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62 Business The Economist December 9th 2017
2 robotics department was famously plun- plies to the Chinese giants, which are try-
dered by Uber in 2015). Academic confer- ing to establish Western outposts and hire Out in the open 2
ences, such as this week’s Neural Informa- American researchers. Baidu has opened Artificial-intelligence-related research*
tion Processing Systems in Long Beach, two research labs with an AI focus in Sili- By company-affiliation, 2000-16
California, double up as places to shop for con Valley, in 2013 and thisyear. Western AI
0 200 400 600 800 1,000
talent (see page 78). The best recruiters are researchers rate them highly but prefer to
academia’s AI celebrities: people like Yann work for the American giants, in part due Microsoft
LeCun of Facebook and Geoffrey Hinton to theirrelative transparency. Google
of Google—both former professors who If companies can lure the right people
keep a university affiliation—can attract in AI, the effect is to extend their work- IBM
othersto workalongside them. Proprietary forces exponentially. AI is “like having a Facebook
data can also serve as a draw, if the huge million interns” at one’s disposal, says
salaries are not enough. Benedict Evans of Andreessen Horowitz. Baidu
If none of that works, companies buy Thatcomputational poweristhen integrat-
whole startups. The tech industryfirst took ed into firms’ existingbusinesses. Amazon
notice of this trend in 2014, when Google The advantagesofAI are mostvisible in Source: Ajay Agrawal and Amir major AI conferences
*Papers from five
Sariri, University of Toronto
spent an estimated $500m on DeepMind, firms’ predictions of what users want.
a startup with no revenue or marketable Automated recommendations and sugges-
product but a team of “deep learning” re- tions are responsible for around three- plied in the corporate world. David Kenny,
searchers; after the deal they designed a quarters of what people watch on Netflix, the boss ofWatson, IBM’s AI platform, pre-
program that beat the world champion at forexample, and more than a third of what dicts that there will be “two AIs”: compa-
“Go”, an ancient board game. Other firms people buy on Amazon. Facebook, which nies that profit from offering AI-infused
have also shelled out to buy money-losing owns the popular app Instagram, uses servicesto consumersand otherswhich of-
startups, which are typicallyvalued not on machine learning to recognise the content fer them to businesses. In practice, the two
future profits or even sales but instead re- of posts, photos and videos and display worlds meet because of the tech giants’
ceive a price for each employee that can be relevant ones to users, as well as filter out cloud-computing arms. Providers are com-
as much as $5m-10m. spam. In the past it ranked posts chrono- peting to use AI as a way to differentiate
logically, but serving up posts and ads by their offerings and lock in customers. The
Behind closed doors relevance keeps users more engaged. three largest—Amazon Web Services, Mi-
Companies have different philosophies Without machine learning, Facebook crosoft’s Azure and Google Cloud—offer
abouthowto deal with staff. Some, such as would never have achieved its current application-programminginterfaces(APIs)
Microsoft and IBM, invest heavily in AI re- scale, argues Joaquin Candela, head of its thatprovide machine-learningcapabilities
search and publish a large number of pa- applied AI group. Companies that did not to other companies. Microsoft’s cloud of-
pers (see chart 2), but do not require re- use AIin search, orwere late to do so, strug- fering, Azure, for example, helped Uber
searchers to apply their findings to gled, as in the case of Yahoo and its search build a verification tool that asks drivers to
money-making activities. At the opposite engine, and also Microsoft’s Bing. take a selfie to confirm their identities
end of the scale are Apple and Amazon, Amazon and Google have gone fur- when they work. Google Cloud offers a
which do not have enormous research ini- thest in applying AI to a range of opera- “jobs API”, which helps companies match
tiatives, expect all work to feed into pro- tions. Machine learning makes Amazon’s jobseekers with the best positions.
ducts and are tight-lipped about their online and physical operations more effi-
work. Google and Facebook are some- cient. It has around 80,000 robots in its ful- AI on the brain
where in between on whether researchers filmentcentres, and also usesAI to categor- Many firms in other industries, from retail-
musttoil onlyon money-makingventures. ise inventory and decide which trucks to ing to media, stand to benefit from what
The intense battle for talent may force allocate packages to. For grocery ordering, those in the cloud business tout as the “de-
secretive companies to become more ithasapplied computervision to recognise mocratisation” of AI. Providing AI to com-
open. “Ifyoutell them, ‘come workwith us which strawberries and other fruits are paniesthatdo nothave the skillsor scale to
but you can’t tell anyone what you’re ripe and fresh enough to be delivered to build up sophisticated capabilities inde-
working on’, then they won’t come be- customers, and is developingautonomous pendently could be a money-spinner in
cause you’ll be killing their career,” ex- drones that will one day deliverorders. the $250bn cloud market. But providers of-
plains Mr LeCun, who leads Facebook’s AI As for Google, it uses AI to categorise ten must customise APIs for clients’ com-
research lab. This trade-off between secre- content on YouTube, its online-video web- plex needs, which is time-consuming. Mi-
cy and the need to attract people also ap- site, and weed out (some) objectionable crosoft, with its history of selling software
material, and also to identify people and to clientsand offeringthem support, seems
group them in its app, Google Photos. AI is likelyto do well in thisarea. Itis onlya mat-
Here come the corporations 1 also embedded in Android, its operating ter of time before AI offerings become
Global merger-and-acquisition activity system, helping it to work more smoothly “more and more self-help”, countersDiane
related to artificial intelligence and to predict which apps people are inter- Greene, who runs Google Cloud.
Number of deals Value, $bn ested in using. Google Brain is regarded in IBM is another contender, having
the field of AI as one of the best research backed a huge marketing campaign for its
120 24
groups at applying machine-learning ad- Watson platform. AI researchers tend to be
100 20
vances profitably, for example by improv- dismissive of IBM, which has a large con-
80 16 ing search algorithms. As for DeepMind, sulting business and a reputation for valu-
60 12 the British firm may not ever generate ing time billed over terabytes. The firm’s
40 8 much actual revenue for Alphabet, but it critics also point out that, although IBM
has helped its parent save money by in- has invested over $15bn in Watson and
20 4
creasing the energy efficiency of its global spent $5bn between 2010 and 2015 to buy
0 0 data centres (and its Go experiment was a companies, much of that with the aim of
2010 11 12 13 14 15 16 17*
public-relations coup). acquiring proprietary data, for the most
Source: PitchBook *To Dec 4th
Artificial intelligence is also being ap- part it does not have unique data of its 1