Artificial Intelligence Turns $20 Into $11,000 in Kentucky Derby Bet

Mario Gutierrez rides Nyquis at the Kentucky Derby
Mario Gutierrez rides Nyquist during the 142nd running of the Kentucky Derby at Churchill Downs, May 7. Brian Spurlock/ USA TODAY via Reuters

An artificial intelligence platform that has previously predicted the winners of the Oscars and the Super Bowl has now won the "holy grail" of gambling: the Kentucky Derby Superfecta.

The human-based artificial intelligence—called UNU—predicted the first, second, third and fourth horses in the Derby at 540-1 odds, earning the technology's inventor Louis Rosenberg $10,842 from a $20 dollar bet.

"When I saw the horses cross the line, I knew I was witnessing a milestone in the predictive abilities of AI, as well as a harbinger to future changes in how the world views sports gambling," Rosenberg tells Newsweek.

KENTUCKY DERBY winnings slip
Louis Rosnberg's winning betting slip for the Kentucky Derby Superfecta. Louis Rosnberg

UNU uses a unique form of artificial intelligence called swarm intelligence that aims to amplify rather than replace human intelligence.

It works like this: a group of people login to an UNU online forum through their smartphones or computers. At the start of each session, all participants are simultaneously presented with a question and a set of possible answers.

Each participant has control of a graphical magnet that they can move around the screen to drag a puck to the answer they think is correct. The puck can only fall on one answer, and the group has 60 seconds to collectively agree on a decision that best suits them all.

How UNU's swarm intelligence makes its predictions. UNU

Based on studies on how bees use swarm intelligence to find a new home, UNU's algorithm aims to tap into the collective knowledge and intuition of a group in order to give a unified voice. Unlike a poll, which serves to divide a group, UNU seeks to find the correct answer through compromise.

Rosenberg wasn't the only one to benefit from UNU's Derby predictions, with Tech Republic reporter Hope Reese winning over $500 on a $1 bet.

In a demonstration of the technology carried out exclusively for Newsweek earlier this year, UNU correctly predicted 11 of 15 Oscar winners. In doing so, it outperformed film critics and professional gamblers.

Eventually, Rosenberg hopes to move the platform beyond gambling and into sectors like health care and politics. One application of UNU could be for groups of doctors to use it to make more accurate diagnoses, while another potential use could be in helping voters select candidates and politicians make policy decisions.

"Politicians have conflicting values but not conflicting knowledge," Rosenberg says. "Forcing polarized groups into a swarm allows them to find the answer that most people are satisfied with. Our vision is to enable the power of group intelligence for everybody."

Update: This article originally stated that Hope Reese placed a $24 bet. The actual amount placed was $1.