Artificial Intelligence – Men and boys.

Reply to this post

The difference between men and boys will be the brains of their toys.

• Developer conference season is well underway and the central theme that is emerging is a focus on making Digital Life services smarter and more intuitive.
• This has implications for both services to consumers created by the ecosystem itself but also the possibility to make it much easier for businesses to communicate and service their clients.
• The customer service industry has been aware for some time with regards to the effectiveness of chat, but the possibility to automate a large part of it offers another leg up in terms of efficiency.
• I think that this combined with the ability to make personal digital assistants and other Digital Life services more engaging, fun and useful will be a big driver of the ecosystems over the next few years.
• The problem is that to make these services intuitive is very difficult requiring a first class artificial intelligence and machine learning infrastructure driving the service.
• This singular system has the potential to power everything within an ecosystem including search algorithms, personal assistants, chat bots, autonomous cars, game opponents and so on.
• This is why all of the ecosystems are engaged on developing their AI offerings and I see them at very different levels of development.
• Top of the heap is Google which has been working on this for years and I think has a large head start on everyone else.
• The substantially superior performance of Google Now compared to the other digital assistants, Siri, Cortana, Alexa, Facebook M and so on is a testament to that fact.
• This is Google’s bread and butter and if its dominance is to continue it will have to maintain this lead.
• Next comes Apple, Microsoft, Sony and Baidu all of whom have been working on this for a while but have a long way to go to catch up with Google.
• Sony is the dark horse here as although it has made a mess of much of its consumer electronics businesses, it has been working on AI for many years and may be able to pull a rabbit out of the hat.
• Behind this group is Amazon.
• RFM’s assessment of Alexa leads me to believe that Amazon is in the race but has some catching up to do to match Apple, Microsoft and Baidu.
• Right at the back is Facebook, whose beta launches have revealed bots that are far too stupid to offer a half decent user experience.
• Even though I see Facebook as the biggest potential emerging ecosystem with the most long-term upside, this is its Achilles heel.
• Facebook has the resources to invest or acquire in this area but it needs to get a move on as the others are not standing still.
• Furthermore, I suspect that its ability to really develop into a fully-fledged ecosystem with 80% Digital Life coverage (compared to 35% today) will be dependent on fixing this short coming.
• I still see a lot of long-term upside in Facebook but remain concerned that short-term expectations may not live up to reality in H2 2016 (see here).
• Hence I prefer Microsoft or Samsung for the short-term and also Apple for those income investors with long time horizons.