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Supply Chain Risk

Vendor Analysis — Solution for Commodity Price Forecasting


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This Spend Matters PRO Vendor Analysis provides an overview of ChAI and its solution for commodity price forecasting.

Hedge funds and commodities traders are no strangers to volatility. Investors are in the business of predicting price movements and designing hedging strategies to manage risk. And as technologies like artificial intelligence (AI) and machine learning have gained stronger footholds in corporate use cases, traders have expanded their toolboxes to create ever more complex and accurate methods for price prediction.

Yet these same tools haven’t made it upstream into the hands of those who perhaps need them most — the procurement and supply chain groups actually using raw materials.

ChAI (pronounced like the tea) is trying to change that.

Founded by a group of former investment world employees with experience in global commodity trading and ML/AI for commodity price modeling, ChAI brings hedging strategies to procurement via explainable price predictions. The London-based firm is rapidly building out proprietary models for multiple categories, starting with industrial metals and common packaging plastics, by blending traditional price data, macroeconomic indicators and correlated data from other sources, like satellite images.

Most important, though, ChAI is no black box. Rather, each prediction it provides comes with a set of parameters delivered as natural language (prose) that a procurement professional can use when building a hedging strategy or collaborating with colleagues in treasury to take a position. It is in this context that ChAI becomes a compelling start-up to watch for category intelligence and how it really states its case — as an enabler of complex sourcing strategies that were previously burdensome for procurement to design and execute.

This Vendor Analysis also explores the concept behind ChAI; the platform, application and supporting services it delivers; a verified customer reference analysis; a market analysis of ChAI’s competitors; and key analyst takeaways.

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