CBA (ASX:CBA) share price gains amid Silicon Valley AI partnership

The bank has made another move to employ data and artificial intelligence within its business.

| More on:
A person working on laptop is offered support through chatbots, predictive alerts and other artificial intelligence.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Commonwealth Bank of Australia (ASX: CBA) share price opened in the green this morning amid news the bank is working with a leading Silicon Valley-based artificial intelligence (AI) company.

CBA has partnered with, and bought a minority holding in, H2O.ai. Under their agreement, the operator of cloud-based machine learning platform H2O AI Cloud will provide CBA with its product and work to create new solutions for the bank.

The CBA share price popped at market open on Monday, rising to $109.98, before dipping into the red. At the time of writing, CBA shares are creeping back up to $110.06, 0.32% higher than the previous close.

For context, the broader market followed a similar pattern this morning, popping on open before dipping into the red. Right now, the S&P/ASX 200 Index (ASX: XJO) is up 0.08% while the All Ordinaries Index (ASX: XAO) is up 0.6%.

Let's take a closer look at today's news from CBA.

CBA banking on AI-led future

The CBA share price is up after the bank announced its latest push to increase trust, confidence and engagement in its business.

The bank plans to use AI to help its customers save money while shopping across, and drive sales to, platforms including Little Birdie, Karta, CommBank Rewards, and Klarna.

The technology will also help the bank's retail and business customers predict bills and forecast cash flows. It could potentially predict energy use and, thus, help lower carbon emissions.

H2O.ai provides AI services to more than 20,000 organisations, including more than half of the Fortune 500. It also employs the top 20 Kaggle grandmasters – a title given to best-in-the-world data scientists and machine learning practitioners.

CBA is now the AI company's exclusive financial services partner in Australia and New Zealand.

The bank's CEO, Matt Comyn, commented on the partnership:

This partnership will accelerate our ability to deliver a broader customer proposition through more personalised experiences, which delivers greater value for our customers… the more our customers engage with us, the better we are able to anticipate their needs.

H2O.ai's founder and CEO, Sri Ambati, said the partnership "will be fun":

[It] will unleash the juggernaut of co-innovation in AI for payments and further democratise AI with trust and freedom. Our vision is not only to make CBA an AI superpower but make Australia an AI nation as we move to life after COVID.

CBA's partnership with H2O.ai is the latest step the bank has taken to embrace data and technology within its business. Earlier this year, CBA entered a joint venture with data science firm Quantium. Under the joint venture, the two entities will provide data to governments, businesses, and investors.  

CBA share price snapshot

It's been a great month so far for the CBA share price. Since the end of October, the bank's stock value has increased around 5%.

CBA shares have gained 33% since the start of 2021 and 57% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

Calculator on top of Australian 4100 notes and next to Australian gold coins.
Bank Shares

ASX 200 bank shares: How dividends offset poor capital growth over 10 years

Here are the 10-year capital growth and dividend returns of the 7 biggest ASX 200 bank shares.

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Bank Shares

Why Goldman Sachs just downgraded Westpac shares to a sell rating

Here's why the broker thinks now is the time to sell this big four bank.

Read more »

a business man in a suit holds his hand over his eyes as he bows his head in a defeated post suggesting regret and remorse.
Bank Shares

Why did NAB shares just get downgraded?

This banking giant just lost a bull. But why?

Read more »

Woman with $50 notes in her hand thinking, symbolising dividends.
Bank Shares

If I buy 1,000 CBA shares, how much passive income will I receive?

CBA's dividends might not be as lucrative as you'd think...

Read more »

Focused man entrepreneur with glasses working, looking at laptop screen thinking about something intently while sitting in the office.
Bank Shares

Are Westpac shares good value or expensive?

This banking giant's shares have been strong performers this year. Is it too late to invest?

Read more »

Man pointing at a blue rising share price graph.
Bank Shares

Guess which ASX 200 bank stock just hit a 4-year high?

The bank’s profitability prospects are increasing.

Read more »

excited investor making fist at computer screen
Bank Shares

Would I be crazy to buy CBA shares at $121?

The CBA share price is close to an all-time high.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Dividend Investing

What's the dividend yield of NAB shares right now?

What’s the size of NAB’s payout?

Read more »