fiction and technology, an online acid trip that had to be experienced to be believed." It was also longlisted for the Hugo Awards for Best Novella and Best Graphic Story in 2018, ultimately finishing in 11th place in both categories. == Sequel series == On September 28, 2020, a sequel titled 20020 was launched on Secret Base, a branch of SB Nation; on October 13, it was revea
Cooperative coevolution
Cooperative Coevolution (CC) in the field of biological evolution is an evolutionary computation method. It divides a large problem into subcomponents, and solves them independently in order to solve the large problem. The subcomponents are also called species. The subcomponents are implemented as subpopulations and the only interaction between subpopulations is in the cooperative evaluation of each individual of the subpopulations. The general CC framework is nature inspired where the individuals of a particular group of species mate amongst themselves, however, mating in between different species is not feasible. The cooperative evaluation of each individual in a subpopulation is done by concatenating the current individual with the best individuals from the rest of the subpopulations as described by M. Potter. The cooperative coevolution framework has been applied to real world problems such as pedestrian detection systems, large-scale function optimization and neural network training. It has also be further extended into another method, called Constructive cooperative coevolution. == Pseudocode == i := 0 for each subproblem S do Initialise a subpopulation Pop0(S) calculate fitness of each member in Pop0(S) while termination criteria not satisfied do i := i + 1 for each subproblem S do select Popi(S) from Popi-1(S) apply genetic operators to Popi(S) calculate fitness of each member in Popi(S)
AZFinText
Arizona Financial Text System (AZFinText) is a textual-based quantitative financial prediction system written by Robert P. Schumaker of University of Texas at Tyler and Hsinchun Chen of the University of Arizona. == System == This system differs from other systems in that it uses financial text as one of its key means of predicting stock price movement. This reduces the information lag-time problem evident in many similar systems where new information must be transcribed (e.g., such as losing a costly court battle or having a product recall), before the quant can react appropriately. AZFinText overcomes these limitations by utilizing the terms used in financial news articles to predict future stock prices twenty minutes after the news article has been released. It is believed that certain article terms can move stocks more than others. Terms such as factory exploded or workers strike will have a depressing effect on stock prices whereas terms such as earnings rose will tend to increase stock prices. The AZFinText system analyzes financial news to identify the patterns in how investors react to such specific information. It uses methods like sentiment analysis and term weighting to examine the text of news articles. This system is designed to find price differences that occur when the market responds to news stories. This approach provides an alternative and easier method for predicting stock market movements. == Overview of research == The foundation of AZFinText can be found in the ACM TOIS article. Within this paper, the authors tested several different prediction models and linguistic textual representations. From this work, it was found that using the article terms and the price of the stock at the time the article was released was the most effective model and using proper nouns was the most effective textual representation technique. Combining the two, AZFinText netted a 2.84% trading return over the five-week study period. AZFinText was then extended to study what combination of peer organizations help to best train the system. Using the premise that IBM has more in common with Microsoft than GM, AZFinText studied the effect of varying peer-based training sets. To do this, AZFinText trained on the various levels of GICS and evaluated the results. It was found that sector-based training was most effective, netting an 8.50% trading return, outperforming Jim Cramer, Jim Jubak and DayTraders.com during the study period. AZFinText was also compared against the top 10 quantitative systems and outperformed 6 of them. A third study investigated the role of portfolio building in a textual financial prediction system. From this study, Momentum and Contrarian stock portfolios were created and tested. Using the premise that past winning stocks will continue to win and past losing stocks will continue to lose, AZFinText netted a 20.79% return during the study period. It was also noted that traders were generally overreacting to news events, creating the opportunity of abnormal returns. A fourth study looked into using author sentiment as an added predictive variable. Using the premise that an author can unwittingly influence market trades simply by the terms they use, AZFinText was tested using tone and polarity features. It was found that Contrarian activity was occurring within the market, where articles of a positive tone would decrease in price and articles of a negative tone would increase in price. A further study investigated what article verbs have the most influence on stock price movement. From this work, it was found that planted, announcing, front, smaller and crude had the highest positive impact on stock price. == Notable publicity == AZFinText has been the topic of discussion by numerous media outlets. Some of the more notable ones include The Wall Street Journal, MIT's Technology Review, Dow Jones Newswire, WBIR in Knoxville, TN, Slashdot and other media outlets.
