AI for CEOs

Business Strategies for the Next Big Technology Disruption

 

Executive Summary:   Artificial Intelligence (AI), and especially its rapidly emerging Machine Learning branch, are already transforming markets and delivering solid ROI in certain sectors.  But the Great AI Disruption is just beginning.  Before it’s finished, it will transform virtually every aspect of modern business.

Executives urgently need to understand the impact AI will have on their markets, their customers’ needs and the changing nature of business competition.  In some cases, it may still be too early to make big investments in AI, but understanding the coming impact of AI on business is already critical in the development of company strategies.

This presentation, by a leading Internet technology pioneer, provides a basic introduction to this brave new world, and guidelines for developing business strategies to navigate it successfully.

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AI is red hot.   AI/Machine Learning startups are getting the lion’s share of VC funding, and the big tech leaders (Amazon, Google, Facebook, IBM, Intel, et al.) are investing billions.  Each.  There can be little doubt that AI is the next big thing in information technology.

Business leaders face a coming tech disruption on order of the Internet, mobile and social media.   Only bigger.  By 2030, according to a recent PwC report, more than one-third of American jobs will be eliminated by robots, self-driving vehicles and other forms of intelligent machine automation.[1]  This AI  disruption will affect every kind of business—from security guard staffing companies, to trucking firms, to global financial services giants.

Envisioning a world with robo mall cops, driverless trucks and AI stock traders[2] isn’t hard.   It’s here today, in the beginning stages.  You can hail driverless Uber cars in the hills of Pittsburg, and buy a robot night watchman, today.  A shipment of 50,000 cans of Budweiser was recently shipped 100 miles by driverless truck on an Interstate in Colorado.

The AI disruption, however, will do much more than merely eliminate jobs.   It will rewrite the rules of business competition as well.  The biggest change is not that new “learning machines” will replace human workers.   It is that they can, and will, outperform them.

Take the case of video surveillance.  Today in America, over 50 million video surveillance cameras watch the perimeters and interiors of business facilities.   The human security analysts who monitor them manage to view approximately 5% of these cameras in real-time.  Intelligent computer vision systems can process 100% of these video feeds—and do so with face recognition “memory” that far exceeds that of the best human analyst.  These systems not only provide high ROI through cost savings on human staffing, but actually identify persons of interests and threatening behaviors with greater reliability and precision.  AI’s ability to deliver costs-less/works-better services will transform business competition, across the board.

Once established, such systems will continue to learn and improve at unprecedented rates.  Increasingly, they will do this without human supervision, even in the development stages.  Machines, in other words, will start building next generation machines themselves.  Industry experts have already observed an “AI Moore’s Law” kicking in, with performance metrics doubling every 18 months.  Ready or not, a new AI-enabled business world is coming.  Sooner than most business leaders think.

This presentation—by Internet technology pioneer, author and speaker Charles Jennings—delivers an insider’s look at the rapidly emerging world of AI, specifically designed for non-technical CEOs and business leaders.   It introduces key AI principles, defines terms and methods, surveys current market trends and, most important, suggests strategies for winning this latest high-tech race, rather than becoming roadkill because of it.

Charles Jennings is CEO of NeuralEye, an emerging AI company focused on autonomous image recognition.  Neuraleye is based on AI research, technology and patents developed as part of the Jet Propulsion Laboratory’s Mars Rover program, and acquired from Caltech.  Jennings understands the challenges of building autonomous learning applications, and the significant social and regulatory issues that must be addressed when taking them to market.

He is also a passionate believer that business leaders in virtually all sectors need to start learning about AI…now!   As he says in the presentation,

“Your company needs a compelling AI story, yesterday.  To position it on the street if you’re public, and with investors if you’re not.  And to make sure the self-learning machines which will soon eat your market are owned by your company, and not a competitor.  

The two most important AI-related questions each business leader must answer are:   When will the AI disruption hit my sector?  And how, specifically, can I plan to leverage it when it does?

AI, says Jennings, is not an extension of current IT systems and methods—it is a whole new species.  One that behaves quite differently than anything most executives (even IT executives) have ever experienced.  Spinning a compelling AI story, aligning with the right AI partners, selecting the right AI vendors and hiring the appropriate AI staff requires new understanding, new skills.  There is no time to waste in acquiring them.

Jennings suggests that business leaders in the audience imagine themselves as executives in 1995.

