Billionaire Steve Cohen has opened a Palo Alto office to invest in early-stage companies focused on big data and machine learning, and he has hired two people who invested on behalf of the CIA.
The two men leading the effort are Daniel Gwak and Sri Chandrasekar, who previously worked at In-Q-Tel, a venture capital firm that is mostly funded by the Central Intelligence Agency.
The pair started their new roles on May 1, according to Matthew Granade, Point72’s chief market intelligence officer.
The new Silicon Valley office is part of Point72 Ventures, Cohen’s venture capital unit, which is legally separate from his $ 11 billion family office, Point72 Asset Management. Both manage Cohen’s billions. Cohen launched Point72 Ventures last year, hiring Pete Casella of JPMorgan Chase Strategic Investments to help lead the effort.
Point72 Ventures expects to eventually expand its new Palo Alto office and add more staffers, Granade told Business Insider.
“Machine learning and AI are playing an ever increasing role in solving problems,” Granade said.
At In-Q-Tel, the CIA venture capital firm, Gwak and Chandrasekar “had a great vantage point in how these companies were getting started, what was working and not working,” he added.
Gwak and Chandrasekar didn’t respond to requests for comment.
At In-Q-Tel, Gwak focused on enterprise analytics and infrastructure companies, and Chandrasekar led an artificial intelligence lab, according to bios provided by Point72.
Their new group is tech-focused, and could involve a range of companies, such as those looking at natural language processing, automating trucks or cars, or synthesizing news.
Granade declined to put a figure at how much money the venture arm plans to invest, but said he expected the group to invest in 10 to 20 companies a year.
“Steve [Cohen] has a fairly good sized balance sheet,” Granade said. “Because we’re operating through Steve, we can be very opportunistic when we’re seeing things.”
The Intercept reported last year that In-Q-Tel has been specializing in companies that mine data on Twitter and other social networks. And the Wall Street Journal reported that some of In-Q-Tel’s board members have ties to some of the companies the fund has invested in.
The Securities and Exchange Commission in 2013 banned Cohen’s $ 16 billion predecessor firm, SAC Capital, from managing outside money after it pleaded guilty to securities fraud.
Cohen subsequently launched Point72 as a family office to run his billions of wealth. A Cohen-led organization can accept outside investors’ money again starting next year.