AI to Become Key Competitive Factor by 2020, Says Tata


(Image: Pixabay)

(Image: Pixabay)

Eighty-four percent of large companies around the world say they are using artificial intelligence, and 62% say AI is important to remaining competitive in the year 2020. But only a few are making bold investments in AI or cognitive computing.

Tata Consultancy Services polled 835 executives and IT managers in North America, Europe, Asia Pacific and South America at companies that averaged $20 billion in revenues. It found AI to be almost universally important, but the average investment in it was one-third of one percent of revenues, or $67 million. Only 7% said they spent $250 million or more in 2016. The average was $67 million; the median for the whole group, only $3 million.

Even some of the largest companies, however, plan to spend less than average. Fifty-seven percent of the companies with revenues between $20 billion and $50 billion spent less than $20 million on AI in the year 2015.

That may be a mistake. The companies with the greatest revenue and cost improvements in 2015 from their AI initiatives outspent those with the smallest improvements by a factor of five (in terms of spending as a percent of company revenue).

The imbalance in spending on AI is likely to lead to future "competitive imbalance," the report said. "Conservative spending may come to haunt the majority; the companies with the greatest revenue and cost improvements in 2015 from their AI initiatives outspent those with the smallest improvements by a factor of five," the report stated.

"The practice today is one of widespread experimentation but limited transformation," it concluded in the report on the survey, Getting Smarter by the Day: How AI Is Elevating Global Companies. Nevertheless, it noted the widespread collection of data, availability of clustered compute power, whether on premises or in the cloud, and increasingly sophisticated AI and machine learning systems. The combination is "a perfect storm" for a rapid uptake of artificial intelligence and cognitive computing.

[Read the full story at InformationWeek.com]

Charles Babcock,

Charles Babcock is an editor-at-large for InformationWeek and author of Management Strategies for the Cloud Revolution, a McGraw-Hill book. He is the former editor-in-chief of Digital News, former software editor of Computerworld and former technology editor of Interactive Week. He is a graduate of Syracuse University where he obtained a bachelors degree in journalism. He joined the publication in 2003.


China becoming AI leader
  • 12/7/2017 10:28:01 AM
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In his blog post, Charles Babcock writes

Tata Consultancy Services polled 835 executives and IT managers in North America, Europe, Asia Pacific and South America at companies that averaged $20 billion in revenues. It found AI to be almost universally important, but the average investment in it was one-third of one percent of revenues, or $67 million. Only 7% said they spent $250 million or more in 2016. The average was $67 million; the median for the whole group, only $3 million.

Even some of the largest companies, however, plan to spend less than average. Fifty-seven percent of the companies with revenues between $20 billion and $50 billion spent less than $20 million on AI in the year 2015.

 

It would appear that private-sector AI investment pales in comparison with the increasing emphasis that China, with its collectivized economy, is focusing on AI. According to a recent article in MIT Technology Review titled China's AI Awakening

The country is now embarking on an unprecedented effort to master artificial intelligence. Its government is planning to pour hundreds of billions of yuan (tens of billions of dollars) into the technology in coming years, and companies are investing heavily in nurturing and developing AI talent. If this country-­wide effort succeeds—and there are many signs it will—China could emerge as a leading force in AI, improving the productivity of its industries and helping it become leader in creating new businesses that leverage the technology. And if, as many believe, AI is the key to future growth, China's prowess in the field will help fortify its position as the dominant economic power in the world.

 

Who woulda thought that China would be taking the lead in global AI development?

 

Re: AI vendor pull
  • 5/1/2017 1:12:48 PM
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@Michelle: With open APIs, open standards, and the like, this competitive advantage that the big boys have is largely going away for companies that want to leverage AI to compete.

Re: AI vendor pull
  • 4/30/2017 11:04:01 AM
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@k4qym That's the data I want to see too. It seems as though larger organizations could implement AI much easier. Smaller orgnizations may not have as much to work with in terms of funding. Profitability is key.

Re: No surprise
  • 4/30/2017 10:59:20 AM
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@Ariella: It's kind of amazing how unadaptable most people are to variable change.  They find that a couple of certain things or ways of thinking or doing things work for them, so they stick with that the rest of their lives regardless of change and regardless of circumstances.

Re: AI vendor pull
  • 4/30/2017 10:58:00 AM
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@louis: I'm with you, to an extent.  For businesses, autonomous vehicles have tremendous promise.  (Think self-driving taxis/Ubers, self-driving freight trucks, etc.)  For consumers, however, the only "advantages" that self-driving vehicles offer comes down to two arguments:

1) You can multitask and relax instead of focusing on the road.

2) Computers are better drivers than pitiful humans.

#1 is insufficient, and #2 is, overall, just plain wrong.

Not to mention many other arguments against becoming a society of autonomous vehicles (primarily: the loss of human autonomy).

Re: AI vendor pull
  • 4/30/2017 10:53:18 AM
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@T Sweeney: "AI" sounds sexier and is a more graspable concept than "machine learning," "deep learning," "neural networks," and the like.

"AI" today is kind of like the "cloud computing" that Larry Ellison was ranting about close to a decade ago...except that we actually did have the technology for "platonic" cloud computing back then.

Re: AI vendor pull
  • 4/27/2017 4:45:07 PM
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I was surprised by the numbers quoted "Eighty-four percent of large companies around the world say they are using artificial intelligence," but after realizing those polled were gigantic corporations, no longer so surprised. The interesting thing to watch is how long and to what extend moderate size companies will invest in AI and find it profitable to do so.

Re: AI vendor pull
  • 4/25/2017 6:54:43 PM
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rbaz,  I appreciate your insight.  When I sit back and consider your wisdom, I can't help but agree.  I think you are right - everyone does want to be at the party whether they understand AI or not.    Recently before this onslaught of AI articles, I asked myself what is the best plausible new frontier ?   AI could not be denied and I am not sure anything really comes close.   

As a result, I enrolled in an Edx class on AI among others. Which I highly encourage others  to do as well and to take advantage of the massive amount of resources available on A2 of course.    

It has been pretty heady stuff but one has to start somewhere and worth the time investment I hope because as you say, " the train is leaving the station" !   

Re: AI vendor pull
  • 4/25/2017 4:27:47 PM
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Louis, the rush is due to fear of being left behind and missing out. Everyone wants to be at the party, even though they may not be able to make sense of it all presently, it will be clear later on. In the meantime hop on board because the train is leaving the station.

Re: No surprise
  • 4/25/2017 4:20:29 PM
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No suprise to me at all. Investment in technology seems to be more like wading in the water versus diving in. Both are engaged with the water but the level of engagement is different. 

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