From Sci-Fi to Multibillion-Dollar Industry
I grew up reading the works of Isaac Asimov, Arthur C. Clarke, Philip K. Dick, Robert A. Heinlein, Douglas Adams and other science fiction giants.
I was never interested in medieval fantasies involving knights, dragons and fairies. In my view, romanticizing a time before vaccines, deodorant and a whole host of personal hygiene standards is profoundly bizarre.
Instead, I’ve always preferred visions of the future. Space travel... an end to disease... people becoming more intelligent. I’m talking about a world where people favor technology over magic... And robots, of course.
I especially loved reading Asimov’s robots series. It's largely centered on the debate over which ideas are acceptable for robots to have... and which are dangerous.
The amazing thing is... we now interact with robots daily. They exist in various levels of complexity and function. Though most don’t have to grapple with big ethical questions...
At least not yet.
Your Roomba from iRobot (Nasdaq: IRBT) has a simple focus. “Do I keep vacuuming? Or do I go back to the charging station?”
We’re just starting to deal with difficult questions related to self-driving cars. For example, in an unavoidable accident, who is expendable? The passenger? Pedestrians? The other motorist?
That’s not to say there isn’t an elegant or appropriate response. But it’s something engineers will have to determine before self-driving vehicles hit the mainstream. [Editor’s Note: For more on this subject - and the profit potential for early investors in self-driving technology - check out this short video.]
Of course, that’s still down the road. Let’s focus today on a fast-rising technology we already encounter regularly. In fact, you may run into it dozens of times per day without realizing it.
It’s at the forefront of what could one day become artificial intelligence (AI)...
We’ve been witnessing the “rise of the robots” for a few years now. It’s ongoing. And, for the most part, our interactions have primarily been through marketing.
The personalized suggestions from Facebook (Nasdaq: FB), Pandora (NYSE: P) and Netflix (Nasdaq: NFLX) aren’t guesses. They’re the result of high-tech targeting.
Those ads you’re encouraged to click on... suggestions of “shows you might enjoy”... songs played with your unique musical taste in mind? They’re all generated by a system that, every day, learns a little bit more about you.
Even the news you read online is catered to your preferences.
Your Amazon (Nasdaq: AMZN) Echo... speech recognition on your phone... and don’t forget about autocorrect. Every time you mistype a text, the suggested words come from your common phrases and habits.
Did you ever get a call or email from your credit card company about possible “suspicious activity”? There’s an anomaly detection algorithm constantly looking over your account. The system learns - and, more importantly, knows - what your spending looks like. As soon as something occurs outside of that norm, it triggers an alarm.
You are human. You are predictable. You are habitual.
Every moment of every day, there are machines trying to learn how to make your life better or easier.
AI and machine learning have picked up speed in the last couple of years. That’s because advances made on the hardware and communications side have made it possible.
We’ve seen this sort of thing happen again and again in tech.
For example, think about internet speeds. A few short years ago, we were dealing in dial-up and kilobytes per second. Now we’re transferring gigabytes of data almost instantly.
AI and machine learning are at the forefront of every business strategy going forward. And the growth here is huge.
According to Tractica, the enterprise AI systems market will grow from a $358 million in 2016 to more than $31 billion by 2025.
By 2018, it’s expected that 20% of all business content will be generated by machines. You’re probably well aware of the proliferation of robo-authors already. (Folks in my line of work certainly are...)
Bank of America (NYSE: BAC) believes the combined market for robots and AI systems could reach $153 billion over the next few years. Robots account for $83 billion of that total, with AI systems making up the rest.
The primary drivers? An aging population around the globe and rising wages, especially in the world’s manufacturing floors like China.
Despite all of our daily interactions with machine learning, there are only 1,500 companies in North America currently utilizing AI. That may seem like a lot, but it’s less than 1% of all medium- to large-sized businesses.
IBM’s (NYSE: IBM) Watson is working right now on cognitive security. This is looking for patterns and nuances in cyber threats and can identify risks. IBM also recently teamed up with NVIDIA (Nasdaq: NVDA) to help computers think “in more human-like ways.” The blue chip tech company has already spent billions on Watson for machine learning and AI.
Salesforce (NYSE: CRM), Microsoft (Nasdaq: MSFT) and Alphabet (Nasdaq: GOOG) all have products dedicated to this field.
We’re still in the nascent stages, but growth in this market is going to pick up rapidly in the years ahead. Machine learning and AI will be the cornerstones of many industries going forward.
As an investor, you must be aware of the possibilities - and profits - that lie ahead.
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