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“AI has the power to revolutionise almost all industries”

Artificial intelligence is experiencing extraordinary growth and the internet giants Google and Facebook are at the forefront, according to Aditya Kaul, research director at Tractica.


In 2016, a machine beat the world champion of the Chinese game Go – a game renowned for its subtlety and complexity – for the first time. The victory by the AlphaGo programme, developed by Google DeepMind, has put artificial intelligence (AI) back into the spotlight.

These interfaces, which are able to solve complex problems, are found increasingly in real-life situations. Driverless cars or voice-activated assistants are two of the most striking examples. Tractica, a US research and consultancy firm specialising in technology, is closely following developments in AI. Swissquote Magazine asked Aditya Kaul, research director at Tractica, to help us decipher this booming market.

Can the artificial intelligence market be quantified?

We estimate very strong growth across the global market in the next decade. Estimated to be worth $643.7 million in 2016, the market should increase to $38 billion by 2025, i.e. an increase of 50x the current figure. This growth should be mainly driven by the consumer goods, business services, advertising, finance, media and defence sectors. We also think that AI could be used by almost every industry and that this technology will have similar effects on the market as the IT revolution of the 1980s and the mobile revolution of the 2000s did. We are currently seeing significant development in the use of AI in the health sector, for analysing medical imaging for example, and also in the legal, insurance and sales sectors.

Who are the main players on the market?

Internet giants, such as Google, Facebook and Amazon, are at the forefront and are investing heavily in AI. They are followed by the automotive sector, with companies such as Google, Tesla, Toyota, Baidu and General Motors all competing to produce the first driverless car. And upstream there are the processor manufacturers, such as Nvidia, specialised in graphics processing units (GPU). The California-based company is taking off and has clearly become the leading supplier for the AI market.

Are any of the major digital companies standing out from the crowd?

It’s hard to pick a clear winner, but Google is definitely at the head of the pack. The company has made serious changes to its search engine: last year, AI elements were used to reply to a third of all search queries. In addition, artificial intelligence has enabled Google to reduce energy consumption at its data centres by 40%. Google also acquired DeepMind in 2014, a company that works on developing a strong AI system (editor’s note: a machine that can apply intelligence to any problem). It was this program that beat the Go world champion last year.

Facebook is also making significant progress. The social network has an enormous amount of data that it can use to train its algorithms. It has created an algorithm library for its engineers, in order to reduce the time required to develop new AI applications. With 1,000 specialists working on its voice-activated assistant, Echo, Amazon finds itself in an interesting position. And this is before even taking into account the use of robots in its warehouses and drones for delivering its products.

What about the other Silicon Valley giants?

Apple appears to be on the back foot. The company is not saying much about AI or the extent of its AI research. We will have to wait for the release of the next iPhone to get a better idea, but the fact is that Siri, Apple’s voice-activated assistant, is not very impressive in comparison to similar products from Amazon or Google. Microsoft is constantly telling us how dedicated it is to AI, but the company has yet to produce convincing results. IBM’s Watson program, which helps businesses solve problems using AI, is not generating much income at this stage.

In terms of research, where are the main breakthroughs currently being made?

For roughly the last five years, we have seen a shift, with large companies now surpassing university laboratories in research and development. The academic world is fighting to keep its researchers. The big question now revolves around knowing what kind of an impact this will have and whether the current model – where the brightest and best minds are all working for Google and Facebook – is sustainable.

And what about start-ups?

Our research has identified more than 2,000 startups which are working in the field of artificial intelligence. We estimate that between 500 and 600 of these are credible. The majority are active in highly specialised niche sectors. Let’s look at Edited, for example. This London-based company works in the fashion sector and analyses data to help stores optimise their product ranges and prices, and even identify the best time to launch a product. Another example is Captricity, a startup based in California that uses AI to digitise companies’ paperwork.

What advice would you give to anyone thinking of investing in AI?

When considering the different types of AI, we should pay particular attention to deep learning, which has led to rapid progress in the field of voice and image recognition. It is also important to understand that AI is only useful if you have data. Investors need to ask themselves if the company that they are thinking of investing in has data, or the ability to obtain data. One final key point is about algorithms. The be st-positioned companies are those that are investing and innovating the most in this field.

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