The following post highlights how Venture Scanner categorizes the Artificial Intelligence (AI) startup landscape, and presents our Innovation Quadrant showing how those categories compare to one another. The data for this post is through April 2017.
Every few months it seems another study warns that a big slice of the workforce is about to lose their jobs because of artificial intelligence. Four years ago, an Oxford University study predicted 47% of jobs could be automated by 2033. Even the near-term outlook has been quite negative: A 2016 report by the Organization for Economic Cooperation and Development (OECD) said 9% of jobs in the 21 countries that make up its membership could be automated. And in January 2017, McKinsey’s research arm estimated AI-driven job losses at 5%. My own firm released a survey recently of 835 large companies (with an average revenue of $20 billion) that predicts a net job loss of between 4% and 7% in key business functions by the year 2020 due to AI.
Artificial Intelligence has been around for sixty years, and through this long time it has had many ups and downs, but mostly downs. The “AI winters”, as they are commonly known, were caused because of the insurmountable obstacles that declarative programming presented when building the knowledge base of an intelligent system. Hand coding a complete description of the world proved to be an impossible task. Systems were limited by the “knowledge” that could be coded into them, and therefore unable to cope with the unexpected. And then, sometime around the late 1990s, the unexpected happened: a mostly discredited notion in AI, that one should emulate the human brain and its neural intricacies, came back in vogue. This resurrection of old ideas coincided with the cost of parallel processing dropping significantly – thanks to Graphic Processing Units (GPUs) used to process video game graphics. The AI everyone is talking about is this new kind of brain-like AI, where you do not code the world; instead you teach the machine how to learn about the world.