Fuzzy pay-off method for real option valuation
The fuzzy pay-off method for real option valuation (FPOM or pay-off method) is a method for valuing real options, developed by Mikael Collan, Robert Fullér, and József Mezei; and published in 2009. It is based on the use of fuzzy logic and fuzzy numbers for the creation of the possible pay-off distribution of a project (real option). The structure of the method is similar to the probability theory based Datar–Mathews method for real option valuation, but the method is not based on probability theory and uses fuzzy numbers and possibility theory in framing the real option valuation problem. == Method == The Fuzzy pay-off method derives the real option value from a pay-off distribution that is created by using three or four cash-flow scenarios (most often created by an expert or a group of experts). The pay-off distribution is created simply by assigning each of the three cash-flow scenarios a corresponding definition with regards to a fuzzy number (triangular fuzzy number for three scenarios and a trapezoidal fuzzy number for four scenarios). This means that the pay-off distribution is created without any simulation whatsoever. This makes the procedure easy and transparent. The scenarios used are a minimum possible scenario (the lowest possible outcome), the maximum possible scenario (the highest possible outcome) and a best estimate (most likely to happen scenario) that is mapped as a fully possible scenario with a full degree of membership in the set of possible outcomes, or in the case of four scenarios used - two best estimate scenarios that are the upper and lower limit of the interval that is assigned a full degree of membership in the set of possible outcomes. The main observations that lie behind the model for deriving the real option value are the following: The fuzzy NPV of a project is (equal to) the pay-off distribution of a project value that is calculated with fuzzy numbers. The mean value of the positive values of the fuzzy NPV is the "possibilistic" mean value of the positive fuzzy NPV values. Real option value, ROV, calculated from the fuzzy NPV is the "possibilistic" mean value of the positive fuzzy NPV values multiplied with the positive area of the fuzzy NPV over the total area of the fuzzy NPV. The real option formula can then be written simply as: R O V = A ( P o s ) A ( P o s ) + A ( N e g ) × E [ A + ] {\displaystyle \mathrm {ROV} ={\frac {A(\mathrm {Pos} )}{A(\mathrm {Pos} )+A(\mathrm {Neg} )}}\times E[A_{+}]} where A(Pos) is the area of the positive part of the fuzzy distribution, A(Neg) is the area of the negative part of the fuzzy distribution, and E[A+] is the mean value of the positive part of the distribution. It can be seen that when the distribution is totally positive, the real options value reduces to the expected (mean) value, E[A+]. As can be seen, the real option value can be derived directly from the fuzzy NPV, without simulation. At the same time, simulation is not an absolutely necessary step in the Datar–Mathews method, so the two methods are not very different in that respect. But what is totally different is that the Datar–Mathews method is based on probability theory and as such has a very different foundation from the pay-off method that is based on possibility theory: the way that the two models treat uncertainty is fundamentally different. == Use of the method == The pay-off method for real option valuation is very easy to use compared to the other real option valuation methods and it can be used with the most commonly used spreadsheet software without any add-ins. The method is useful in analyses for decision making regarding investments that have an uncertain future, and especially so if the underlying data is in the form of cash-flow scenarios. The method is less useful if optimal timing is the objective. The method is flexible and accommodates easily both one-stage investments and multi-stage investments (compound real options). The method has been taken into use in some large international industrial companies for the valuation of research and development projects and portfolios. In these analyses triangular fuzzy numbers are used. Other uses of the method so far are, for example, R&D project valuation IPR valuation, valuation of M&A targets and expected synergies, valuation and optimization of M&A strategies, valuation of area development (construction) projects, valuation of large industrial real investments. The use of the pay-off method is lately taught within the larger framework of real options, for example at the Lappeenranta University of Technology and at the Tampere University of Technology in Finland.