Artificial intelligence gets real
Is artificial intelligence over-hyped, or are we at the vanguard of a new wave of corporate productivity improvements ushered in by next-generation technology?
The possibilities yielded by AI apply across every sector. In our view, the real beneficiaries of the growing capability of AI will be the companies that can combine technical capability and large datasets with the crucial ability to deploy AI at scale in their core businesses. However, the scale providers of AI capability – the large-cap technology players such as Amazon, Google, Microsoft, Facebook, Alibaba, Tencent and Baidu - are, once again, front and centre of this profound long-term investment theme.
In recent investor presentations and earnings calls, we have increasingly come across the terms ‘artificial intelligence’ (AI) and its terminology bedfellows, ‘machine learning’ (ML) and ‘Big Data’.
While companies have addressed these concepts for a few years now, they have taken centre stage in the last 12 months. While we see a lot of hype in the near term, there are enough real-life examples underway to indicate AI will be a significant investment theme in the next decade.
In its purest form, AI is defined as ‘computer systems able to perform tasks normally requiring human intelligence’. In practice, it is self-learning technology driven by machine-learning algorithms that try and fail, learning from experience and improving millions of times over. The algorithms require access to vast amounts of data to allow them to fail, learn and discover ways to improve.