Commentary
Artificial Intelligence: The Dotcom Boom All Over Again
- by Chuck Martin , Staff Writer, July 15, 2018
The artificial intelligence market may not be as hot as it looks.
Most, but not all, investments in AI will be wiped out as the market consolidates, according to a new report on the future of the artificial intelligence market.
The vertical sectors of cybersecurity, automotive, healthcare manufacturing and finance and insurance are projected to thrive, reaching $24.8 billion by 2023, with cybersecurity leading that group with revenue of $7.2 billion.
The two major horizontal market segments are machine vision, projected to reach $14 billion, and natural language processing, expected to reach $15 billion, with much of those markets overlapping with other vertical segments.
Overall, the market will still have value, as the AI market globally reaches $39 billion by the end of 2023, though less previously expected, according to the forecast by Rethink Technology Research.
The report suggests that AI has yet to reach the point of bursting, but it is coming, considering the huge sums of money invested in it. The number of funding rounds a year for AI startups doubled to about 1,3000 from 2014 to 2017.
In the first quarter of 2018, funding of U.S.-based AI startups jumped 29% from the previous quarter, to $1.9 billion, across 116 deals, according to Rethink, noting that Google has stated that most of its $16 billion R&D budget was commited to artificial intelligence. AI investments are projected to add up to more than $100 billion a year globally this year.
The report states that artificial intelligence is the dotcom boom all over again. Time will tell.
Chuck Martin is Editor of the AI & IoT Daily at MediaPost and writes the daily Connected Thinking column. He is a NY Times Business bestselling author and his latest book is “Digital Transformation 3.0” (The New Business-to-Consumer Connections of The Internet of Things.) He is CEO of Net Future Institute and a frequent keynote speaker internationally. Follow him on Twitter @chuckmartin and contact him at Chuck@MediaPost.com.
I have been watching the progress in AI or the lack of it like many. I think the jury is still out on how effective AI will be on the net. I see a ton of data in online sweepstakes publishing and what the advertisers and ad agencies are asking for in the type of information. I think there is a couple of questions missing in the discussion. First, the advertisers is not going to share private data that they spend on with it competitors. Does the tech world think this will change? Second will AI really change the craddle to grave marketing that started with digital many years ago? My thinking is AI will need to take steps in enhancing data but will never really get to the point of predicting consumer buying habits or future purchases.
Good questions, Craig. As you likely know, AI has been around for a very long time but just going mainstream. The jury is still out on private data, but behavioral data in the aggregate has been a good predictor for some time.
The author of that report must not be very old. We oldsters remember the "AI Winter" which preceded the dotcom boom (let alone the dotcom bust). There are some indications that winter is coming... again.
But the market is not remotely close to as inflated as the dotcoms, neither in absolute terms nor in the pressure to pop. We oldsters remember the heady days of 1999/2000, and this is not that.
Read Gary Marcus (@GaryMarcus) or Filip Piekniewski (@filippie509) if you want the technical limitations that will eventually pop the deep learning hysteria.
Good history contect, Dan.
Thinking about this for a couple of weeks, brougth back something important in the history on the net. In 1998 to 2000 there were 600 websites/companies that were build but folded. Many were given large sums of money by venture capitalist. Most of the failed ventures had techies that had a theme but knew little on the marketing side to make it work.
Fast forward. AI is being build by techies and no doubt that they are tallented. But is AI being used built and used for the right reasons? I can give examples but better to stop here.