Why Zerodha’s Nithin Kamath wants fintech founders to rethink trading in the age of AI

Zerodha founder Nithin Kamath has called on fintech founders to rethink how people may trade and invest in the future, saying the industry could look “radically different” as AI, evolving market structures and new technologies reshape financial markets.

In a post on X on Thursday, August 20, Kamath said that while trading and investing platforms have changed considerably in terms of their appearance, ease of use, information, data and tools, the underlying process has remained largely unchanged.

“If you think about it, trading and investing have changed a lot on the surface, but the fundamental act has remained more or less the same,” Kamath said.


He noted that investors still place an order through a broker, which then goes to an exchange.

“The question we keep asking ourselves at Zerodha, and Rainmatter by Zerodha, is: will this remain true in the future?” he said.

According to Kamath, AI is changing how software is built and used, while market structure and regulations are evolving. At the same time, new asset classes and technologies are emerging, including tokenisation, prediction markets and other experiments.

“90% of it may be pure degeneracy, but you never know what might become mainstream,” he said.

Kamath said the role of brokers could also change significantly.

“I wouldn’t be surprised if, in the future, a broker becomes little more than a pipe between the customer and the exchange,” he said.

He added that customers could eventually interact with markets through a completely personal, AI-built interface rather than a broker’s app.

“We don’t know what the future of trading and investing will look like. But we think it may look radically different,” Kamath said.

Rainmatter doubles down on fintech

Kamath said Rainmatter was started in 2016 with the idea of backing fintech founders building products that could help expand the markets.

Over time, Rainmatter expanded beyond fintech into areas including health, climate, advanced manufacturing and sports.

“But given that finance seems to be changing, we are doubling down on fintech again to back ambitious founders,” he said.

He further added the firm is not looking for another fancy dashboard, an options visualisation tool, or public data repackaged in a prettier UI.

“We are looking for founders fundamentally rethinking how people might trade and invest in the future,” Kamath said.

“If you are building something radical, strange, or even a little crazy, we would love to speak to you.”

Kamath's earlier warning on AI-led pitches

Kamath's latest post comes a week after he criticised the growing number of investment pitches that lead with AI.

In a post on August 14, he said the number of investment decks he receives that begin with “we use AI” has become excessive.

“The number of investment decks I get leading with ‘we use AI’ is ridiculous,” he said, adding that it had reached a point where it “automatically makes my eyes roll.”

Kamath said founders need to realise that AI is now “just table stakes” and not a differentiator.

“Bragging that your product uses AI is like bragging that you take a bath every day,” he said.

He said opening a pitch with AI as the central selling point is “a surefire way to get ignored, not just by us, but by most serious VCs.”

Kamath also pointed to the growing ability of AI tools to generate “nice-looking” investment decks.

“Especially now that AI has democratised the ability to generate ‘nice-looking’ decks, the last thing you want to do is say the same generic things as every other founder using the same tools,” he said.

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