
WHY AI?
UNDERSTANDING AI
Artificial Intelligence or ‘AI’ is a general term that refers to hardware or software that exhibit behaviour which appears intelligent.
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AI refers to the ability of machines to perform cognitive tasks like thinking, perceiving, learning, problem solving and decision making.
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Excitement regarding modern AI relates to a set of techniques called machine learning, where advances have been rapid and significant. Machine learning is a subset of AI. All machine learning is AI, but not all AI is machine learning.
In our business, we talk about emerging technologies and how they impact society. We’ve never seen a technology move as fast as AI has to impact society and technology. This is by far the fastest moving technology that we’ve ever tracked in terms of its impact and we’re just getting started.
Paul Daugherty
Chief Technology and Innovation Officer, Accenture

The term ‘AI’ was coined in 1956 by John McCarthy.

John McCarthy was a Stanford computer science professor who organized an academic conference on the topic at Dartmouth College in the summer of that year.

During that time, research in AI was focused towards issues of problem solving and symbolic methods. Government agencies in this type of technology and began training computers to mimic basic human reasoning. The early paved the way for formal reasoning that we see in the computers today, including decision support systems and smart search systems.
CURRENT STATUS
Excitement regarding modern AI is due to the convergence of 3 key trends – increase in digital data, evolution of advance algorithms and exponential increase in computer power and storage has propelled AI as the defining technology for the next 30 years.
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Today the amount of data we produce is truly mind-boggling - 2.5 quintillion bytes of data are created each day and that pace is only accelerating. The capabilities of AI solutions are rapidly expanding to beat human performance in many tasks. Even a couple of years ago it would have seemed impossible that a computer could bluff better than a human being.

BIG DATA
More data created in last 2 years than all the data before in history.
1991
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2007
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2012
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2014
World Wide Web
iPhone launch propels smartphone sales & data generation
Facebook 1bn users
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7.2bn mobiles > human population

POWERFUL CHIPS
A smartphone processor is faster than the Apollo moon mission computer.
1965
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2002
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2009
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2011
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2017
Moore's Law
Amazon launches cloud
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GPU 70x faster than CPU
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IBM Watson 80 Teraflops
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Google introduces TPU - 30x faster than GPU

SMART ALGORITHMS
AI surpassing humans in some tasks: e.g. image analysis, text comprehension, Go & Poker!
1986
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1998
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2009
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2012
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2013
Backpropagation to train ANN
Google Page Rank Algorithm
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Spark revolutionizes big data
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Deep learning systems wins image classification
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CNN algo to play Atari games
IMPACT OF AI
Artificial Intelligence is expected to contribute $15.7 trillion to the global economy in 2030, more than the current output of China and India combined. Of this, $6.6 trillion is likely to come from increased productivity and $9.1 trillion from consumption-side effects (PwC, 2017).
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AI techniques like machine learning and deep learning are creating disruptive use cases across wide variety of sectors and impact could be more than trillion of dollars annually. There are more than 400 specific use cases across companies and organizations. AI will help transform the GDP growth, overall GDP and productivity of the globalized world. Initially, productivity gains from labour will drive the gains. Many of the gains are also likely to come from product enhancements, more product variety, personalization which is likely to stimulate consumer demand.
DISRUPTIVE USE CASES OF AI - BRIEF LIST
AI techniques such as machine learning and deep learning are creating disruptive use cases across wide variety of sectors and impact could be more than trillion of dollars annually.

Banking, financial services and insurance - BFSI
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Financial Trading
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Asset Management
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Fraudulent transaction
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KYC Management
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Credit Assessment
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Debt Collection
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Claim Settlement

Healthcare
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Medical Diagnosis
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Drug Creation
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Diagnose Health Diseases from Medical Scans
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Medical Imaging
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Predict Time Period for Hospital/ Hotel stay

Cyber Security
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Surveillance
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Authentication
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Privacy Protection
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Threat Management
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Correction Action
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Compliance

Mobility & Logistics
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Autonomous Vehicles
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Fleet Efficiency
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Omni Channel Inventory Management
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Logistics Management
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Network Optimization

Retail
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Personalized Design
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Production Media
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AI for Digital Store
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In Store Assistance
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Product Categorization
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Visual Search

Marketing & Sales
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Demand Forecasting
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Micro Segmentation
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Consumer Targeting
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Optimize Pricing
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Recommendation Engine
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Predict Customer Action
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Power Chat Bots
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Customer Support
INVESTING IN AI
AI startups have attracted massive amounts of capital as investors have seen AI solutions create real value in practice. Global investments in AI in just the last 3 years has crossed $60B. Moreover, larger enterprises are acquiring AI startups at an increasing pace. Over 200 AI startups were acquired in 2019, with Big Tech playing a leading role as acquirers.
This excitement mirrors the investor sentiment during the first internet boom in 1999/2000. Even though many dotcoms valuations crashed heavily in the stock market crash of 2000, Internet companies have created more wealth than any previous technology. Today, just 5 Internet companies are worth more than all public companies at the start of the internet era (based on Netscape IPO). This ability to create massive wealth for all stake holders is the hallmark of disruptive technologies.
Internet companies have created more wealth than any previous technology. Today, just 5 Internet companies are worth more than all public companies at the start of the internet era (based on Netscape IPO).
TOP 10 STOCK BY MARKET CAPITALIZATION
1995 (in $bn)










131
113
96
92
75
74
57
54
54
53
Total Market Cap of all US Public Companies (in $trn)
6.95
Share of Technology
in Top 10
13%
2020 (in $bn)










1842
1578
1554
1012
723
673
660
475
405
383
Total Market Cap of all US Public Companies (in $trn)
Share of Technology
in Top 10
35.5
86%
Sources: World Bank, Siblis Research & Yahoo Finance.
Comments
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Top 5 Internet companies are worth more than all US Public Companies in 1995.
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The share of technology stocks in Top 10 companies by market cap has grown from 13% in 1995 to 86% in 2020.
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AI is at an early stage. Like Internet, AI will affect every business and create $trillions of value over the next 25 years.
AI has the potential to surpass this and create even more wealth as it will impact every business and create trillions of dollars of value. However, like all previous booms, we have to be careful not to be blinded by the hype but evaluate the efficacy of an AI solution and the quality and uniqueness of its technology and algorithms.