There’s no need to be a visionary to realize that the technologies of the future such as artificial intelligence (AI) will change many businesses on a global scale. The technology, born in the 1960s, is now taking on a variety of new forms. As of today, the most prevalent “branches” of AI in the business field are machine learning and deep learning. The core idea behind using them is rather simple: the analysis of the huge data amounts provides the best forecasts for a business.
There is little doubt that customers of IT development companies – banks, financial institutions, healthcare, energy, retail, agriculture and other sectors – will increase their spendings on AI, says the report by McKinsey & Company. Companies will seek to gain a strategic advantage using the data processed by AI, which allows new discoveries to be made.
Fair enough, the hype around AI has grown thanks to futuristic sci-fi imagery such as self-driving cars and speech-based chatbots, but now the technology is starting to penetrate various domains. Artificial intelligence had a long way to go: the technology began to approach the business world as a sort of beneficial but long-term solution, and now it’s all about the disruption that is gaining momentum and fast. This way, the biggest challenge for companies is not to get lost in the myriads of opportunities. At the moment, chief executives have a serious task to cope with: figuring out the best strategy for getting value from investments in artificial intelligence software solutions, while avoiding all kinds of financial traps along the way.
Perhaps, the real question one may ask is how exactly the capabilities of AI solutions will change the game. Given the fact that AI startups are growing by leaps and bounds, it is necessary to be an experienced investor in order to recognize in advance and cease the capabilities of an artificial mind. Nonetheless, the technology already influences the way some companies do business.
So without further ado, let’s check the report from 2018 by Deloitte and see the current state of AI for businesses. One thing is crystal clear: the spendings on Artificial Intelligence are going up. As much as 82% of early adopters say they have seen positive returns on investment, according to Deloitte.
The graphics processing units producer Nvidia (NVDA) is one of the companies that can claim gradual growth based on AI. Despite the fact that its main business is still computer graphics and games, Nvidia sells processors with AI for Internet companies and businesses engaged in cloud computing. Such firms include Amazon, Microsoft and the Alibaba Group. Nvidia AI processors also help drive unmanned vehicles in the early stages of testing.
“It seems that Nvidia is probably the most obvious player on AI market because they have infrastructure that provides data processing. There are developers and companies that use AI technologies in their products, inserting them into cloud data stores so that they can be monetized, such as Salesforce.com. A huge amount of information is being drained into cloud storage, which is processed to help companies extract the right data. Companies also sell the tools so that the customers themselves can create their own AI models, and the major cloud vendors are in a good position. But while it is very early, we still do not see the monetization of a large number of companies,” said Derrick Wood, an analyst at Cowen & Co.
The report indicates that the median ROI on a single AI project is about 17%. It worth noting that Deloitte surveyed 1,100 U.S. executives with early AI projects in the phase of development.
63% of projects are related to machine learning, 62% use natural language processing, 57% use machine vision, and 50% of respondents claim that they use deep neural networks. The main ways of integrating artificial intelligence among early followers include corporate software based on AI (59% of respondents), the collaborative development with partners (53%), and the use of cloud services (49%).
A good example of how companies are trying to conquer the AI ??market is Salesforce.com, which aims to be a leader in attracting AI technologies in the enterprise software market. Salesforce.com cloud software helps companies organize and manage sales and customer relationships through service, domain name management and marketing. The company has grown by providing services in finance, health and e-commerce.
The company made several acquisitions to take possession of the AI ??tools, including RelatelQ, MetaMind, Minhash and PredictionIO. Analysts say Salesforce.com is in the early stages of introducing AI tools into existing cloud products to make them more predictable.
Question: what types of business processes will AI revolutionize? The respondents say that artificial intelligence has the potential to automate repetitive tasks such as lead flow and appointment booking, provide unobvious yet important strategic insights and automate areas of work linked with knowledge. In other words, corporations are looking for an AI solution which is able to reduce the need for costly human resources. Again, it’s all about productivity: doing more with fewer workers.
Surely, there are emerging issues as AI goes more mainstream. The biggest one is, undoubtedly, the lack of deep understanding within a particular company. Coven Wood from Tractica, a market intelligence firm that focuses on human interaction with technology, comments on the situation: “AI is very specific for each specific application, especially for the industry. CIOs of many companies say: “We need to invest more in AI. Then we will be more competitive”. But what’s next step? Sadly, this incertitude may apply to any company in any industry.
So let’s be fair: not all industries (and organizations) have fared well with AI. For instance, life sciences and healthcare have invested heavily in AI with lower returns in comparison to technology and telecom companies.
AI also raises concerns among the companies that deploy it: 32% of respondents in the past two years have had failures they attribute to artificial intelligence malfunction. Besides, every fifth AI project was rolled up due to cybersecurity concerns. 40% of respondents are concerned about the associated regulatory risks, and 32% – ethical risks. Many companies fear that AI will spread false information and distort recommendations.
Meanwhile, despite negative experience, a lot of venture capital flows to AI startups. Technology giants, led by Google and Apple, are eager to acquire many of them. Since 2012, more than 200 private companies engaged in development in the field of AI have been acquired, according to the research by CB Insights.
On the other hand, funding for AI startups rose to $1.73 billion in the first quarter of 2017, compared with $939 million a year earlier, the same source claims. AI-related software startups like StackPath, Sentient Technologies, Ayasdi, Flatiron, Digital Reasoning Systems, Vicarious Systems, DataRobot, and Zoox are well-funded. At the same time, some AI startups remain relatively independent thanks to going IPO.
Tractica predicts that by 2025, revenues from artificial intelligence will reach $59.8 billion, compared with $1.4 billion in 2016. All in all, business leaders believe that AI technology will eventually provide more opportunity for both employees and businesses. C-level executives across companies agree en masse that the technology will have a positive impact on their workforce (70%) and equally benefit customers (45%) and employees (43%).
According to SmartKarrot, 79% of CSMs agree that AI will make CS Management more effective through a customer survey conducted in 2022.
So if you want another fancy word, well, be sure that the next digital frontier is on the horizon and its name is AI. Fair enough, AI solutions might be still taking shape, but there’s little doubt that AI will be a competitive advantage not to neglect.