 You are running a music company.  A travel firm.  A daily newspaper.  A bookstore chain. Your business is growing, making a healthy profit.  Life is good.  Then the Internet tornado hits, and you’re out of business within 3-10 years.

In 2017, business leaders are at a similar inflection point.  Only this time, the tech tsunami is bigger than anything before, and one that ultimately will challenge fundamental assumptions about what it means to be human.  Huge segments of the workforce will be eliminated, forever.  Machines that move, fly, communicate, see, hear and learn together will be everywhere—building things, analyzing data, providing healthcare services, selling insurance, transporting people and goods, securing buildings, fighting wars and creating their own immersive gaming environments.   Just to name a few of the more obvious examples.

A recent Cambridge University study concluded that within 25 years, a team of robots could beat the World Cup winner in soccer.   Elon Musk—founder of SpaceX and Tesla, both startups with multi-billion dollar valuations—has started a new company whose mission is to embed silicon in human brains, so that (paraphrasing) we humans can start learning faster than machines.  AI has its predictable vectors…but it is also taking us into completely uncharted territory.

To navigate this new territory effectively, business executives need to understand and deploy a 5-part AI strategy:

    • Apply the NFL Rule. The No Free Lunch Theorem is a long-proven mathematical law for neural networks.  If there’s only one rule you learn about the neural computation architectures that underlie AI/ML, this is it.   The NFL Rule, as it is known colloquially, states that you can’t have it both ways:  your neural network or machine learning system cannot be good at both general utility and specific problem-solving at the same time.  The big boys (Google, Amazon, Apple, Microsoft, etc.) have global ecosystems to feed, and are focused on general utility AI.   They are doing a brilliant job—but they will never solve your market’s highly specific problems.   Therein lies your strategic opportunity.
    • Embrace openness and transparency. AI is disrupting IT across the board—including notions of IP protection and proprietary technology.  Google, Samsung, Intel and others are putting AI platforms and technology into the open source arena at an unprecedented rate.  This is because they understand that operating massively connected self-learning systems is an enormous tech challenge—one that can be met only by massively connected resources (human and machine), actively collaborating.  Strategically, the best choice is to hop aboard the open-source AI train now…and start leveraging its momentum to develop and deliver proprietary capabilities targeted to your specific market.
    • Emphasize autonomy at the edge. The most valuable real estate in the AI market is at the edge—on highly distributed machines of all kinds, ranging from fixed sensors to mobile phones to drones and spacecraft.  The edge systems that empower these devices to see, hear, understand and react must learn to operate autonomously in ever changing real-world conditions.  Centralized brute-force cloud computing—the opposite of edge computing—is already a commodity; the greatest AI value is created when delivering self-learning compute capability at the edge.
    • Beware of regulatory and social traps. AI is unique among recent technology disruptions in that social and regulatory concerns have kept pace with its business promise.  Bill Gates, Stephen Hawking, Elon Musk and others have been outspoken about the potential risks to humanity presented by AI.   Their concerns are valid…yet AI shows no signs of stopping.  Company strategies must pay careful attention to the unique legal and social concerns raised by AI.   And make a strong commitments to cybersecurity and maintenance of human control.
    • Focus on Augmented Intelligence. There are two kinds of AI:  Autonomous Intelligence and Augmented Intelligence.   The former aspires to give machines human-like ability to read and respond to changing environmental conditions.  The latter brings new intelligence to machine roles, but always under direct human control.  Human-like autonomous machine intelligence is years—maybe decades—away.  Augmented Intelligence is used today, in many forms.  Smart companies will understand the difference, and in the great majority of cases, focus exclusively on Augmented Intelligence for now.

The AI systems that PwC says will eliminate 38% of current American jobs may arrive in five years, or perhaps take twenty.   Predicting when robotic surgeons, completely automated farms and fully autonomous machine banking systems will arrive…is difficult.   But that they will emerge, someday, is no longer in debate.

We can say with confidence today that the Great AI Disruption has begun, and will be a disruptive force in commercial markets of all kinds—creating new winners and losers—for decades to come.

 

[1] Read the full PwC report, Leveraging the Upcoming Disruptions in AI and IoT, here.

[2] BlackRock, the world’s largest financial asset management company, recently announced it was replacing certain traders with robots.  See the Fortune story:  Blackrock Picking Stocks with Robots.