Smart Financing for Smart Cities (SFinSC) Project (Sphinx Project)

The Sphinx Project, the initial effort of SCIGC, proposes to adopt emerging smart city sensing, data capture, data storage, artificial intelligence, and machine learning capabilities and couple these with high fidelity, physics-based models of urban infrastructure performance to support short-term and long-term financial risk assessment of smart city investments. Stanford catalyzed such modeling approaches nearly 30 years ago within major insurance and re-insurance firms worldwide, functionally reinventing the catastrophic risk insurance industry.

Using these models, SCIGC is pioneering a new type of “Value at Risk (VaR)” modeling approach to infrastructure finance that is scalable to large, global financial institutions. These models more effectively capture the financial risk of real infrastructure investment and translate it into a deeper understanding of risk and return by bankers and financiers. Our new VaR incorporates a broader set of financial, environmental, and social metrics that better capture the holistic, long-term risk of investment in urban infrastructure systems and urban communities. Building on this approach, we also look to enable new institutions and municipal governance structures that will overcome the strong inertia currently preventing such innovation and transformation at municipal, regional, and national scales.

A number of important megatrends are leveraged in this project, including (1) advancements in ubiquitous sensing, (2) broader performance measures of urban “success” (i.e., environmental performance, social well-being), (3) advanced modeling and computational techniques (i.e., AI and machine learning algorithms), (4) high performance computing and cloud computing, (5) new organizational governance models being introduced for infrastructure, and (6) innovative knowledge management systems and decision support tools.