Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
AI will (not) have a record year in 2022 the way you think
AIAuthority | | Dec 17, 2021
Artificial intelligence is being used in an increasing number of industries and business categories, leading to a record year of revenues and investment in 2021. That trend will only accelerate in the coming year as the race to apply the technology to new industries and new purposes within leading industries leads to record numbers in venture capital and acquisitions.
It’s difficult to overstate the importance of AI as a systematic force; according to a Statista report, the AI industry generated some $35B in revenue in 2021, and is likely to increase that by 50 percent or more in 2022. On the other hand, it’s quite easy to overstate its effect in any single application. That it is a considerable part of the future of any software-based business is inarguable, but its power comes from being almost universally helpful, not a miracle solution for a particular problem.
Three Core Fronts
Interested parties are looking beyond the hype and realizing the actual limits and potentials presented by the technology as a whole. The opportunities for advancing it fall into three general categories.
See: Why Artificial Intelligence Will Solve All Our Money Problems
1. DATA which one might think of as the raw material for machine learning systems, is arguably the most important and one where we will see increasingly sophisticated competition and investment. Software has always been limited by the “garbage in, garbage out” idea and AI is no exception — and its designers are learning how much data is needed to avoid that trap. The US and China in particular have begun siloing their precious data stores and companies are hoarding wherever possible; the EU, with its tighter regulations on collection and storage of data, will likely lag in this respect due to fear of violating frameworks like the GDPR.
2. INTELLECTUAL PROPERTY in the form of actual models or machine learning engines and platforms is the next most important. One way to track this is in numbers of patents filed, a metric that puts US companies like IBM, Google, Microsoft, and Intel well out in front, with Korea’s Samsung and the EU’s Siemens behind. However, this picture is incomplete due to China’s unique approach to IP, and the shrewd observer will assume that, as in other measures, the country is likely competitive on the level of the US even if it’s difficult to reliably quantify its presence.
See: RBC Research: Preparing for Hyperdrive – Themes that will define our new future
3. FUNDING: The last area of the competition is funding, which is, of course, important but hard to summarize. AI startups attracted some $36 billion in venture capital in 2020, and that number was surpassed within the first six months of 2021. This growth is impressive, but so is the investment by governments and research institutions that fund basic research and open-source projects often cited or iterated on in private research. China especially has dedicated tens and likely over a hundred billion towards AI research through direct funding or through corporations under government influence. Whatever the real numbers, they will only increase in the near and medium-term.
From Dipping a Toe to Plunging In
According to a Deloitte survey, half of all companies asked were bringing AI processes into their operations, and this number is likely to increase to 75 percent by 2023. But increasingly these companies are realizing that AI is a game-changer in a broad, systematic sense rather than a magic bullet.
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