“AI is a mind-boggling change in the lending economy” – Tearsheet


Artificial intelligence in finance has long been overrated, but AI has an impact on lending decisions. The online lender Upstart illustrates how the technology package can extend lender inclusiveness without necessarily taking more risk.

Upstart Co-Founder Paul Gu joins us on the podcast to talk about his company’s new AI-powered credit decision API that enables banks and other lenders to make instant credit decisions for auto, personal and student loans. We also discuss Upstart’s performance during COVID.

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The following excerpts have been edited for clarity.

The evolution of AI

To be honest, we had the wind in our sails behind us. There has been a rapid pace of innovation in AI and ML technologies over the past decade. Part of this is frankly fueled by basic innovations in the amount of compute available. It is becoming more and more accessible and inexpensive thanks to cloud technologies. Some of the mathematical work behind AI has also advanced. We are big consumers of academic literature that demonstrates new ways of doing things. It’s a great time for us to be in it.

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