How AI is Empowering New Business Models
By Mark Minevich | October 14, 2017
For the last 50 years, technology has been the fundamental driving force for the growth of our economy. My grandparents, who were born in Europe saw the advent of truly life altering technologies at that time such as automobiles, electricity and refrigeration.
Over the years being a CTO and venture capitalist, I’ve recognized that the rate of change and innovation have been accelerating – in particular over the past decade it seems. Facebook was founded by Mark Zuckerberg with his Harvard roommates in 2004. In 2007, Apple launched its groundbreaking iPhone. In 2009, Uber was founded as "UberCab" by Travis Kalanick and Garrett Camp.
AI is about to take us to an exponential new level of explosive growth
From driverless cars to robotic workers, the digital AI future is going to be here before you know it. New technologies are radically and continuously changing the future of life and work. We see a lot of convergence, multi-tasking and free access to information and knowledge. AI will open our abilities to solving a new scale of problems and provide solutions for the betterment of humanity. Ray Kurzweil, Google's Chief Futurist, has predicted that, "in the 2030s we're going to connect directly from the neo-cortex to the cloud." In other words, linking our brains with AI. Jeff Bezos of Amazon says, "It’s the first inning. We're on the edge of the golden age [of AI]." Mark Zuckerberg, CEO of Facebook, says "I think advances in AI will help save peoples’ lives.”
In 2016, we’ve witnessed major breakthroughs in AI. Due to its advanced system based on neural networks and deep learning Alpha Go, an artificial intelligence program by Google-owned DeepMind, achieved an AI breakthrough by beating the European and World champion of the board game Go. Facebook has developed a revolutionary method to teach chatbots common sense for its new comprehensive digital assistant called Facebook M. Medical imaging technologies apply AI to help tackle cancer, diabetes, heart disease, brain disease and eye health. Uber has deployed self-driving cars in Pittsburgh, the first time the technology has been offered to the general public.
Here are some megatrends that illustrate exponential growth in supercomputing, massive growth in data, and intense competition between deep-pocketed companies and startups, all of whom have started delivering breakthroughs in artificial intelligence:
- Investment in AI start-ups has increased more than fourfold to $681M in 2015, from $145M in 2011, according to market research firm CB Insights. CB Insights estimates that new investments will reach $1.2B this year, up 76% from last year. $400M has been invested in digital AI health technology alone as of 2015, and is projected to grow to $3B by 2020, according to Beacon Center for the Study of Evolution in Action.
- We're experiencing exponential growth in supercomputing performance. Exascale Supercomputers are likely to be 30x more powerful and faster by 2020 than today according to Japan-based RIKEN.
- IDC predicted that the total amount of digital data created worldwide would reach to 44 zettabytes by 2020 or 44 trillion gigabytes. Now, IDC believes that by 2025 the total will hit 180 zettabytes. AI will in fact be the only way we can make sense of so much data.
- By 2020 the number of Internet of Things (IoT) – Internet-connected sensors and devices around humans, buildings and cities – will as much as three times the human population globally. At a recent Trillion Sensor Summit, serial entrepreneur Janusz Bryzek, predicted 1 trillion sensors will be connected by 2025. Market demand for robots and drones are set to boom as their capabilities increase and costs fall, a trend driven by massive investment by the US Department of Defense, Google, Facebook and IBM among others.
Imagine all this driverless technology that is supposed to free up congestion by taking cars off the road, expanding Uber-like car sharing, and making transportation more efficient. You request a car with your iPhone app, it shows up at your location and drives you to your destination. You do not need to park it, you only pay for the driven distance and you can remain productive while in the car.
Imagine that your digital personal AI assistant knows who you are, understands natural language, translates to English if you’re not a native speaker, anticipates what you want, organizes your life, reads and understands your email, and is able to answer most questions. Systems such as Amazon's Alexa can already answer questions, play music from a music library, read an audio book, report sports results and control your home's heating, lighting and water.
Imagine having a personal concierge who will suggest where to go for lunch, what to do this evening, what to cook for dinner, and which hotel to stay at during your weekend at the beach. Imagine all of these individual tasks could soon be drawn together to create a single personal AI system that would make product recommendations, buy them for you and write a review while creating a sound investment plan customized just for you. No longer will we need to text a friend to ask if our outfit is appropriate for a celebration dinner, or call our friends to get their recommendations on a new car you’re considering – your AI personal assistant will do it all for you.
Not only will your personal life change, but also service enterprises are soon to be replaced by artificial intelligence. AI will alter the existing relationship between consumer and business by reducing the load on human capital and automation of the decision-making processes.
AI whirlwind is hitting the businesses and consumers, and current service economy business models may very well be about to turn upside down. When it comes to automating processes or applying computerized logic, there really is no market too small. In fact, businesses and consumers are already embracing AI in ways big and small. Such a change will shake (and re-shape) business models that have existed for decades to their very foundations.
Solutions that are coming to you in the near future
Artificial intelligence technology is poised to transform business solutions across a wide variety of sectors in more ways than you imagine. The digital solutions economy empowered by AI is a new business model of the future.
