All businesses are being disrupted by artificial intelligence, or at least they will be in few years. But what if this technology were to be combined with cloud computing? There is now an ongoing paradigm shift in web data services, where AI tools are provided as ‘cloud AI services’. No one can exactly anticipate all the implications of such a change, but it is definitely going to transform the way in which firms make use of data.
What Are Cloud AI Services?
Google, Microsoft and Amazon are among those firms that are leading the competition in this field with huge investments that only such big high-tech players can afford. What they provide on the cloud are suites of software able to perform all AI’s abilities such as reading text, voice commands and images recognition, automatic learning and patterns identification in datasets.
Developers can basically personalise the services according to their own tasks, without having to code the algorithm from scratch. The challenge is to take advantage of that without losing control on their own business.
Since improvements in artificial intelligence performance rely mainly on processing massive data-streaming, these suites give the opportunity to scale the application of already reliable and well-designed AI software to firms which lack the necessary resources and skills to develop such tools. This means that the high-tech giants are in a sense socialising valuable core competencies in artificial intelligence with external developers.
Moreover, this move is obviously a big deal for those firms that already use the same technology internally. As Amazon’s $12bn in revenues from its cloud division testifies, once the critical mass is reached, these kinds of web services become flourishing cash cows even if sold at relatively low cost.
In addition, external firms and developers increasingly make use of their services. This is because the more the providers gain expertise in the field, the more they are able to build upon their capabilities. In order to master artificial intelligence it is important to keep testing and refining its applications, as well as getting feedback on its strengths and weaknesses.
On the Horizon
The battle among Cloud AI suites providers is fierce, and a competitive advantage is pursued both through acquisitions and critical partnerships. In early 2017, Tencent struck a deal with NVIDIA to boost its growth in the field, while Microsoft is challenging Amazon’s leadership in key regions like India by teaming up with local partners. On the other hand, Google is proceeding through one of the most important M&A strategies focused on AI to recover ground on the competitors.
It looks like a desperate rush to survive in the next decade. Any high-tech company knows that it cannot lose ground both on the AI and Cloud computing fields. As Andrew Ng said before leaving Baidu, “AI is the new electricity” This is what is going to determine companies’ position in the market in any business.
What emerges from this trend is the apparent slow concentration of AI capabilities in few cloud-based AI service providers who are able to invest money and efforts in this competition. At the same time, all firms will gradually become dependent on the application of Artificial Intelligence in their business.
This match can create unique opportunities as well as threats to the firms’ independence. It is likely that a small number of high-tech giants are going to be able to gather more and more power over time thanks to their early involvement in the field, while the other firms might turn into indirect subsidiaries.
Cloud-based AI: The Future?
Until now, access to AI’s potential was limited to big high-tech companies and relatively few start-ups, who are typically acquired as they develop a potential threat to the big giants.
Cloud-based AI services look set to spread by playing on the specialisation and socialisation of rare core competencies in this technology. Democratising access to AI will trigger many opportunities in businesses that were until now unthinkable. If AI is the new mobile, a Cloud-based AI might be its internet connection.