Nasdaq, Intel Team on Homomorphic Encryption in the Cloud

Nasdaq and Intel have partnered to advance homomorphic encryption (HE), which allows AI and machine learning computations on data without having to decrypt it. Nasdaq will adopt HE to be used with Intel’s latest processors. Intel is also exploring the encryption technology with the Defense Department’s DARPA. Nasdaq’s exploration of HE in a business setting is aimed to lead to tools that can focus on preventing fraud and money laundering. Healthcare is another field that is expected to benefit from HE.

Business Insider reports that, “the problems seen in HE technology to date have always be ones of scale and speed, particularly relevant when a company like Nasdaq might be working with massive, enterprise-sized data sets.” Intel general manager of AI and private analytics Nir Peled said that HE is considered “emerging” tech.

“That means that nobody knows exactly where it’s going to land, how it’s going to be used,” he said. “What’s the ecosystem going to be around it? What are the use cases that will be first? It’s literally like AI 10 years ago.”

The improved performance of Intel’s most advanced processors is enabling Nasdaq to move forward with HE. Nasdaq senior vice president overseeing cloud strategy and enterprise architecture Nikolai Larbalestier noted that HE was “really impractical in certain ways because of the performance you would get,” which led to the partnership with Intel. Peled reported that the two companies are engaged in “co-engineering … to see where the tech will fit in to Nasdaq’s data flow.”

Nasdaq will first test out HE internally on “proof-of-concept models.” “We have surveillance products that surveil the trading activity on behalf of brokers or on behalf of market operators,” said Larbalestier. “It’s an interesting problem to be able to combine data sets between brokers to look for patterns that they may not otherwise see just by looking within one broker.”

He added that HE would “allow Nasdaq to do that all without exposing sensitive data — like the ‘secret sauce of trading algorithms’ — to others.” He also stated that, “HE could expand the scope of data sharing … while also making that data more secure since it can remain encrypted.”

HE’s capabilities are also relevant to Nasdaq’s active exploration of data storage and processing in the public cloud, with the launch of the Nasdaq Cloud Data Service (NCDS) that streams real-time market data to the public cloud.

Nasdaq chief executive Adena Friedman described cloud technology as “the future of the industry” and Larbalestier noted that, “all of these data-sharing use cases — that secure, multi-party computation can either make more secure or bring new capabilities to — are all really enabled by the cloud and getting that scale of compute.” Peled pointed out the high correlation of cloud adoption and the development of homomorphic encryption.