Mobility. Transportation sharing economy and self–driving, autonomous vehicles will generate massive demand. Services like Uber, Lyft, Via and Zipcar have already changed how people think about transport and car ownership in major cities. It’s also forced auto manufacturers to rethink their business models. A mobility-sharing economy will grow to the point that more rides taken globally are actually via a car sharing service and not by a privately owned car. Autonomous cars have the potential to dramatically increase safety, decrease emissions and change models of transportation. AI will likely take driving away from humans. Human drivers kill 32,000 people a year in the U.S. because our brains get distracted or make bad choices. More than a million people die each year in car accidents worldwide. Despite headlines about a recent self-driving fatality, AI driving should eventually nearly eliminate accidents.
Tech companies like Google, Tesla and Uber, as well as traditional automakers like Toyota, Mercedes, General Motors, and Volkswagen are all currently working on different versions of self-driving cars.
AI-driven healthcare. The use of AI to solve specific healthcare problems, small and large, is already well underway to diagnose cancer more accurately than top medical professionals do. AI-driven health care will be like having a doctor in your pocket 24/7, helping you feel better and live longer and what’s more valuable than that? A pocket doc, in turn, will push down demand for expensive procedures and reduce healthcare costs.
Recently, a University of Tokyo doctor reported that IBM’s Watson was successfully able to diagnose a rare form of leukemia in a patient whose disease had gone undetected using conventional methods by the doctors.
Companies like Cloud Pharmaceuticals are using AI to achieve breakthroughs in drug discovery, with the ability to discover and bring highly targeted personalized therapies to market in record time. Still other companies are using AI to invent new and better methods for disease prediction and treatment.
Adoption of implantable technologies will become more widespread. Devices will be able to track a person’s health more accurately, while also allowing them to communicate thoughts via brainwaves or signal.
The worlds of Fintech and AI converge. New automation is also on the way to Wall Street. Most banks will be disintermediated, so things like walking into the bank just won't exist anymore because they will be commoditized out of existence by more peer to peer products and enhanced virtualized service. There is a wave of tech start-ups aiming advanced machine learning at financial markets. Advanced machine intelligence systems are on the horizon such as Emma AI, founded by Shaunak Khire of Stealth. Emma is expected to outsmart day traders and their existing trading platforms. Emma differs from current finance computing — high-frequency trading and “quant” data science — because its system of neural nets takes into account a more complex set of factors affecting stocks, like management changes or monetary policy in Asia or Europe, that other programs miss.
Education and entertainment. General purpose learning systems will drive the future of education and entertainment. AI will be used in deep learning systems that can learn on their own, whether on a supervised or even unsupervised basis and this will lead to successful deployments in a range of specialized educational applications. AI will grow beyond its role as curator and analyzer of content and become much more important in generating and augmenting content in the first place. These types of systems could also be used in education. Imagine a teacher that is learning alongside the student in real time. This same kind of technology has the potential to generate characters and plots for movies as well as interactive virtual-reality games.
AI in enterprises. AI is and will continue to be quietly adopted by enterprises, allowing them to extract knowledge from all the data that is being generated. AI will continue to move towards taking on decision-making tasks. Automated fleet management, intelligent supply chains and candidate resume screening are just a few examples that are currently used today. Because AI is so effective when it comes to matching patterns and automating processes, it’s well suited to perform more tasks in large enterprises.
Connected glasses will become more aligned with spatial recognition and augmented reality. The technology will allow a person to have direct access to internet applications to enable an enhanced or augmented reality experience. Eye tracking technology will also enable him/her to control the interface solely with their vision. Google, of course, has already introduced similar technology with its Google Glass.
To conclude: this is just a small snapshot of what is happening with AI and what it means for businesses and consumer markets. One thing is clear: The business models of the new digital future are going to be closely linked to artificial intelligence, industrialization and commoditization of cognition. Regardless of whether today’s businesses are ready, AI will become more mainstream very soon, and it will forever transform everything from healthcare and financial services to automotive industries among others.
The rapid emergence and evolution of new technologies means that new revenue opportunities emerge with unprecedented speed. Established brands will co-create the future and new business models with AI powered startups. We should start preparing now for a future involving the immersion of AI, creating value around it and how best to leverage it to our benefit.
Mark Minevich is Senior Advisor of the Council of Competitiveness in Washington DC and a Senior Fellow of the Global Federation of Competitiveness Councils (GFCC). Mark is Advisor to Chairman of Financial Policy Council (FPC) in New York.
Mark is Principal of Going Global Ventures (GGV), a New York based global investment, technology and strategic advisory firm, with bench strength and insight into business strategies and best practices dedicated to leading high growth tech clients to success in the global knowledge economy. Mark was recently appointed as Venture Partner at GVA Capital Group focusing on AI. Mark is an associate partner of Blackhawk Partners Mark is also a strategist and advisor to Global Emerging Markets (GEM) a NYC-based alternative investment group that manages a diverse set of investment vehicles; he plays an integral role in fundraising. Additionally, Mark is also on the Advisory Board of TriLinc Global, a US based private investment company dedicated to creating a global platform for impact investing through alternative investment funds. To keep up with exponential emerging technologies, Mark also serves as an Advisor to CEO and Executive Board member of the Comtrade Group.