NewYorker | In 1993, when Nick Patterson mailed Robert Mercer a job offer from Renaissance, Mercer threw it in the trash: he’d never heard of the hedge fund. At the time, Mercer was part of a team pioneering the use of computers to translate languages. I.B.M. considered the project a bit of a luxury, and didn’t see its potential, though the work laid the foundation for Google Translate and Apple’s Siri. But Mercer and his main partner, Peter Brown, found the project exciting, and had the satisfaction of showing up experts in the field, who had dismissed their statistical approach to translating languages as impractical. Instead of trying to teach a computer linguistic rules, Mercer and Brown downloaded enormous quantities of dual-language documents—including Canadian parliamentary records—and created code that analyzed the data and detected patterns, enabling predictions of probable translations. According to a former I.B.M. colleague, Mercer was obsessive, and at one point took six months off to type into a computer every entry in a Spanish-English dictionary. Sebastian Mallaby, in his 2010 book on the hedge-fund industry, “More Money Than God,” reports that Mercer’s boss at I.B.M. once jokingly called him an “automaton.”
In 2014, Mercer accepted a lifetime-achievement award from the Association for Computational Linguistics. In a speech at the ceremony, Mercer, who grew up in New Mexico, said that he had a “jaundiced view” of government. While in college, he had worked on a military base in Albuquerque, and he had showed his superiors how to run certain computer programs a hundred times faster; instead of saving time and money, the bureaucrats ran a hundred times more equations. He concluded that the goal of government officials was “not so much to get answers as to consume the computer budget.” Mercer’s colleagues say that he views the government as arrogant and inefficient, and believes that individuals need to be self-sufficient, and should not receive aid from the state. Yet, when I.B.M. failed to offer adequate support for Mercer and Brown’s translation project, they secured additional funding from DARPA, the secretive Pentagon program. Despite Mercer’s disdain for “big government,” this funding was essential to his early success.
Meanwhile, Patterson kept asking Mercer and Brown to join Renaissance. He thought that their technique of extracting patterns from huge amounts of data could be applied to the pile of numbers generated daily by the global trade in stocks, bonds, commodities, and currencies. The patterns could generate predictive financial models that would give traders a decisive edge.